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Many states have laws relating to the timing of the payment of wages, frequently requiring that they be paid within a set time period of the time that they are earned.&nbsp; While the &ldquo;waiting time penalties&rdquo; of California law are perhaps the most well-known, other states&rsquo; laws also require the prompt payment of wages due an employee.&nbsp; Indiana state law, for example, requires that &ldquo;wages&rdquo; be paid within ten days of being earned. In <a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2011/01/Thomas-v.-HR-Block-Eastern-Enterprises-Inc.pdf">Thomas v. H&amp;R Block Eastern Enterprises, Inc.pdf</a>, the named plaintiff was a tax preparer for H&amp;R Block in Indiana.&nbsp;&nbsp; Her compensation took the form of both an hourly wage and what the company called the &ldquo;end of season&rdquo; or &ldquo;EOS&rdquo; compensation.&nbsp; The EOS compensation was essentially a bonus that took into account factors such as the tax products she sold, various client retention incentives, and fees collected by the company for her work.&nbsp; As its name suggests, the bonus was calculated at the end of the tax season for all tax preparers, and was generally paid in early to mid-May, approximately three weeks after tax season ended.&nbsp;&nbsp; The plaintiff brought a putative class action against the company claiming that although the company paid the hourly wage timely, the payments under the compensation plan was not paid within ten days of being earned, and therefore violated Indiana state law. The district court stayed the plaintiff&rsquo;s motion for class certification and ultimately granted summary judgment against her.&nbsp; It held that under Indiana law, the EOS compensation was not a wage in that it was contingent on factors outside of the parties&rsquo; control (such as collections), the amount could not reasonably be calculated within ten days of being earned, it was not dependent on the amount of time worked, and was in addition to her hourly wage.&nbsp; The Seventh Circuit affirmed. The Bottom Line: &nbsp;Bringing claims as a class may not present any benefit to the plaintiff if they are not viable under applicable law to begin with. &nbsp;

Seventh Circuit Affirms Dismissal Of Putative Wage Payment Class Action