New fiscal year, same soaring wage and hour statistics, as the top labor and employment law claim continues to be filed at a record high. Wage and hour claims were filed at an all-time high in Fiscal Year 2014, totaling 8,160 lawsuits initiated. This year, the top claim in employment litigation has jumped another 7.6% overall, totaling 8,781 wage and hour suits in FY15.
One of the primary reasons for the steady growth in wage and hour litigation filings is the overall increase in wage and hour awareness nationwide. The Obama Administration proposed new overtime rules this summer, with plans to amend the “white collar” exemption by Fall 2016.
There has also been an undeniable increase in independent contractor suits in recent years, with major businesses like FedEx and Uber making headlines. This summer, the Department of Labor issued guidance on independent contractor classification that interpreting the Fair Labor Standards Act broadly, covering most workers under the classification of “employees.” Additionally, the National Labor Relations Board issued a decision earlier this year that expanded joint employer status under the National Labor Relations Act.
Year after year, wage and hour case filings have exponentially increased, starting with 1,960 filings in 2001. The following year, wage and hour case filings increased by a whopping 99.2% with 3,904 law suits filed in 2002. While the past five years have not seen such a dramatic overall jump in wage and hour filings, the employment law world is still seeing a steady 8% increase on average each year.
Overall incidences of wage and hour federal court filings have exploded by 450% in the past fifteen years. According to Seyfarth Shaw LLP, this year’s filing number of 8,781 wage and hour cases totals more than any two pre-2005 years combined.
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Nationwide discussions have taken place regarding the potential of increasing federal minimum wage in the private sector, and many major employers have contemplated increasing minimum wage within their own companies to stay competitive. State and local authorities throughout the United States have proposed minimum wage increases, as well.
In addition to the changes in wage and hour laws leading to more claim filings of late, employees have become more aware of their ability to sue for perceived management missteps. Plaintiffs’ lawyers have been successful influencing large settlements and jury awards due to the increase in wage and hour case filings.
As Forbes put it earlier this year, “Another Fortune 500 titan, another misclassification suit.” Lowe’s kicked off 2015 by joining the likes of Google, FedEx and Uber when the retail giant paid its misclassified home improvement contractors $10 million to settle misclassification claims. Like all independent contractor misclassification suits in the past year, Lowe’s downfall was exerting too much control over the business practices of its employee “contractors.”
Now is the time for employers to take a close look within their businesses at the practices and policies in place. Employers – now more than ever – should speak with experienced employment law attorneys to ascertain whether they may be at risk for potential wage and hour issues such as pay practices (including overtime and minimum wage policies), timekeeping practices, independent contractor classifications, exempt status classifications, pay deductions, and recordkeeping.
The above-referenced statistical data is based on a fiscal year that ends September 30.