The Fair Labor Standards Act (FLSA) and state wage and hour laws generally require employers to pay employees a minimum hourly wage and overtime for working more than 40 hours a week. These statutes also classify workers who are required to receive overtime pay. Cases in which hourly employees claim they were not paid properly, including for overtime or tips, have increased in recent years. Most of the claims involve mis classifieds employees as exempt from the FLSA. Major settlements went up in 2012 from the previous year, with the top 10 settlements totaling $292 million, up from $221 million in 2011. The number of FLSA lawsuits have nearly quadrupled, to 7,064 in 2012. Getting employee classification right saves the employer time and money.
Insurance companies are limiting their coverage of wage and hour violations because their experience has been costly.
Violations of FSLA require employers to pay “liquidated” damages and interest as well as unpaid wages. Defending and paying wage and hour claims is not cheap.