Wage claims keep rising. According to the Seyfarth Shaw law firm, there has been a record number of federal lawsuits alleging the failure to pay overtime and other wages, representing an increase from prior years.
An article in Corporate Counsel magazine discussing the Seyfarth Shaw report states that these claims usually fall into one of three categories:
Common types of wage claims
- Salaried employees who believe they are owed overtime pay
- Hourly workers who contend that they weren’t paid for all hours worked
- Restaurant workers who claim that they received no additional pay under the FLSA “tip credit” provision
According to Seyfarth Shaw partner Noah Finkel, DOL investigators have been focusing on hospitals and restaurants. These cases, once concentrated in a few states, have spread to other jurisdictions. He and other attorneys suggest you conduct an audit or assessment of your wage and hour practices; see Wage and Hour Insurance for options that can help manage risk.
Recommendations
- If you're uncertain whether employees are exempt or nonexempt, treat them as if they were nonexempt. You can still pay the same annual amount as long as you calculate the appropriate wage rate when including overtime payments.
- Use an employee compliance survey or similar tool to find out if there are concerns about wage payment and follow up on any affirmative answers.
- Consider hours worked both before and after a scheduled shift. For example, a warehouse required employees to go through a security search before leaving and was required to pay wages for that screening time.
- Know the rest and meal period requirements in your state. Federal law does not govern these breaks, so verify your state provisions and related coverage information at Fair Labor Standards Act (FLSA) Insurance Overview.
If you have questions about compliance or coverage, review your practices and, when appropriate, talk to an agent who can help identify potential exposures and insurance options.
Frequently Asked Questions
What are common triggers for wage-and-hour claims?
Common triggers include misclassification of employees, unpaid overtime, off-the-clock work, and improper application of tip credits.
How should employers handle uncertain exempt status?
If status is unclear, treat workers as nonexempt and track hours to avoid unpaid overtime risk while you review classification.
Do state meal and rest break rules differ from federal rules?
Yes. Federal law does not require meal or rest breaks, so employers must follow applicable state laws and policies.
When is it worth conducting an internal wage-and-hour audit?
Conduct an audit if you have rapid growth, use varied pay practices, receive worker complaints, or operate in industries with frequent claims.