“Is Small Claims Court good for collecting monies owed by a former employer?”

Question: I resigned my job and my former employer has refused to pay me for my accrued but unpaid vacation time. Also, I think I am due reimbursement for expenses. When I contacted my State Labor Board, they said I was in the right, but because they are so over-burdened, recommended I use Small Claims Court to collect. What do you think? Will it likely be effective?

Spring Valley, Colorado

Answer: Dear Joseph: I am a big fan of Small Claims Court for most employees in your situation. These are the reasons why:

1. Small Claims Courts are almost always (a) inexpensive, (b) convenient, and (c) easily accessible without an attorney. In almost all cities I know of, Small Claims Courts have been established to serve the needs of most people who have “smaller claims” to resolve, and to do so in a way that makes sense. The fees to initiate a case are usually in the range of $20. Most have schedules that include both during the day and during the evening. Most have interpreters and rather simple rules. And – my favorite part – you do not need an attorney to “make your case.” You can just show up and “tell your story.”

2. Most Small Claims Court cases are decided by volunteer lawyers who are both knowledgeable and fair, and act as “volunteer Judges.” Because of the many cases they handle, most Small Claims Courts request that experienced attorneys volunteer their time to help settle and decide cases. These attorneys are acting as pure volunteers, and know the law pretty darn well, so the claimants and defendants don’t need to know the law themselves. In my experience, these volunteer lawyers are fair, good-natured and try to do the right thing. When Small Claims Court cases are decided by Judges, they are quite reasonable, helpful and fair, too.

3. There are just three “rules” for Small Claims Court: (i) Be Prepared; (ii) Be Patient; (iii) Be Respectful. A Small Claims Court session is called a “hearing.” It is like a mini-trial. If your claim involves non-payment of accrued but unpaid vacation time, bring with you to your hearing such things as (a) Employee Handbooks that say you are to be paid them if and when you leave; (b) paystubs that show how much earned but unused vacation time you had, (iii) an contracts or memos that confirmed that you are due vacation pay if you leave; (iv) perhaps a former colleague who can attest to the fact that employees are told they will be paid for unused vacation time if they leave. Patience is often needed: don’t be surprised if the Court begins at 7:00 pm and your case is not called until 9:00 pm. In every way, in everything you say and do, and with every person, be respectful. It can and will only help you.

4. Decisions are usually mailed out one or two weeks after the Small Claims hearing. It is rare for a Small Claims Court to make a decision the day or evening you appear, because that might make the losing claimant or the losing defendant upset, angry and antagonistic on the spot. If you win, you can show mail a copy of your letter to your former employer; chances are they will pay right up. If not, you can return to the Small Claims Court, who will direct you to a local Marshall or Sheriff who will collect the debt for you.

5. No matter how long the wait is, and what the fee is, Small Claims Court is definitely quicker and less expensive than the alternatives. Labor Boards are free, but could take years to help. Going to an attorney is almost always so expensive that it might make no sense at all. Filing a “regular” lawsuit is crazy-expensive, crazy-long, and crazy-complicated. Small Claims Court generally trumps them all.

6. The one problem with Small Claims Court is its limit on how much you can sue for and collect. Unfortunately, Small Claims Courts come with one problem: they are only for “small” claims. How much that is depends on the Small Claims Court in your locality. My experience is that the maximum amount you can sue for in a Small Claims Court ranges from $2,500 to $10,000, with most being in between. So, if your local Small Claims Court’s maximum claim is $10,000 (something lawyers refer to as a “jurisdictional limit”), and your claim against your former employer is, say, $22,000, the most you can sue for and collect in this way is $10,000. While lots of states are slowly increasing the jurisdictional limits of their Small Claims Courts, I think the Small Claims maximum should be raised to at least $25,000. Most, though, are considerably lower.

7. All of this said, have you first tried making a respectful request in writing? I know this may sound funny, but have you tried to send a respectful letter requesting what you are owed. I say this for two reasons: (i) first, it is sometimes assumed by former employees that asking for what they think is due them is will be a waste of time. Since it takes no investment to make such a request, I suggest it would be wise to do if you have not already tried it; (ii) second, if you have done so, and you attach it to your Small Claims complaint, and show it to your Small Claims volunteer “judge,” it will earn you “points” in terms of their respect for you. So, it is a win-win to at least try.

When leaving employment – for any reason – ALWAYS ask to be paid for Accrued But Unused Vacation. Use our “Model Letter Requesting Payment for Accrued but Unused Vacation – with 12 Great Reasons.” It shows you “What to Say, and How to Say It.™ To get your copy, just [click here.] Delivered by Email – Instantly!

Obviously, Joseph, my thoughts about Since Small Claims Court are generally quite positive. Is it usually noisy? Yes. Is it a bit frustrating and time consuming? Yes. Is it something of a hassle? Yes. But see the positives and don’t focus on the negatives, and it is usually a very good way to resolve money disputes with former employers.

Hope this is helpful, Joseph, and that you will consider using Small Claims Court to get what you deserve.

My Best,
Al Sklover 

P.S.: Want to learn more about workplace negotiating? Consider viewing our Sklover On Demand Video entitled “Can I Really Negotiate with My Boss?” Just sit back, relax, watch and listen. To do so, just [click here.]

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