The Department of Labor's Wage and Hour Division has been cracking down on labor violations in recent years. In 2016, more than $266 million in back wages were collected on behalf of more than 280,000 workers. As these efforts increase, employees have also become more aware of their workplace rights and the actions they can take against employers who have violated labor laws. This is why it is important for employers to be aware of what they can do to avoid wage and hour lawsuits.
Wage and hour lawsuits usually arise from employees who feel they have been mistreated and unfairly paid. These lawsuits range from employees seeking overtime pay to employees challenging how they have been classified by their employers. Employers should review their HR policies and employee classifications to make sure they are not violating labor laws.
In addition to becoming familiar with their work policies and classifications, they should also be clear about what the duties of their workers are. This goes beyond knowing their job descriptions, and requires employers to actually know and understand the actual everyday duties before designating their workers as exempt or non-exempt. Wrongly classifying an employee as exempt and then denying them overtime pay is a common mistake made by many employers that can cost their company a significant amount of money.
When classifying an employee, employers should consider the following:
- Does the business control or have the right to control what the employee does and how they do their job?
- How are the business aspects of the worker’s duties controlled? This includes things like how the worker is paid, if expenses are reimbursed, and who provides tools/supplies.
- Does the employee have a written contract or employee-type benefits?
- Will the relationship continue with the employee, and is the work they perform a key aspect of the business?
Need help with avoiding wage and hour lawsuits? Contact our Houston team of employment lawyersto schedule a consultation today.