There has been a huge increase in the past decade in wage and hour complaints by workers who believe their employers are breaking the law. Indeed, the increase since 2000 is more than 400%, with over 7,000 cases filed in 2011.
Let’s begin by explaining the types of actions by an employer that might be considered wage and hour violations under the Fair Labor Standards Act:
- Failure to pay employees for working “off the clock.” If a non-exempt employee is on-call for troubleshooting after hours, checks email or handles customer calls from home or in the car driving home, meets with a client for breakfast, responds to comments on the company’s social media site, or does any work outside of the standard workday, he or she may be entitled to payment for these hours.
- Not paying overtime when owed. Do your policies say that employees can clock in no more than 5 minutes before or after their shift begins/ends? Do they work before or after they clock in/out?
- Misclassifying workers as exempt from overtime pay when they should be non-exempt. Exempt and non-exempt job classification can sometimes be subjective. Look carefully at the type of work, rate of pay and how they are paid (hourly vs. salary).
- Labeling a consultant as an independent contractor (or “1099” employee) when he or she technically meets the definition of an employee. If you are providing the materials and equipment, setting the hours, determining how the work is done, and the job has a level of permanence, the individual would likely be considered an employee.
- Deducting hours for a lunch break when the employee actually worked through lunch.
- Failing to ensure wait staff are paid at least minimum wage when their tips don’t bring their hourly rate to at least that level.
There are other examples, but those listed above are some of the most common reasons for costly wage and hour lawsuits.
You may be looking at this list recognizing that you have done some of these things in your business. With the technology available today and increasing expectations that we are all “on” 24/7/365, it is easy for managers and employees to fall into the trap of working above the standard hours. Worse, because of the economic situation over the last several years, many employees are afraid to say “no” or turn off those mobile devices. In some cases, when employers begin tracking these extra hours, they discover there is actually a need for additional staff. Consider this: if 20 non-exempt employees spend an extra 20 minutes a day, seven days a week, that’s more than 40 hours – a full-time employee. When an employer takes advantage – either intentionally or not – the company opens itself up to a lawsuit.
How can you avoid wage and hour complaints? First of all, put written policies in place and train everyone on what is expected and acceptable. Next, review all positions to ensure they are correctly classified. You will also want to have non-exempt employees keep track of any time they work outside of standard hours. Pay them for this time. Hold violators accountable; make certain everyone understands there are consequences for breaking the rules. Finally, make sure employees know they can go to Human Resources or the owner to discuss anything they see as a violation, and then ensure that every complaint is investigated. If you have a reputation for doing the right thing all the time, it is less likely you will be sued.
If you have questions about wage and hour violations or other concerns about employment law topics, please contact an employment law attorney at Brinkley Walser. We would be happy to schedule a consultation to discuss the specifics of your case.