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One of the most common complaints is workers who fail to get overtime pay as required by law.
There’s a simple workplace axiom: You put in your hours and get paid for them. Alas, this doesn’t always happen.
There’s been a record spike in wage and hour violation claims by employees thanks to sustained tough economic times, an increase in enforcement by the government, and confusion over -- or disregard of -- overtime pay provisions.
Wage and hour lawsuits have been soaring, according to federal judicial caseload statistics.
Already this year, there have been a record number of lawsuits filed under the Fair Labor Standards Act, which covers wage and hour provisions, with 7,064 filed so far this year. That's up from 7,006 filed for all of 2011 and just 2,035 cases filed a decade ago, according to data compiled by employment law firm Seyfarth Shaw.
The Department of Labor's wage and hour division collected a record $224 million in back wages from employers in the latest fiscal year for more than 275,000 workers.
“Many workers still have a hard time taking advantage of their legal protections,” said Jeffrey Michael Hirsch, associate professor at the University of North Carolina’s law school and a contributing editor to the Workplace Prof Blog. “Low-wage employees, in particular, often don't earn enough to attract attorneys, although class actions might help in some cases, so you see a lot of cases of unremedied wage theft.”
In those cases, he said, the Labor Department sometimes gets involved, especially to "send a message to employers."
The Labor Department, which sees 125 to 150 cases annually, has stepped up its efforts and pursues litigation when it cannot settle out of court, said Sonia Melendez, a spokeswoman for the agency.
“The wage and hour division has stepped up enforcement efforts on behalf of vulnerable workers — such as low-wage workers, migrant or seasonal laborers, workers with limited English language skills and workers who are unaware of their rights or are reluctant to file a complaint when subject to labor violations,” she said.
The bulk of wage and hour lawsuits deal with misclassification of employees, alleged uncompensated ‘work’ performed off the clock and miscalculation of overtime pay, said Richard Alfred, an attorney and chairman of Seyfarth Shaw's wage and hour litigation practice.
He attributes the rise in lawsuits to:
- Weakness of the economy, resulting in layoffs
- Outdated federal and state laws, which have failed to keep up with changes in technology
- A lack of clarity in existing law, making it difficult to classify which workers need to be paid for overtime
- Potential for lucrative recovery by plaintiffs and their attorneys
High-profile cases, such as a wage and hour case involving Wal-Mart, have gotten many employees, employers and lawyers to stand up and take notice.
In May, Wal-Mart agreed to pay nearly $5 million in back wages and damages to more than 4,500 employees who were misclassifed as being exempt from overtime rules. That paled in comparison to the $352 million the company paid in 2008 to settle allegations it didn't provide workers with proper rest and meal breaks but served notice that the Labor Department is paying close attention.
“Misclassification of employees as exempt from FLSA coverage is a costly problem with adverse consequences for employees and corporations,” said Secretary of Labor Hilda Solis at the time of the announcement. “Let this be a signal to other companies that when violations are found, the Labor Department will take appropriate action to ensure that workers receive the wages they have earned.”
Massive monetary awards have increased the profile of such cases, making them attractive to some lawyers, Hirsch said. But he said the awards also have made smart employers more careful. "One thing a lot of management-side firms do is perform internal audits for clients to make sure there aren't problems, particularly with overtime classifications," he said.
Not everyone is as focused on the issue, he added. “I'd like to think that employers of low-wage workers are getting the message, but I'm not sure that's the case in general. You still hear about violations all the time.”
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