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There has been a recent trend toward litigation in the wage and hour arena. Employees are becoming more and more aware of their rights and starting to challenge employer practices. As this article explains, certification of a class action suit against an employer for a violation of wage and hour practices is easier than certification of most class actions.
Traditionally, wage and hour claims were not considered significant risks and probably not on the radar screen of most employers. However, as this article and this article note, with the recent increase in wage and hour suits, employers must be leery of their employment practices pertaining to wage and hour issues.
Although there are legal issues to consider when determining whether an employee is exempt from overtime requirements, many employees are legally entitled to receive time and a half for any work performed during a workweek above the 40 hour threshold. Often times, employers fail to accurate document and record the hours worked by an employee. The lack of documentation and accurate recording can result in significant wage claims.
Moreover, when the employer lacks credible, consistent, and convincing documentation pertaining to hours worked and wages paid, a group of employees may be able to present a convincing and credible story that would convince a judge and/or jury that they are entitled to back wages. For instance, when a small employer fails to adequately document its employees' hours and wages, it becomes difficult for the sole proprietor to refute and convincingly argue that the 4-5 employees are all lying about the employment practices. There becomes strenght in numbers as employees join together, tell a consistent story, and pursue wage loss. Without convincing documentation, the employer faces a daunting task of refuting the allegations asserted by a group of employees.
Employers should also underst that suits based on the Fair Labor Standards Act do not requite “bad intent” by the employer. Even negligence will subject the employer to liability. In addition to receiving the unpaid wages, an employee can receive liquidated damages equal to the unpaid wages. Therefore, an employer can be subjected to "double damages" if they have implemented an improper wage and hour tracking system.
The Fair Labor Standards Act also permits a prevailing employee to recover attorneys’ fees. Therefore, Plaintiffs have every incentive to pursue these claims. If they should prevail, they recover their lost wages, liquidated damages, and the employer may be required to pay the employee’s attorneys to recover the damages from the employer.
As we begin calendar year 2008, employers should consider their wage and hour practices, documentation, and consider whether legal consultation should be sought to limit past indiscretions, avoid future violations, and ensure compliance with both state and federal law pertaining to wages. Similarly, employees who believe they have not been paid for their full hours, particularly if they have not been paid overtime hours, should seek the consultation of a qualified attorney because there are time limitations for asserting claims and past wages may be lost through a delay in pursuing a claim.
Posted by William H. Grell on February 5, 2008 9:24 AM
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