Idaho Supreme Court clarifies statute of limitations for wage claims

Idaho law provides for two separate limitations periods during which an employee must pursue a wage claim. The first is a two-year limitations period for general unpaid wage claims. The second is a one-year limitations period (previously six months) that applies only “in the event salary or wages have been paid to any employee and such employee claims additional salary, wages, penalties or liquidated damages, because of work done or services performed during his employment for the pay period covered by said payment.” The Idaho Supreme Court recently clarified the difference between the two limitations periods, helping employers to understand how to limit employee wage claims.

Facts

Four employees sued Micron for allegedly underpaying them on their bonuses for the 2018 fiscal year (FY). The company’s compensation plan at the time—the Incentive Pay Plan (IPP)—allowed eligible employees to “earn yearly bonuses based on a number of performance metrics.”

Micron’s 2018 FY ended on August 31, 2018. Because it took a few months for the company to calculate the 2018 bonuses, it did not pay the bonuses until November 23.

The employees filed their complaint a little over six months later (when the six-month limitations period was still in place), claiming they earned larger bonuses during the 2018 FY than they were ultimately paid. The timing of the filing created a procedural issue for the supreme court to address: