I read this morning that there have been 7,064 lawsuits filed under the Fair Labor Standards Act so far this year. I believe this is a record for wage and hour violation claims and the year is only half over. This is also nearly sixty more FLSA lawsuits than was filed in all of 2011 and more than double the amount of cases filed ten or twelve years ago. The Department of Labor’s wage and hour division alone has collected a record $224 million from employers over the last fiscal year, and is continuing its campaign against misclassification of employees, including its cooperation with other federal and state agencies in going after employers who misclassify workers. In other words, this issue is not going away for employers.
As you have heard us mention many times on this blog, the primary focus of these lawsuits is misclassification of employees. For every employer victory (i.e., Christopher v. SmithKline Beecham) there is always a grenade waiting in the wings ala the Wal-Mart DOL settlements or the Family Dollar Store court decisions. Recent trends only stress the need for employers to take notice of this issue and audit their wage and hour practices.
Employers can expect to see more of these lawsuits by both the DOL and private plaintiffs in the remaining months and for the near future. The economy is still slumping and the plaintiffs’ bar is continuing to pursue these cases, viewing them as a “cash cow” and a way to thrive in the current economy. If your company classifies workers as exempt or independent contractors, don't just sit back and wait to see if you get sued. It is important to review your workers' status and take steps to either make sure that these classifications are in compliance or that your workers are reclassified and paid in accordance with state and federal law.