Don’t Risk a Federal Wage Lawsuit
According to Insurance Journal and a report by law firm Seyfarth Shaw LLP., employers are facing surprisingly high levels of Federal wage and hour lawsuits.
Despite indications that cases filed under the Fair Labor Standards Act (FLSA) have been curtailed in the last 12 months the number of cases filed is skyrocketing, the firm said.
With almost 8,000 FLSA cases filed in 2013, filing is up 10% from last year, according to data from the Federal Judicial Center.
Richard Alfred, chair of Seyfarth’s wage and hour litigation practice, said the claims forming the bulk of these numbers include misclassification of employees, alleged uncompensated “work” performed off the clock and miscalculation of overtime pay for non-exempt workers.
“With no clear catalyst during the past 12 months, this strong spike and new high for FLSA claims makes them one of the top threats to U.S. employers,” said Alfred. “We’ve seen an astonishing rise in FLSA claims, but with a slim one percent increase in 2012, it’s surprising to see a sharp increase like this.”
Alfred believes several factors may be responsible for the jump in 2013 filings, including:
- The improving economy may provide incentives for plaintiffs’ counsel to sue new and relatively unsophisticated companies, employers whose workforces are growing, and companies whose improved financial position has made them more attractive targets.
- The economic recovery has seen an increase in employment demands on all employees, both exempt and non-exempt, which cause them to question their employer’s pay practices.
- More lawyers who had not considered wage and hour claims in the past–both employment specialists and general practitioners–are now filing wage and hour lawsuits, perhaps motivated by large settlements in past cases.
- Employees are more sensitized to wage and hour issues, at least in part as a result of their access to social media.
