Shelter From The Storm: Surviving The FLSA Litigation Hurricane

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04/25/2017

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Shelter From The Storm: Surviving The FLSA Litigation Hurricane

By Kevin Cleveland

Employers will need to be even more careful this year than in the past to guarantee compliance with all labor laws as enforcement agencies and plaintiffs’ attorneys are expected to be even more aggressive in filing class actions under the Fair Labor Standards Act (“FLSA”).  A recent report by Syracuse University indicates that following a record setting 2015 for FLSA wage-and-hour lawsuits filed in federal courts with almost 9,000 filings, 2016 is expected to be even worse, becoming the third straight year to see a rise in FLSA lawsuits and continuing the steady upward trend over the last fifteen years.  In fact, since 2000, FLSA filings in federal court have increased by over 450%.

It should come as no surprise that FLSA lawsuits are on the rise given minimum-wage increases in many states and municipalities, increasing scrutiny on worker classification, increased scrutiny on wage statements, an increased use of the dual employment doctrine, and a greater emphasis being paid to how and when employees are paid.  In California the passage of AB-1513, the raise in the minimum wage that took effect at the beginning of the year, the passage of multiple other employee-friendly regulations and laws in recent months, and the growing involvement of both federal and state agencies in prosecuting cases involving wage and hour violations all but guarantees that there will also be an increase of wage and hour class action and Private Attorney General Act lawsuits in 2016.

Also of concern, though not specifically linked to FLSA lawsuits, a recent report on litigation trends indicates that initial class certifications were up from 70% in 2014 to 75% in 2015 and that the total amount of the top 10 employment law cases in the United States skyrocketed from $1.87 billion in 2014 to $2.5 billion in 2015.  In all likelihood, the increase in wage and hour class action lawsuits, increase in class certifications, and increase in settlement values are likely all feeding off of each other drawing more Plaintiffs’ attorneys who recognize that FLSA, and other wage and hour, lawsuits represent a chance for a huge return on the costs and time invested into a case.  This can only mean a continued increase in such lawsuits for the foreseeable future.

COUNSEL FOR MANAGEMENT:

Despite this sad state of affairs, all is not lost.  After all, the only way to ultimately lose a FLSA lawsuit, or any wage and hour class action lawsuit, is to actually violate the law.  As a result, it is now, more than ever, essential that companies work hard to guarantee that they are in compliance with all applicable wage and hour laws.  Like with any hurricane, the time has come to batten down the hatches and the make sure that your ship is water tight to weather the storm.  Though the prospect of paying attorneys to audit wage and hour practices is an expensive one, being in compliance will save you far more than that in money and peace of mind.  The attorneys at The Saqui Law Group have extensive experience with wage and hour laws and are ready to help make sure that your Company is complaint in 2016 and can better weather the coming storm of litigation.

 


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