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Articles : The Past Two Years Has Shown A Significant Increase in Costly Wage / Hour Litigation

The Past Two Years Has Shown A Significant Increase in Costly Wage / Hour Litigation

By: Peter A. Schneider

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By Peter A. Schneider

The Federal Fair Labor Standards Act (FLSA), and state law equivalent mandate payment of a minimum wage and payment of time and one half of a non exempt employee’s hourly wage for hours worked in access of 40 in a week. The concepts appear straightforward, yet for an increasing number of employers, particularly those in the food industry, the past two years has shown a significant increase in costly wage/hour litigation. All indicators point to a continuation, if not escalation, of this trend for a number of reasons.

First, recovery in a wage hour lawsuit is not limited to a single complaining employee. Typically, suits are filed on behalf of multiple plaintiffs or as a class or collective action. In addition to the recovery of damages equal to the unpaid wages, a successful plaintiff also receives statutory damages (equaling up to 125% of actual damages) and their attorney’s fees. Multiple claimants and enhanced recovery have made wage/hour lawsuits a haven for plaintiff’s lawyers.

Second, because of a less than stellar history of compliance, the food industry has been targeted by the U.S. Department of Labor (USDOL). “Fact Sheet #2 Restaurants and Fast Food Establishments” on the USDOL website specifies issues for scrutiny and investigation…