Human Resources News & Insights

6 top reasons wage-and-hour lawsuits are climbing rapidly

The federal government’s added emphasis on enforcing wage-and-hour laws mixed with workers’ contempt for being asked to work longer hours without increased pay during the recession has turned into a dangerous cocktail for employers.

Some scary stats for you to digest:

  • The number of wage-and-hour lawsuits that reached federal court increased 15% between 2011 and 2010.
  • Last year, 7,008 wage-and-hour suits, many of them class actions, were filed in federal court.
  • The number of lawsuits filed under federal and state wage-and-hour laws against employers has increased 32% since 2008.
  • Federal courts have seen a 325% increase in these types of claims since 2001.
  • In 2011, the Department of Labor (DOL) recovered $225 million in back wages for employees, up 28% from fiscal 2010.

6 top reasons for the rapid increase in wage-and-hour suits:

  1. Due to budget constraints brought on by the recession, more companies are forcing employees to work off the clock
  2. Employees are improperly classified as being exempt from overtime
  3. The proliferation of technology (i.e., smartphones and tablets) has resulted in more work encroaching on employees’ personal time
  4. With more people working odd hours (e.g., 10-hour days with Fridays off) it’s getting harder to monitor how much employees work per week
  5. More businesses are being run by people with titles like “assistant manager,” making it difficult to determine who’s actually a manager under the Fair Labor Standards Act (FLSA) — since exemption eligibility is based on duties performed and not generic job descriptions, and
  6. The DOL has added 300 wage-and-hour investigators the past two years, increasing its staff by 40% to 1,050, to increase FLSA enforcement efforts.
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