Wage-and-hour lawsuits are becoming a major concern for employers. Many factors have led to an increase in wage-and-hour claims including the complexity of federal and state laws as well as workers laid off due to the continued poor economy.
According to the Department of Labor there were 40,000 wage-and-hour complaints during 2010, a 15% increase from 2009. Generally speaking, claims fall into two major categories: misclassification of workers as exempt, and unpaid overtime. Additionally, there is the problem with employers misclassifying employees as independent contractors.
It is important for employers to be in full compliance with labor requirements and to invest in an effective and comprehensive H.R. risk management program. The complexity of regulations make it difficult for employers to be in full compliance, but it is imperative to focus on the proper classification of employees and observance of overtime regulation. Relying on insurance to help offset wage-and-hour legal costs may prove to be very costly.
* This is for educational purposes only.