More than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations, an approximately 400% increase since 2000. A collective action is a special type of class action suit that applies only to claims brought by a group of employees under the federal Fair Labor Standards Act, claiming they were not paid what they were owed because either they were misclassified as exempt from overtime or they were properly classified as non-exempt but they were not paid for some of the time they worked (for example, by being required to work off the clock without being paid.).
These are high numbers! Is it simply because employers don’t know the law or don’t care about the law? I don’t think so.
I think one of the culprits is the current economy and job market. When the job market is good, employees don’t get angry — they just leave one company and go to another.
A second reason for these suits has to go to the ambulance chasing attorneys. Just because someone has a law degree doesn’t make them ethical. Going after big companies, especially the ones with deep pockets screams “cha-ching!” for attorneys.
People shouldn’t be discriminated against or mistreated at work and employees have the right to sue when they’re mistreated. But I can’t help but wonder: where does the money come from that’s awarded to the victims? Your profit sharing? Your next salary increase? Sure many companies have EPLI but a large claim (depending on the policy variables) can cause a company to be non-renewed or not able to afford the renewal premium.
At some point, we’ll all pay for these lawsuits, somehow someway. What do you think?
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Kimberly, one of the few times that I will disagree with you..
This is the fault of Ignorant Employers being Educated by More ignorant employers on how to Be Ignorant.. nothing more or less.. Well of course outside of greed! – Some people just really didn’t know, or understand the laws.. they really were just Ignorant of the law.. ignorant of the process, and ignorant of the employee rights
Misclassification reached a Hey Day before the Recession.. And since the Recession, the new Administration has actually done more than any previous president to put a nix on this. Both the DOL and the IRS hired 300 Employees EACH, to focus on Wage and Hour violations.
This is such a problem that In fact back in 2005 The U.S. Department of Labor (DOL) estimates that as many as 70 percent of employers aren’t in compliance with the FLSA in some material way
– Collective claims of employee misclassification as exempt or not exempt from overtime pay under the Fair Labor Standards Act (FLSA) have increased a whopping 77 percent during the first half of the Last decade — This was during the HEIGHT of employment.. the height of the best of economy.. Dumb companies learned dumb things about how to squeeze employees more, and attempt to justify it..
I actually do think that miclsassification helped contribute to to the downfall of the economy. Less $$ to trickle into the economy – to take care of financial concerns; less discretionary income; and of course with no health care, no benefits, no unemployment… well you can see how much less money to be able to give back to the economy.
Regarding ambulance chasing lawyers.. One cannot File a Mislcassification lawsuit until there is a right to sue awarded.. and all lawyers will take this on for free, because the Government has done the leg work for the employee in question.. but most are “settled” by the government, and don’t make it to lawsuit, unless it is class action, and generally you will find the Government handling that as well.
Today, it does continue, and it is still of ignorance.. hey on one PUBLIC H.R board, I had a lady actually EDUCATING her H.R peers on the how to hire an “employee” w/o paying any of the witholdings.. and Yeah, she was very sure that what she was doing was legal… so much so, that of course she represented the tired – but my attorney told me I could.. – Maybe she should have spoken to her accountant?
That string is long gone, so I guess she has since changed her ways? Anyways, it is a sad situation that costs our economy TRILLIONS of dollars,… Yes, TRILLIONS..
Hopefully better education can ensue.
Excellent points Karen and I do agree with you. The numbers are scary of companies that are not in compliance for sure. The numbers you stated are scary and I certainly hope that companies are paying attention and making some changes with training and pay practices.
Thanks for visiting!
Thanks Kimberly,
it is a subject of which I have a tremendous amount of passion. Have attempted to educate our industry a lot on this matter; sadly, and ironically, especially considering that we are in the employment industry – too many of our peers are misclassified as Contractors, where they are infact employees.
I have seen many lose homes, due to not having unemployment, or medical benefits. I have seen so many go through financial distress when they lost their job. And yet so many will continue to take these jobs, because that is what the employers will offer.
Employers will offer low salaries so that CEO’s can make over 300 Times that of an average worker. Salaries for CEO’s went from 143 times more, to over 300 times more since this year alone. These guys make more money in One Work day, than their employees do in 52 Weeks.. And they do so.. by taking more from them, and expecting more..