Employees who work more than 40 hours in a week are entitled to overtime pay, which is one-and-one-half times the regular rate of pay, if the employees are not exempt from pay for overtime. Overtime laws are contained in the United States Fair Labor Standards Act (FLSA), which sets out when overtime kicks in and how much employees must be paid for working overtime. Employers who violate overtime laws could face lawsuits alleging they violated laws on overtime.
According to Jonathan A. Segal in a Fortune article this past May, more than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations, an approximately 400% increase since 2000. Jonathan Segal is a partner at the law firm Duane Morris LLP, where he is a member of the firm’s employment, labor, benefits and immigration practice group. In his opinion, the civil rights revolution has morphed into a kind of wage and hour revolution. So what’s driving this spike? According to Segal, wage and hour laws are often counter-intuitive. For example, if an employee is exempt and is late to work every day, you may be able to discipline him for being consistently late, but you can’t dock him for his lateness. If a non-exempt employee works overtime without permission, you almost always have to pay her for what you may perceive as “stealing your time,” but you may be able to discipline her for the unauthorized work. Segal says that some of the wage and hour plaintiffs’ lawyers he has dealt with are former “ambulance chasers.” These ex-personal injury attorneys now chase paychecks. In the employment arena, he goes on to suggest that due to the rigid labor market, it’s now time to sue. Why? When jobs are plentiful, unhappy employees tend to move. When they are stuck because of a sluggish economy, as many are today, they are more likely to sue. Many employees feel stuck and wage and hour litigation is a way for a group of employees to try to get more money without “personally” attacking their employer. You, the employer, are simply not complying with a legal technicality.
Indeed, some employees are arguing that their employers’ alleged failure to pay them money owed is a form of racketeering. Under RICO (Racketeer Influenced and Corrupt Organizations Act), employees can win four years of back pay and managers can be held personally liable for the unpaid wages.
Segal suggests in his article that an ounce of prevention goes a long way. He states; “If you are an employer or a manager, do not assume that you are immune from this sort of lawsuit. Employers need to look at their time-keeping systems, training programs, job descriptions and responsibilities, and actual practices to make sure they are following federal and state laws”.
This is where we at TSI, can step in, and through our expertise, coupled with the installation of specialized times and attendance systems, you can monitor, track, control, and understand your overtime issues before it becomes a problem. Call our specialists today.