Federal wage-and-hour lawsuits have been increasing steadily over the past decade. The number of cases has gone up almost every year since 2000. Nationally, the number of cases filed in 2011 is over 380% higher than the number filed in 2000. The trend is similar in Kansas, with a nearly 350% increase in cases filed in 2011 compared to 2001.
Why? The poor job market is at least partly to blame. When employees get laid off and cannot find other work, they are more likely to look for ways to get money out of their former employer. In addition, several high-profile cases and aggressive Internet marketing by lawyers have made workers more aware of their rights under wage-and-hour law. These cases are attractive to lawyers who represent employees for several reasons: there is no requirement to prove intent or unlawful motive--either the employer followed the technical requirements of the law or it didn't; they are relatively easy to bring as group actions on behalf of all similarly situated employees; and the law provides for recovery of attorneys' fees if the employee prevails.
The Wichita Eagle ran a feature story about the increase in wage-and-hour claims in its Sunday Business section. Kansas Employment Law Blog author Boyd Byers, who was quoted in the story, explained that most wage-and-hour cases fit in one of three categories:
- "Misclassification" cases, where the issue is whether the employer misclassified non-exempt employees as being exempt from the law's overtime requirements;
- "Off-the-clock" cases, in which employees allege they were not properly paid for all of their time spent performing work; and
- "Overtime-rate-miscalculation" cases, where the employer arguably failed to include additional compensation, such as shift differentials and certain types of bonuses, into the straight-time pay rate for purposes of calculating the overtime rate.
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Wage-and-hour law is highly technical and often tricky and counterintuitive. And, in court, employers bear the burden of proving that employees are exempt from overtime pay. It is not a defense to liability that the challenged pay practice is agreed to by employees, inherently fair, or the industry norm. So employers would be well-advised to consult with a lawyer and ensure that their pay practices pass muster. Ignorance of the law is no excuse.