Businesses have to comply with the law and also have to compete with one another for the best talent available. Employees can make a huge difference to a company’s reputation and how efficiently it operates.
Workers are also a source of liability. They can harass one another, do poor work that leads to consumer lawsuits or decide to sue the company that hired them. Employee lawsuits can arise for a variety of different reasons. One of the most common issues that generate employee lawsuits is a dispute about wages. Employers sometimes make choices that increase the likelihood of workers pursuing wage and hour claims against an organization.
What types of employment practices may increase the risk of wage and hour lawsuits filed by frustrated employees?
Requiring unpaid labor
Hourly workers generally have a right to receive pay for all of their time performing job tasks. Employers sometimes ask workers to do certain tasks before they clock in or after they clock out at the end of a shift. Those tasks could potentially add up to many hours of unpaid wages. Similarly, companies may expect workers to be available on-call during their time off or to come in for unpaid training. Workers who do work without compensation may want to take legal action against the company to seek payment for the time they already worked.
Paying a low salary
Salary employment arrangements are theoretically a way to prevent expensive overtime pay. However, not all salaries are actually sufficient to exempt workers from overtime rules. Workers who discover that their salaries are under the federal threshold might file an overtime wage lawsuit. There was actually an increase to the minimum salary amount with another one on the way at the beginning of next year. Employers might not even know that they are non-compliant with current regulations.
Enforcing a no-overtime policy
Businesses may try to control Staffing costs by effectively banning overtime work. Requiring approval from management or the corporate offices can prevent workers from showing up early and staying a little late to bump themselves into overtime eligibility. Companies are within their rights to require pre-approval for overtime and to prevent workers from putting in more than 40 hours. However, they might face lawsuits if they allow workers to put in more than 40 hours and then refuse to pay them.
Organizations that learn from the mistakes of other businesses can diminish their chances of a wage and hour employee lawsuit. Ensuring compliance with state and federal payroll regulations can help companies effectively respond to a lawsuit if workers try to take legal action.