Human Resources Tips

The number of wage and hour claims and lawsuits that workers have filed under the Fair Labor Standards Act (FLSA) and its state law counterparts have made wage and hour law the nation’s fastest growing legal battlefront between workers and their employers: Below are just a few examples:

Wage and Hour Settlements since 2007:


65 Million


98 million


30 million

Sony Computer

8.5 million

Here are five tips you can implement in your organization to avoid wage & hour complaints and lawsuits:

1. Conduct a wage & hour audit. Now is the time to become proactive, to be certain that your organization’s jobs are properly classified as being either “exempt” or “non-exempt” under the FLSA and DOL’s regulations. If you don’t have the time to conduct the audit yourself, hire an experienced HR consultant or attorney to perform this analysis.

2. Identify and focus on known “problem jobs” including jobs under the administrative exemption, IT jobs, outside/inside sales jobs, and first line supervision jobs. The FLSA evaluation tends to become difficult when evaluating the “threshold jobs” that are just on the border of transitioning from being “non-exempt” to “exempt.”  States who have more restrictive wage & hour regulations regarding specified jobs groups can also be problematic.

3. When in doubt, hire an expert to make the determination as to the proper classification status. Run the most difficult “problem jobs” by your labor attorney to make a final determination. Or….decide to manage this conservatively and classify “problem jobs” as being non-exempt to avoid any future problems. Of course, many employers don’t want to do this because of the overtime pay costs.

4. Bring your managers into the decision making process. Get additional information from them about the job’s responsibilities and duties as necessary, and use the time to educate them about why the job has to be classified one way or the other. You’ll have greater “buy-in” from them once the final decision’s been made because they were a part of the process.

5. Train your managersClarify and correct common managerial beliefs such as discretionary classification of jobs based upon their whim, the differences between “salaried” and “exempt,” and key elements of your compensation practices. Knowledgeable managers won’t allow unauthorized overtime practices, missed lunch or regular breaks from their employees.

The Department of Labor estimates that approximately 70 percent of businesses are out of compliance with wage & hour laws. Through implementing these five recommended practices, you could potentially save your organization thousands and maybe even millions of dollars in avoided complaints or lawsuits. If you suspect that your company has wage & hour issues, don’t wait for one of the 250 newly hired Department of Labor agents to show up on your doorstep before you address them!