Guess what? Wage suits are increasing. Hardly a surprise. A recent study shows that wage-hour lawsuits were up about 8 percent over last year, which may stem (in part) from the recent USDOL initiatives on revising the FLSA exemption regulations and its “white paper” on independent contractor issues. There is also the problem with applying a law born of the Great Depression to the modern workplace and all the new technology issues.
The study, with data derived from the Federal Judicial Center, shows that (as of the end of September), almost 9000 wage-hour suits had been filed, up from the 8000 filed the previous year. The data included FLSA cases filed in federal courts and similar-type state-law suits removed to federal court.
There has been a lot of publicity about raising the minimum wage in many areas, such as the $15 per hour minimum wage in Seattle and the directive from Governor Andrew Cuomo to raise the minimum wage for fast-food workers to $15 per hour. The President has called for the federal minimum wage to rise to $10.10. It is also an issue in presidential politics.
The USDOL has also proposed changing the exemption rules, in favor of more employees getting overtime. The agency has also issued a formal Interpretation in July 2015 that greatly limited the kinds and numbers of people that can be validly deemed “independent contractors.” There is a march of technology and it is difficult to meld the law with the technology. Commentators have noted that “trying to fit a law designed at a very different time to address different problems and a different type of economy and workplace is difficult, and raises issues.”
There has also been a geometric rise in “off the clock” working time cases. The issues of preliminary and postliminary “work” generate many controversies. The email/PDA cases persist and flourish; they are another example of the clash of law and technology. It is really the general “theme” of what constitutes “work” in today’s world that skews the number of suits upwards.
I have always preached that an employer cannot prevent lawsuits being filed against it. If you fire someone, that disgruntled employee may seek out a lawyer or file a DOL complaint and then the litigation wheel starts spinning. The best defense is to be proactive and undertake an objective examination (an internal audit) of all a company’s compensation practices, e.g. classification issues, working time policies, bonus, commission, vacation policies.
Fix what is broken and start eroding away, softly, the statutes of limitation.