Wage and Hour Claims Among Top Threats to U.S. Employers

May 21, 2013

Federal wage and hour lawsuits have reached a surprise record high, according to a report by law firm Seyfarth Shaw LLP.

Cases filed under the Fair Labor Standards Act (FLSA) in have continued to skyrocket in 2013, despite indications that these filings had moderated during the past 12 months, the firm said.

There were 7,764 FLSA cases filed in 2013, up 10 percent from 2012 which saw 7,064 cases filed, according to data from the Federal Judicial Center.

Richard Alfred, chair of Seyfarth’s wage and hour litigation practice, said the claims forming the bulk of these numbers include misclassification of employees, alleged uncompensated “work” performed off the clock and miscalculation of overtime pay for non-exempt workers.

“With no clear catalyst during the past 12 months, this strong spike and new high for FLSA claims makes them one of the top threats to U.S. employers,” said Alfred. “We’ve seen an astonishing rise in FLSA claims, but with a slim one percent increase in 2012, it’s surprising to see a sharp increase like this.”

Alfred believes several factors may be responsible for the jump in 2013 filings, including:

  • The improving economy may provide incentives for plaintiffs’ counsel to sue new and relatively unsophisticated companies, employers whose workforces are growing, and companies whose improved financial position has made them more attractive targets.
  • The economic recovery has seen an increase in employment demands on all employees, both exempt and non-exempt, which cause them to question their employer’s pay practices.
  • More lawyers who had not considered wage and hour claims in the past–both employment specialists and general practitioners–are now filing wage and hour lawsuits, perhaps motivated by large settlements in past cases.
  • Employees are more sensitized to wage and hour issues, at least in part as a result of their access to social media.

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