It's Time to Schedule a Wage and Hour Check-Up to Avoid Costly FLSA Lawsuits

Miller & Martin PLLC Alerts | March 15, 2016


by Charles B. Lee

It's time to schedule your check-up -- your wage and hour check-up -- designed to try to prevent your company from becoming a defendant in a costly wage and hour lawsuit. Every year more wage and hour lawsuits are filed against employers under the Fair Labor Standards Act ("FLSA").

In 2015, a record number of 8,954 FLSA lawsuits were filed against employers in federal court. This is a 450% increase in FLSA lawsuits filed in federal court since 2000. These wage and hour lawsuits -- often brought as class or collective actions on behalf of large numbers of former or current employees claiming overtime or other misclassification violations -- cost employers millions of dollars. In 2014, for example, the median FLSA settlement paid by employers was $5.3 million.

Many of these wage and hour lawsuits could be prevented, or the exposure greatly reduced, by periodically conducting a wage and hour check-up. A wage and hour check-up typically is performed by experienced wage and hour outside counsel that (1) conducts an attorney-client privileged review of the way your company's employees are paid in order to detect and diagnose FLSA issues, and (2) provides confidential legal advice to the employer on how any detected FLSA issues might be cured or at least mitigated. 

The Department of Labor ("DOL") soon will issue final regulations dramatically changing the law governing overtime exemptions under the FLSA. These new regulations will provide a perfect time and opportunity to schedule a preventative wage and hour check-up to see whether your company has an FLSA issue that can be resolved up front rather than after the fact in court at the wrong end of a lawsuit.

We also will be hosting two seminars next month concerning these DOL developments, one in Nashville on April 19 and one in Chattanooga on April 21.

In the meantime, as always, please feel free to contact Chuck Lee, Karen Smith, or any member of our Labor & Employment Law Practice Group to discuss setting up a "wage and hour check-up" or to discuss any other wage and hour law-related questions.

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