Wage and Hour Lawsuits Increase in Slow Economy

As anyone who has had a dispute with an employer over pay knows, it can be an intensely frustrating experience. Unfortunately, during these difficult economic times, more and more workers are finding themselves in exactly this situation as employers place greater demands on a shrinking workforce. A recent report estimates that lawsuits alleging wage-and-hour violations have risen 400 percent in the last 11 years, with 7,000 filed in 2011 alone.

Two frequent causes of wage-and-hour disputes are improper employee classification and inadequate compensation for overtime hours, either of which can leave workers feeling cheated out of their fair share - and both of which are illegal under state and federal labor laws.

Minnesota and Federal Worker Protection Laws

A federal law called the Fair Labor Standards Act protects workers by setting standards for minimum wage and overtime pay, as well as establishing recordkeeping requirements and child labor provisions for most employers nationwide.

Among other protections, the federal FLSA establishes the following standards for most employees:

  • A minimum wage of $7.25 per hour
  • Overtime pay of at least 1.5 times the regular wage for all work done in excess of 40 hours per workweek

In Minnesota, a state version of the FMLSA offers additional protections to workers employed in the state. These laws are intended to help protect workers' health and well being while preventing unfair competition.

Employee Misclassification

Wage and hour disputes often arise when businesses improperly classify workers as "exempt" in order to cut costs on things like payroll, recordkeeping and overtime. Generally speaking, exempt workers are paid a salary rather than an hourly wage and are not entitled to overtime pay. However, only certain employees can legally be classified as exempt. These typically include employees working in executive, administrative or professional roles.

Problems can also arise when workers are incorrectly classified as independent contractors rather than employees. While some workers truly are independent contractors, others are misclassified by their employers as a cost-cutting tactic. As a general matter, workers should usually be classified as employees if the employer exerts a large degree of control over how, when and where the work is performed. Employees who are misclassified as independent contractors are often deprived of important protections and benefits such as overtime pay, minimum wage and unemployment insurance.

Failure to Pay for Hours Worked

Many other wage and hour disputes occur when employers simply fail to pay their employees for all of their hours worked. These lawsuits have grown especially common in an era when employers frequently use technology such as smartphones and laptop computers to keep in touch with workers even during non-office hours. With the line between work and home life blurred, many employees end up going unpaid for the work they perform while not officially on the clock.

Get Legal Help

Workers who believe they have been improperly deprived of compensation for the work they do should contact a knowledgeable employment law attorney who can discuss the situation and provide advice about their legal options.