Practice Areas
Wage and Hour Lawsuits are at Record Highs
By: JAMES M. REID IV, ESQ.
 
As you may have recently heard on the radio or seen on television, many attorneys are changing their practice area specialty to focus on bringing employee wage and hour claims. Likewise, it should come as no surprise that the number of Fair Labor Standards Act claims filed in Federal Court have increased every year over the past six years. In fact, compared to the year 2000, such claims have more than quadrupled.
 
What are the reasons for the drastic increase in claims?
  • Many employees feel cheated since unions and other advocates have created the perception that minimum wage should be set at $15.00 per hour and many state minimum wage laws are scheduled to increase in the near future;

  • Many employees are working in excess of 40 hours a week on a $24,000 salary that do not have exempt duties;
  • Technological advances have allowed certain employees to perform services outside of working hours and respond to e-mails outside of work; which many employers fail to pay for such time;

  • New job positions are creating a gray area as to whether the positions are truly exempt positions;

  • Employees are becoming more familiar with wage and hour laws; and

  • The Fair Labor Standards Act makes the employer liable to pay reasonable attorneys’ fees if there is even a nominal wage and hour violation.

What are the most common wage and hour law violations?
  • Misclassifying non-exempt employees as exempt by paying a salary;

  • Requiring an employee to clock in and out throughout the day depending on customer need;

  • Paying a salary to an employee attending training for an exempt position instead of an hourly rate;

  • Charging employees for uniforms in an amount that would reduce pay below minimum wage; and

  • Failing to reimburse delivery drivers for gas and maintenance that would reduce pay below minimum wage.

What lessons have been learned?
  • Do NOT classify your secretary as an exempt employee just because you change the position title to executive professional;

  • Continue to evaluate job duties since employees that used to be exempt may become non-exempt if you take certain duties away;

  • Pay non-exempt employees for all hours worked, even if only responding to e-mail outside of work;

  • Rounding time is dangerous and illegal in certain states (including Michigan); and

  • Communicate with your employees to address concerns before they become a lawsuit.

What can employers do?
  • Do NOT wait for the anticipated amendments to the FLSA in 2016; understand the permitted exemptions now by reviewing the U.S. Department of Labor, Wage and Hour Division, Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA).
  • Get help from counsel to prepare detailed job descriptions and time clocking policies;

  • Interview employees to make sure their job descriptions are accurate;

  • Pay non-exempt employees overtime; and

  • Pay exempt employees a salary basis of at least $455 unless a permissible exception applies (such as FMLA leave).
 
For more information regarding this topic or other employment matters, please contact me at either 248.351.7060 or jreid@maddinhauser.com.