Document Type

Article

Publication Date

2011

Abstract

The need to restructure the limited liability rule as it applies to low-wage workers' wages is more compelling than ever. As the Wins case illustrates, a simpler and more straightforward mechanism is needed to ensuring that low-wage workers recover the wages they earned. This article offers an in-depth analysis on the problems faced by wage creditors and sets forth recommendations for reform that would guarantee low-wage workers' wages, thus exempting them from the limited liability rule. Part II traces the history of the limited liability rule. Particular attention is paid to the justifications for the limited liability rule, the effect of the rule on workers, and the current exceptions to the rule. Part III discusses the genesis of wage and hour legislation as well as efforts to exempt wages from the limited liability rule under both federal and state laws. Part IV presents a comprehensive analysis of the limitations of the existing frameworks, and Part V recommends a simpler and more effective mechanism to exempt wages from the limited liability rule. Specifically, the proposal seeks to guarantee wages for low-wage workers—creating a system of strict liability for wage violations.