A.R.S. § 23-201 - Liability For Obtaining Labor By False Pretenses

A.R.S. § 23-201 - A Little-Used Arizona Employment Law Statute

Although it is not a frequent occurrence, sometimes an employee is surprised when his or her employer fails to pay them wages earned. There are a variety of statutes and laws pertaining to the payment of wages, most of which are set forth at A.R.S. §§ 23-350 - 23-392, that require payment of wages within a specific period of time and also allow for certain penalties when wages are not paid in a timely manner. Although not frequently utilized and rarely if ever addressed in reported Arizona Court decisions, A.R.S. § 23-201 should be considered as the basis for a separate claim for damages in many cases involving unpaid wages. This statute provides:

A. A person who employs for wages any person in any occupation, and who at the time of employing him does not have sufficient assets within the county in which the work or labor is to be performed over and above all exemptions allowed by law to cover the amount of wages accruing to the employee for the term of two weeks, and who makes false representations or pretenses as to having such assets, and after labor has been done by the employee under such employment, fails, upon the employee's discharge or resignation, or for a period of five days after the wages are payable, to pay the employee, on demand, the wages due, is guilty of obtaining labor under false pretenses.

B. Upon conviction, and in the same proceeding, judgment shall be rendered in favor of the employee and against the employer for all wages unpaid, together with a reasonable attorney's fee to be fixed by the court. The judgment shall also include compensation to the employee at the same rate at which the wages were agreed to be paid, from the time they became due until the judgment is satisfied.

C. The judgment shall be a first and prior lien against the property of the employer upon which the work and labor was performed.

D. Obtaining labor under false pretenses is a class 1 misdemeanor.

Lack Of Assets And False Representations Required

Two of the major requirements before liability may be found under this statute are that the employer lacked assets located in the locale where the work was to be performed to pay the employee's wages and that the employer made misprepresentations about having such assets to pay the employee's wages. A reasonable argument can probably be made that simply by agreeing to pay the employee the representation requirement can be shown. 

In the event these requirements are met, significant liability may exist if the employer fails to pay the employee's wages within the time set forth in the statute.

Significant Damages Not Available Under Other Arizona Employment Laws

The most significant element of this statute is the provision for continuing damages until the judgment is satisfied. Specifically, instead of simply being able to obtain a judgment for the unpaid wages, A.R.S. § 23-201(B), also mandates that the judgment "include compensation to the employee at the same rate at which the wages were agreed to be paid, from the time they became due until the judgment is satisfied." This can dramatically increase an employer's liability for unpaid wages because those wages may continue far beyond the termination of employment.

At the end of the day it may be difficult to prove liability under this statute, but in wage claim cases it should be considered where the requirements can be met. Because of the substantial damages that may accrue to an employer under this statute, it may be much more disposed to resolve the claim quickly in order to avoid accruing additional damages.

If you have not been paid by your employer or have some other employment law issue please talk to an employment attorney as soon as possible.