There was a record high for federal wage and hour lawsuits filed under the Fair Labor Standards Act during the 2013-2014 year.
Some 8,126 FLSA cases were filed between April 1, 2013 and March 31, 2014, according to data from the Federal Judicial Center. That is almost 5 percent more than the number of lawsuits filed in the prior year’s period.
The latest increase was the seventh straight year of increases for these types of cases. In fact, FLSA cases have jumped 438 percent since 2000.
Richard Alfred, chair of Seyfarth’s Wage & Hour Litigation practice, said in a statement, “We expect this trend to expand further in the coming year.”
Among the reasons why the increases will continue is the tightening of standards for class certification. That has led plaintiffs’ attorneys to file many single and multi-plaintiff lawsuits when class certification is denied or a class is decertified, the law firm explained.
Other reasons for the jump are discussions on raising the minimum wage, and a directive to revise the regulations on white-collar exemptions.
“We expect that the DOL's [Department of Labor] current efforts to revise the ‘white collar’ exemptions, as ordered by the President, will cause exempt employees not receiving overtime to challenge their classification with greater frequency and non-exempt employees to contest more often uncompensated activities,” Alfred said in a statement. “This will predictably lead to even greater increases in the number of wage and hour lawsuits filed against employers.”
When considering how the data impacts businesses, Alfred explained to InsideCounsel that, “the best course for in-house counsel to take to reduce the risk of or avoid wage and hour litigation is to audit their company's exempt classifications and pay practices for compliance with federal and applicable state laws.”
“We recommend paying particular attention to exemptions that may be lightning rods for legal claims, such as those under the administrative exemption, for example loan officers in financial services and adjusters in the insurance industry; and the executive exemption, for example in the retail industry as may be applied to store managers and assistant store managers,” he added.
When auditing pay practices, Alfred said that in-house counsel may want to consider how “meal and rest breaks are taken, unpaid pre- and post-shift activities, and the use of technology devices by off-shift non-exempt employees. It is also important to review the method used by your company to determine the regular rate used in computing overtime to ensure that all required forms of compensation are included.”