Trends in Wage and Hour Claims

© 2013 Armstrong Teasdale LLP

Trends in Wage and Hour Claims

Presented by: Bob Kaiser



Wage and Hour Claims Continue to Explode

About 115 million employees — 86 percent of the workforce — are covered by federal overtime rules

There were 7,064 federal wage-and-hour cases filed during the 12 months ending March 31, 2012, a number that has grown almost every year since 2000.

The Obama administration has made enforcing wage laws a priority, adding 300 wage and hour investigators for a total of more than 1,000.

Last year we reported: Employers paid out nearly $176 million in back wages for minimum wage

and overtime claims as a result of federal wage and hour law violations in fiscal 2010.

This year we can report that the DOL collected $224.8 million in back wages in 2011


Missouri Minimum Wage Increases in 2013

The Missouri Minimum wage went up 10 cents to $7.35 effective January 1. 2013 (tipped employees will receive at least $3.675 an hour).


Wage and Hour Claims is a Billion Dollar Business Reasonable estimates for the last few years indicate that

companies have collectively paid out more than $1 billion annually to resolve these claims. That’s

$1,000,000,000 per year


What’s Pushing the Explosion

When jobs are plentiful, unhappy employees tend to move. Today many employees feel stuck and wage and hour

litigation is a way for a group of employees to try to get more money without "personally" attacking their employer.


Plaintiff’s Attorneys See Business Opportunity

Unhappy former employees are a goldmine for Plaintiffs’ attorneys "Ninety-five percent of our wage and hour cases are a result

of someone coming to us complaining about something else. I can't tell you how many people have come into our office with employment disputes that are meritless and would be thrown out of court and walk out with an FLSA claim."


Misclassification Claims:

The employee claims that they were misclassified as exempt from overtime, when the nature of their job was such that they should have been treated as non-exempt and paid overtime. Misclassification cases often arise because of the complex rules regarding exemption for certain categories of workers, including administrative employees and computer personnel. It’s not always easy to analyze the precise work being performed by each employee in these and other categories against the legal test established for determining when workers in such categories are exempt and when they are not.


Off-the-clock claims relate to situations when an employer forces, pressures, or even allows workers to work outside of hours that are not clocked in.

Off-the-Clock Claims:


Steps That Employers Can Take Include:

Audit the exempt classifications of the workforce periodically to ensure that employees are properly classified as exempt or non-exempt

Audit payroll practices periodically to ensure that you are tracking time and paying correctly.

If you ever have a situation where you need to alter an employee time record to reduce the time, get the employee to sign off on the change.

Implement a safe harbor policy that communicates your intention to avoid improper deductions and requires employees to notify the employer of improper deductions with assurances that improper deductions will be reimbursed;


Ensure that record-keeping policies are intact so that you maintain the appropriate documents, either on paper or electronically, to substantiate classification and payroll practices;

Train management-level and supervisory employees regarding compensable off-the-clock activities, proper deductions for disciplinary violations and enforcement of overtime policies, and how to handle complaints from employees about their pay.

Consult an experienced employment attorney before making wide-scale changes to any overtime classification, payroll practice or wage and hour policy.

When terminating an employee, make sure you have paid him or her properly for all time worked.

Steps That Employers Can Take Include:


Contact Information

Bob Kaiser [email protected]

314.621.5070

Trends in Wage and Hour Claims

Business

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