Am I Safe from Wage & Hour Litigation in 2019?
PROTECT YOURSELF WITH THIS 3-POINT PLAN.
As employers look toward 2019, should they be concerned with wage & hour violations under the Fair Labor Standards Act (FLSA) and similar state laws?
The short answer is a resounding YES!
Both the government and plaintiffs’ lawyers are looking for violations, no matter how minor or unintentional, to force a large financial payout from employers. Companies large and small can get caught in “technical” violations of wage & hour statutes (i.e., no harm or injury was done to employees). Even when unintentional, these technical violations can lead to significant financial exposure. It turns into a modern-day "shakedown," and employers need to be prepared.
What should an employer do?
Ignorance is NOT bliss when it comes to wage & hour compliance. Employers should have an internal audit conducted under Attorney/Client Privilege to identify any potential problem areas before they compound. Be ready to answer questions in these three areas, which should be part of any wage & hour investigation:
Are your employees classified correctly?
If employees are classified as "exempt from overtime," does the position meet the exempt requirements?
Do you have workers classified as "independent contractors" (ICs) and if so, are you treating them as ICs (and not like employees)?
Are you compensating your employees correctly for all time worked?
Do you require employees to come in early to get ready for their work day?
Do you have employees working extra hours and not being paid for that time in the same pay period, or having it classified as comp time?
Are you calculating your employees' overtime rate correctly?
Do your calculations comply with both federal and state law?
Do your employee pay stubs meet all legal requirements?
These seemingly small issues can add up to significant payouts. Remember, technical or unintentional violations often occur repeatedly because you aren't aware there's a problem. When those violations involve multiple employees over a number of years, it can add up to a collective or class action suit that could deliver a significant financial blow to your bottom line.
Connect with your legal department or outside employment counsel (or contact us at MLS) to ask if a simple privileged audit is in your company’s best interest. When it comes to wage & hour compliance, what you don't know CAN hurt you.