How to Prevent Wage and Hour Lawsuits from Costing Your Business

business-transactionsMany employers are not clear on how to classify some of their employees and can run the danger of misclassification. These types of errors can lead to extremely costly wage and hour lawsuits that could do significant damage to any business.

How Common Are Wage and Hour Violations?

According to the Department of Labor, there have been more than 150,000 complaints of wage and hour violations since 2007. Of those, over 115,000 were found to be substantiated claims.

More than 60 percent of the violations listed were pertaining to FLSA violations, including back wage payments and overtime law violations.

In total, the back wages were in excess of $1.5 billion with another $75 million in civil penalties.

How Can I Prevent Wage and Hour Lawsuits?

There are a few ways to go about making sure that your company remains in compliance with wage and hour employment law, including:

  • Training – Wage and hour laws are often complicated and vary not only from state to state, but from industry to industry as well. All human resources and business execs should be properly trained to understand any applicable wage and hour laws.
  • Discourage “Off-the-Clock” Work – A common mistake business owners make is to allow employees to work “off-the-clock,” which can lead to numerous overtime violations and potential lawsuits. Keep solid records regarding exactly when employees work and be sure that they understand that they are not allowed to work while off-duty.
  • Know Exemption Rules – Certain types of employees are exempt from earning overtime pay, but this is measured by duties performed rather than title. Just because an employee’s title says administration doesn’t mean they are necessarily exempt from overtime.
  • Do Not Misclassify Employees – Know the difference between an employee and an independent contractor. Whether it’s by accident or intentional, misclassifying an employee as an independent contractor or vice versa will land you in hot water.

The Monmouth County business law attorneys at Garland & Mason, L.L.C. have years of experience dealing with wage and hour lawsuits. Call or fill out an online form today to learn how our employment law attorneys can assist you.


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