Are You Ready for the Wage and Hour Crackdown?


Ready or not, heightened government scrutiny of your wage and hour practices is coming. President Obama’s proposed budget for 2015 includes an increase of more than $41 million for the Wage and Hour Division of the U.S. Department of Labor. The President also has directed the DOL to update the overtime pay rules, which is expected to reduce the number of employees covered by the executive, administrative, and professional exemptions from overtime pay. Additionally, federal, state and local lawmakers all are debating the pros and cons of raising the minimum wage. Clearly, wage and hour issues are in the spotlight in 2014.

Plaintiffs’ attorneys also are turning more of their attention to wage and hour claims which can result in awards of treble damages plus attorneys’ fees. For example, in March 2014 alone:

  • Toys R Us paid $4 million to settle claims of meal break, overtime and minimum wage violations
  • Canon Business Solutions paid $4.4 million to settle an overtime and meal break case
  • KeyBank NA paid $3.5 million to settle an overtime pay case 

Employers in Maine and New Hampshire cannot expect to be immune from the efforts to enforce wage and hour laws.

There undoubtedly will be a protracted and spirited debate in Washington and in state legislatures across the country over the fiscal and moral implications of raising the minimum wage, increasing the number of workers eligible for overtime pay, and making other changes to existing wage and hour laws. The outcome of this debate is uncertain, and you should consider whether to join in the debate by contacting your state and local representatives or your trade association. One thing that is certain, however, is that the state and federal departments of labor, the plaintiffs’ bar, and organized labor will be spending more of their time looking for wage and hour violations.

As an employer, you need to be prepared for this additional scrutiny by making sure you are fully compliant with existing wage and hour laws and by staying informed of any changes in those laws.

Topics:  Compliance, DOL, Wage and Hour

Published In: Government Contracting Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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