In 2010, there was a 10 percent increase from 2009 in wage and hour collective- and class-action cases under the Fair Labor Standards Act (FLSA). “Collective” and “class” actions are lawsuits with multiple plaintiffs filed by employees who perform substantially the same job.
The number of wage and hour cases began to climb as a result of employee misclassification. Employees would sue their former or current employer, claiming they were “misclassified” as exempt from overtime and should have been paid time and a half for hours worked over 40 in a workweek. Misclassification cases remain the source of much of the wage and hour litigation filed by employees in midlevel management positions. In addition, there has been an increase in “off-the-clock” claims because of better technology such as smartphones, which make it easier for employees to work while they’re away from the office and off the clock.
Finally, one area of wage and hour lawsuits that could see an increase in the upcoming year is independent contractor misclassification. The U.S. Department of Labor’s “right to know” initiative requiring employers to reanalyze their independent contractor classifications could create more lawsuit headaches for employers.