The rights of U.S. seamen under the law are, by tradition, closely guarded by the Courts. This includes the seaman’s right to wages, which are protected by the Seaman’s Wage Act (46 USC 10101-11507). Generally the Master (employer) must pay each seaman promptly at the end of the voyage the balance of wages due within twenty-four hours after the cargo has been discharged or within four days after the seaman is discharged, whichever is earlier. The Act imposes a penalty on the non-paying employer. If payment is not made “without sufficient cause” the seaman must be paid “two days” wages for each day payment is delayed. The U.S. Supreme Court in Griffin v. Oceanic Contractors, Inc., 102 S.Ct. 3215 (1982) held that there is no room for discretion when enforcing this penalty. If the employer has refused to pay the seaman his wages and the refusal is without just cause, the penalty applies. In Griffin, the employer withheld $412.50, and the District Court awarded $6,881.60, which represented a penalty only for the period of non-payment while the employee was out of work. The Supreme Court held that Griffin was due $302,790.40 because the $412.50 was not paid until over four years after he was discharged. Because of the dilemma this presents, the employer in any wage dispute should endeavor to resolve the matter as quickly as possible, and if there is litigation, pay the disputed sum into the registry of the Court. This action may toll the running of penalties.
The wrongful withholding is not enough to give rise to penalties. The employer’s action also must be arbitrary, willful or unreasonable. (Admiralty and Maritime Law, 4th Ed. Schoenbaum). The employer has the burden of showing that its actions in withholding pay were reasonable. Insolvency of the vessel, good faith mistake or clerical error, seaman’s negligence of his duties, where there are honest doubts about the seaman’s demand, and where the seaman refuses to submit a written claim have all been deemed fair reasons to deny payment with no penalty attached.
There are important exceptions to the double wage penalty statutes. They do not apply to fishing vessels, nor do they apply to the vessel owner when the vessel is under bare boat charter.
One of the most significant exceptions is that vessels engaged in coastwise trade are not subject to the double wage penalty. The Act does not define “coastwise.” However, courts have defined it as “a voyage between a port in one state and a port in another state” (except an adjoining state). Frederick v. Kirby Tankships, 2105 F. Ed. 1277 (11th Cir. 2000), Powell v. Global Marine, LLC, 2009 WL 4456571.
Exceptions or not, whenever there is a dispute over wages, the employer will be well served if it undertakes to thoroughly investigate, document the claim and, if the claim is denied, the reasons for denial. If the double wage penalty attaches, the award can be significant. (See Raby v. M/V PINE FOREST, 918 F.2d 80, reversed on other grounds), where the Court awarded over $32 Million to twenty-one Filipino seamen who had been wrongfully deprived of $166,000 in wages.