Wage and Hour Lawsuits: 3 Areas to Watch

You’d think that paying your employees for their time on the job would be a simple equation. But often it’s not:

“Collective action lawsuits alleging wage and hour violations have risen 400 percent in the last 11 years, according to a recent post at CNNMoney. In 2011, there were more than 7,000 such lawsuits filed in federal court — a huge increase since the turn of the century.

These lawuits involve workers who claim they didn’t get paid the full amount for all the hours they worked — either because they were improperly listed as ineligible for overtime, or because they simply never got the money for the work they put in. (Unpaid Overtime: Wage And Hour Lawsuits Have Skyrocketed In The Last Decade, Alexander Eichler, Huffington Post)

For your reference, here’s a look at three wage and hour issues that should be on every employer’s radar screen:

1. Overtime and minimum wages:

“During the past year, the U.S. Department of Labor (‘DOL’) has stepped up enforcement nationwide at businesses that it deems ‘low wage’ employers, including restaurants… Since 2006, the DOL’s Los Angeles office has found federal Fair Labor Standards Act violations at 72 percent of the restaurants it investigated, awarding more than $2.2 million in minimum and overtime wages owed to over 1400 workers. Investigators pursue corrective action when violations are discovered, including back wages, penalties, liquidated damages and possible litigation.” (U.S. Department of Labor Targeting Restaurants for Wage Violations by Davis Wright Tremaine LLP)

2. Exempt employees:

“Under the Fair Labor Standards Act (‘FLSA’), employees are categorized as either exempt or non-exempt. Exempt employees are paid a salary for all hours worked and do not receive overtime pay. Exempt employees must meet certain criteria under the FLSA to qualify as exempt based on the primary duties of the employee’s job and they must be paid on a salary basis. Non-exempt employees are generally paid on an hourly basis. They must be paid for all hours worked in a workweek and receive overtime pay if they work over forty hours in a workweek… It is critical for employers to ensure that their non-exempt employees are properly compensated for all hours worked, including all overtime hours worked.” (Top Ten Compensable Time Issues for Non-Exempt Employees by Venable LLP)

3. Unpaid internships:

“As summer approaches, many employers are making plans to welcome an incoming class of summer interns… For their part, interns often receive valuable experience and the opportunity to make connections that may lead to future employment. In short, internships are generally seen as a ‘win-win’ situation. In recent months, however, a number of interns have sued their former employers, claiming that they should have been classified as employees for purposes of state and federal wage and hour laws. The plaintiffs in these cases – who were not paid while serving as interns – are seeking to recover wages for all hours worked, as well as any overtime due.” (Internship Programs Present Potential Wage and Hour Risks for Employers by Littler)

See alsoRecovering Money From Employees Without Violating the FLSA (Franczek Radelet P.C.)

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