Wage and hour lawsuits continue to cost employers big time, according to a recent report by NERA Economic Consulting.[i] And if your company employs hourly workers, these finding can help you spot and address your own vulnerabilities.
NERA’s economists have been studying wage and hour settlements since 2007, drawing on available published information. The current report analyses 344 class action settlements and covers 2007-2011.
You can read the entire 14-page report on the NERA website. In the meantime, here’s what struck us most.
Up, Up, Up
Large numbers of wage and hour cases continue to be filed in state and federal court, and employers continue to pay pricy settlements. The average reported settlement is $8.5 million per case, with a per plaintiff average of $5,600.
The number of plaintiffs per class action case ranges widely, from less than 1,000 to more than 100,000. The duration of the alleged class periods range from 1-15 years. The longer the class period, the higher the settlement.
Where Employers Get into Trouble
In every case, the plaintiffs maintain that their employers failed to pay them owed compensation. While there are a number of allegations, here’s how the numbers break down:
|Allegation||Percentage of Cases|
|Misclassification of exemption status||17%|
|Missed, short, or late meals and breaks||15%|
|Unpaid donning and doffing time||4%|
|Failure to pay minimum age||3%|
|Improper tip pooling||2%|
So, this is where you’re most likely to run into problems. And keep in mind, two particular types of cases are sharply on the rise: unpaid overtime claims and missed meals and breaks.
Now, Ask Yourself…
How does your company stack up here? Are your compensation procedures correct and well-documented? Do you have a foolproof time and labor management system in place?
If not…well, we do. And if you’d like to know how we can help you with this, please feel free to Contact Us.