Posted on August 7, 2008 9:00 AM by
Shanti Atkins
$24.4 million - that's the average settlement award for a lawsuit alleging violations of state wage & hour laws. [1] 250 percent - that's how much federal Fair Labor Standards Act (FLSA) complaint filings have increased since 2003. [2] The numbers are staggering, but House Democrats are vowing for even stricter enforcement standards of wage and hour laws.[3]
2009 is shaping up to be a grim year for employers. And the wage and hour war continues to wage (pun intended) on.
ELT just wrapped up a survey of more than 2,000 legal, ethics, and HR professionals and the results are eye opening. 60 percent of respondents reported that either their employees were not accurately reporting all hours worked, or they didn't know if they were. More than 40 percent of respondents were not confident that their employees even knew how to file a wage and hour complaint - a gaping hole that drastically increases liability, and that the plaintiff's bar is eager to jump in.
While 60 percent of respondents in an earlier ELT survey reported providing extensive harassment and discrimination training to their workforces, most employers are surprised to learn that there are now more wage and hour class action lawsuits than class actions arising from all other forms of discrimination, combined. Despite the growing tidal wave of risk exposure, less than a quarter of respondents reported providing any kind of wage and hour training to their employees.
The survey really underscores that employers are only just beginning to realize most wage and hour violations are easily preventable. With proper policies and training, employees and managers will understand and follow critical time keeping policies - eliminating the most common violations. As importantly, employers who conduct comprehensive training can use it to help establish an affirmative 'good faith' defense in litigation, reducing their potential liability by as much as two-thirds.[4] That makes training a no-brainer – the ROI justification is black and white.
Another benefit of broad scale wage and hour education? Consistent training of all employees can help to fight class action status certification - a phenomenon that is fueling the most high profile, and the most costly, wage and hour lawsuits.
If you haven’t already, check out ELT's online Wage and Hour course. It educates employees and managers about the basics of both federal and state wage and hour laws, as well as each employer's unique policies. The most powerful feature? The program intelligently configures its content based on the state location of each learner -- a critical component given the important differences among state wage and hour laws, which drive more litigation than their federal counterparts.
And stay tuned for more benchmarking studies from ELT – with the 2009 harassment re-training year around the corner, we’ll have some interesting data to share soon.
[1] Measuring the Value of Class and Collective Action Employment Settlements: A Preliminary Assessment, a study published in December 2007 by New York University School of Law Profession Samuel Estreicher, available at:
http://lsr.nellco.org/cgi/viewcontent.cgi?article=1065&context=nyu/plltwp
[2] Judicial Business of United States Courts, 2007, Table C-2A, available at: http://www.uscourts.gov/judbus2007/contents.html
[3] See http://www.elt-inc.com/blog/2008/07/dol-needs-to-step-up-enforceme.html
[4] See http://www.elt-inc.com/docs/Training_Damages_and_ROI.pdf