Wage and Hour Lawsuits: What Could They Cost You?

“… Pennsylvania’s Superior Court upheld a jury verdict of $187.6 million against retail giant, Walmart, Inc. in part for denying employee’s meal and rest periods as promised in their employee handbooks. Walmart’s violation regarding breaks and meal periods was not statutory but rather contractual.” (From Walmart’s Employee Handbook Cost them $187.6 Million; What Could Your Employee Handbook Cost You? By Jaburg Wilk)

As Walmart learned earlier this year, wage and hour lawsuits can be very costly, and the smart money is on avoiding them in the first place. But that isn’t always easy to do, writes law firm Franczek Radelet P.C.:  

“Even the most responsible employers find it difficult, if not impossible, to strictly comply with the often byzantine requirements of the FLSA and state wage and hour laws. Plaintiffs’ attorneys have figured this out, which is why wage and hour class and collective action litigation has exploded in recent years. Federal and state regulators have also approached wage and hour enforcement with renewed vigor.” (Why is Wage & Hour Law Different from Other Employment Laws?

For your reference, five pieces of advice on avoiding wage and hour lawsuits, from leading lawyers and firms on JD Supra:

– Make sure your employees keep track of the time they spend working outside the office: 

“… the extreme proliferation of electronic communication devices into every part of our lives creates a new wrinkle and key issues that employers must address when it comes to smart phone use outside the workplace. Although there have been countless wage-and-hour claims on a variety of topics, there is no widely accepted legal definition about compensating for time spent on work projects after hours strictly using electronic communication. The fact is, even without a statute in place, employers need to begin looking at policies regulating and defining electronic communication use outside of work hours and what work constitutes ‘overtime.’” (From That Little Smart Phone Might Cause a Big Wage and Hour Headache by Fisher & Phillips LLP)

– Avoid misclassifying workers, which can lead not only tax liabilities, but to wage and hour violations as well: 

“Misclassifications of an employer’s workforce will prove costly. Federal and state wage and hour laws allow for back wages, overtime, back benefits, penalties, back taxes and attorneys’ fees.” (From The DOL’s New App and the Dangers of Misclassifying Employees by Snell & Wilmer L.L.P.)

– Hope for the best, but prepare for the worst:

“If the [California] Supreme Court rules [in Brinker] that employers need only make [meal and rest periods] ‘available,’ wage and hour class actions will not grind to a halt. Plaintiffs’ counsel will merely change their allegations to assert that meal and rest breaks were not made ‘available.’ But most employers should have valid defenses to such claims, and, perhaps just as importantly, they will not need to revise the way they operate… However, if the Supreme Court rules that employers must ‘ensure’ that meal and rest breaks are taken, virtually every employer that does business in California will be vulnerable to wage and hour actions reaching back four years.” (From Act Now Advisory: California Employers Must Be Prepared to Implement New Meal and Rest Break Practices on Short Notice by Epstein Becker & Green, P.C.)

– When in Rome…: 

“In Sullivan v. Oracle, the court unanimously held that when an employee crosses into California, even temporarily, the employer must comply with California overtime laws in addition to federal law and the law of the state where the employee is actually ‘employed’ or resides. The court based its decision on California’s ‘strong interest in applying its overtime laws to all nonexempt workers, and all work performed, within its borders.’” (From California Supreme Court Extends Overtime Laws to Out-Of-State Employees Working in California by Wilson Sonsini Goodrich & Rosati)

– Keep your labor lawyer on speed dial: 

“When the Department of Labor pays you a visit: don’t turn over any records, arrange employee interviews, or answer any other substantive questions until you’ve talked to your lawyer.” (From What To Do When the DOL Makes an Unannounced Visit by Franczek Radelet P.C.)


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