Are You Getting Closer to a Wage and Overtime Claim?

Last year, employers paid out nearly $180 million in back wages to more than 208,000 employees in minimum wage and overtime claims as a result of federal wage and hour law violations. With the number of complaints registered increasing more than 34% from 2008 to 2010 (24,000 to 32,000 cases annually), this trend is expected to grow again in 2011. Unfortunately, the vast state and federal legislation now in effect, coupled with the fact that most new job growth in America occurs in low-wage occupations, the odds of getting hit with one of these claims increases every year.

These claims are particularly common in businesses with historically low wages, such as restaurants and agricultural related industries. Studies have shown that wage determination for employees that depend on tips has become one of the most complex areas of wage and overtime hour law; both at the state and federal level. Unfortunately, due to the variation found from state to state relative to tip credits, tip pooling and service charges, the potential (and complexity) for legal exposure continues to grow. Additionally, due to the increased use of contract employees in the high-wage sector (including information technology), employee misclassifications have led to an increase in overtime class-action lawsuits, resulting in multi-million dollar settlements.

And it’s getting easier for employees to pursue wage and overtime claims…

This past May, the U.S. Department of Labor (DOL) released a free time sheet application, which can be easily downloaded to the 45.5 million Smartphone users in America. The app was designed to help employees track their work time, breaks, overtime and wages owed. It also highlights information about wage and hour laws at the federal level, and provides DOL enforcement contacts. The agency notes that “wage and hour information tracked independently by employees could prove invaluable during a government investigation”.

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