Section 109.11. Penalties.

 

(1)   Administrative penalties.

(a) In adjusting a controversy between an employer and an employee as to an alleged wage claim filed with the department under s. 109.09 (1) , the department may compromise and settle that wage claim for such sum as may be agreed upon between the department, the employee and the employer.

(b) If the department finds that a wage claim is valid, the department may instruct the employer against whom the wage claim is filed to audit his or her payroll records to determine whether the employer may be liable for any other wage claims of the same type as the wage claim that prompted the audit instruction. If after the requested completion date of the audit the department receives a wage claim against the employer of the same type as the wage claim that prompted the audit instruction and if the department determines that the subsequent wage claim is valid, the department may audit the employer's payroll records to determine whether the employer may be liable for any other wage claims of the same type as the wage claim that prompted the audit instruction. For any valid wage claim that is filed against an employer after the department has instructed the employer to audit his or her payroll records under this paragraph and that is of the same type as the wage claim that prompted the audit instruction and for any valid wage claim that is discovered as a result of the department's audit under this paragraph and that is of the same type as the wage claim that prompted the audit instruction, the department shall require the employer to pay, in addition to the amount of wages due and unpaid, increased wages of not more than 50 percent of the amount of wages due and unpaid, unless the employer shows the department that payment of the increased wages would cause extreme hardship.

(c) If an employer does not agree to compromise and settle a wage claim under this subsection, the department may refer the wage claim to a district attorney under s. 109.09 (1) or to the department of justice under s. 109.10 (3) for commencement of an action in circuit court to collect the amount of wages due and unpaid plus increased wages as specified in sub. (2) (b) .

(2)   Civil penalties.

(a) In a wage claim action that is commenced by an employee before the department has completed its investigation under s. 109.09 (1) and its attempts to compromise and settle the wage claim under sub. (1) , a circuit court may order the employer to pay to the employee, in addition to the amount of wages due and unpaid and in addition to or in lieu of the criminal penalties specified in sub. (3) , increased wages of not more than 50 percent of the amount of wages due and unpaid.

(b) In a wage claim action that is commenced after the department has completed its investigation under s. 109.09 (1) and its attempts to settle and compromise the wage claim under sub. (1) , a circuit court may order the employer to pay to the employee, in addition to the amount of wages due and unpaid to an employee and in addition to or in lieu of the criminal penalties specified in sub. (3) , increased wages of not more than 100 percent of the amount of those wages due and unpaid.

(3)   Criminal penalties. Any employer who, having the ability to pay, fails to pay the wages due and payable as provided in this chapter or falsely denies the amount or validity thereof or that such wages are due, with intent to secure any discount upon such indebtedness or with intent to annoy, harass, oppress, hinder or defraud the person to whom such wages are due, may be fined not more than $500 or imprisoned not more than 90 days or both. Each failure or refusal to pay each employee the amount of wages due at the time, or under the conditions required in this chapter, constitutes a separate offense.

1975 c. 380 , 421 ; 1977 c. 26 ; 1993 a. 86 . In a collective bargaining/arbitration situation a defense of "good cause" under s. 111.70 (7m) (e) is available if the employer fails to pay wages pursuant to s. 109.03 (1). Employees Local 1901 v. Brown County, 146 Wis. 2d 728 , 432 N.W.2d 571 (1988). Whether payments under an arbitration award are due from the entry of the award depends on the overall circumstances. Kenosha Fire Fighters v. City of Kenosha, 168 Wis. 2d 658 , 484 N.W.2d 152 (1992). Penalties under sub. (2) (b) may only be applied when wages are due and unpaid at the time an enforcement action is commenced in court. Hubbard v. Messer, 2003 WI 145 , 267 Wis. 2d 92 , 673 N.W.2d 676 , 02-1701 . Neither the text of sub. (2) (b) nor the case law interpreting it appear to support applying the federal presumption of double damages and burden-shifting framework to sub. (2) (b). The text and case law make clear that the circuit court has broad discretion under sub. (2) (b) to choose not to award a penalty and that, even when a penalty is appropriate, the court has discretion to award a penalty amounting to less than double damages. Johnson v. Roma II - Waterford LLC, 2013 WI App 38 , 346 Wis. 2d 612 , 829 N.W.2d 538 , 12-1028 .