Employers are increasingly targeted by class actions and government audits on wage and hour issues. Plaintiffs’ lawyers typically solicit former and current employees to form a “class” to challenge the “exempt” employee designations of employers with large numbers of exempt employees. Then they challenge that classification in court in order to impose overtime liability. Results? Often there are enormous monetary awards for the class members and their counsel—and devastating losses to the employer.
The Department of Labor (DOL) has been engaged in an all-out war since 2008 on enforcement of misclassification of employees, targeting employers that misclassify employees as independent contractors and employees misclassified as exempt.
You can expect increased enforcement by the DOL this year with regard to FLSA misclassifications by employers. This crackdown is supposed to bring in at least $7 billion for the federal government over 10 years.
The Department of Labor is hiring more investigators, developing mobile applications for employees to track their work, meal periods and rest periods, looking for ways to catch employers violating FLSA.
The next wave of wage and hour violations is off the clock overtime… As technology changes the way we work; the workplace needs to adapt and develop a policy that keeps them in compliance. Mobile communication devices, laptop computers, mobile applications allow employees to work anywhere and anytime. We love the convenience until we have to pay overtime for 24-hour access.
Employers need to audit their employment practices and make sure they are in compliance with employment law. Fair Labor Standards Act violations represent a significant risk to employers. Misclassification is the low hanging fruit; the misclassification results in the employer not having the records needed to win. Employers should have a third party audit their employment practices.