“Wage and Hour” Lawsuits

According to a recent analysis of data by the Federal Judicial Center, “wage and hour” lawsuits in which workers are taking their employers to court over unfair pay have skyrocketed 432 percent in the past twenty years.

The research (conducted by the law firm Sayfarth and Shaw on behalf of the Federal Judicial Center) shows that it jumped 10 percent in just the last year.

An Increase in Lawsuits, But why?

The law firm concludes this increase might be a result of the economy picking up steam as well as “social media,” and the public's inclination to post their grievances to Facebook, Twitter, etc… An increased number of lawyers are now looking to bring awareness and sensitivity to these issues.

But advocates of workers are more apt to claim a different reason: the inability of the Department of Labor (DOL) to properly ensure employers are in compliance with the law. As a result of the DOL's lack of resources, workers have had to turn to courts to ensure they are paid fairly.

According to Cathy Ruckelshaus, the legal co-director for the National Employment Law Project, “The employers were emboldened because there wasn't enforcement, so the violations increased. There was a lot of low-hanging fruit in terms of violations.”

According to ThinkProgress, while all wage and hour lawsuits involve a dispute over how much money a company owes to an employee, the suits typically fall into three sub-categories:

1. Hourly employees claiming they weren't paid for all of the hours worked,

2. Salaried workers claiming they're owed overtime,

3. Employees working for the tipped minimum wage claiming they didn't make enough in tips to bring their pay up to the minimum wage rate.

But the economic downturn might also be to blame as employers were able to squeeze more out of workers concerned with keeping their jobs in an environment of high unemployment.

According to an April 2012 report from the Wall Street Journal S&P 500 companies made an average of $420,000 per employee in 2011, a full ninth more than in 2007.

“When the recession first hit, employers felt even more emboldened to violate the law because there was high unemployment and we rely on workers to complain,” Ruckelshaus said.

Bank of America and Taco Bell were hit with lawsuits

Companies such as Bank of America and Taco Bell were hit with lawsuits alleging they owed employees money during the recession and recovery. Patricia Sloan, a shift manager at Taco Bell is one such employee that has filed a lawsuit against her employer for overtime pay violations.

In her case, Sloan is claiming that managers were sometimes denied pay for their employee attendance, and that they were also forced to adjust time cards in order for the company to avoid paying overtime. If Taco Bell is found to be in violation they could be ordered to pay overtime back wages as well as penalties for their noncompliance to the Fair Labor Standards Act.

According to Ruckelshaus, the boost in lawsuits could be good news for employees because it sends a message to employers that they have to comply with laws, or face the consequences.

“The idea is that employers make decisions that don't violate the law because they figure ‘we better not do this because we're going to get caught,'” she said.

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Peter K. Levine A Professional Law Corporation