My colleagues and I talk regularly about the ever-increasing number of wage and hour cases alleging violations of minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). These cases aren’t going away, which means that I will probably have plenty to blog about over the next year. According to PACER, litigants filed a total of 8,119 FLSA cases between May 1, 2013 and April 30, 2014. For comparison purposes, from May 1, 2012 to April 30, 2013, plaintiffs filed 7,388 FLSA cases. That is an increase of10%, breaching not only the 7,500 case mark, but also the 8,000 case mark for the first time. Just for reference, PACER reports just 3,456 FLSA cases were filed a decade ago between May 2003 and April 2004. Part of this increase is due in part to Plaintiffs, Plaintiffs’ attorneys and the government (Secretary Perez’s administration alone brought nearly 160 cases last year) being both more familiar with workers’ rights under the FLSA and more aggressive in defending those rights.
Importantly, these statistics do not capture any wage and hour lawsuits based on State law claims or brought in Circuit Courts. Anecdotally, we can report that those cases have continued to increase as well. The totals above would look even more ominous if you added lawsuits filed under state wage and hour laws, too.
What can you do? Here are a few suggestions to get you started:
- Read this blog. Congratulations! You’ve completed step #1. Knowledge is your friend.
- Get help! Wage and hour counsel is an even better friend. If you look hard enough, you can find a state or federal wage and hour violation in any business that pays someone for labor. The laws are complex and some type of review – annual or otherwise - of job descriptions and pay practices by wage and hour counsel can help you proactively identify problems before you get served with a lawsuit.
- Pay overtime to your non-exempt employees. Under the FLSA, that’s for any hours worked over 40 in a work week. Not sure who your non-exempt employees might be? See point #2.
- Pay your exempt employees on a salary basis at least $455 a week (with a few exceptions). Once again, see point #2.
- Get legal advice. Seek legal advice about whether your exempt employees fit the Executive, Administrative, Learned Professional, Computer-Related, or Outside Sales classifications (or one of the other less common ones). This can provide important protections for you in a lawsuit.
- Know your state laws. This is not just a federal law problem. Despite the focus on the FLSA, state laws often grant more generous benefits to employees and can define the common “white collar” FLSA exemptions in point #5 differently. For example, in California, employees must be paid overtime (OT) for any hours worked over 8 in a work day, where as other states strictly count hours worked during the week for OT purposes. Another example is here in Illinois, where there is a statute that classifies nearly any trade worker tangentially related to construction an employee, even if that worker would otherwise qualify as a contractor under federal law.
- Prohibit off the clock work. Pay for it if it happens, but impress on even the most well-meaning of employees (with discipline, if necessary) that they must have your authorization before working off-the-clock and before working any overtime.
- Friends don’t let friends use 1099s. As I said in a recent post and on Twitter (@WageHourInsight, if you aren’t following already), you can’t “agree” to give your employees a 1099, even if it was their idea. If you violate the FLSA, the DOL won’t care what you’ve agreed to do.