Employers can take proactive steps to avoid liability when it comes to wage and hour issues, but it is important to understand how the damages can compound, Joseph K. Mulherin, Esq., said in a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make."

He used the following "conservative" damages example to illustrate how quickly the damages can add up. The example involves five supervisors suing for overtime for the past three years and assumes that each earned $40,000 and worked 2,250 hours per year. It also provides information on how the damages would rise with a class of 20 employees.

Overtime Calculation

$40,000/2,250 = $17.78

$17.78 x ½ = $8.89

$8.89 x 250 = $2,222.50 x 3 years = $6,667.50

Add liquidated damages = $6,667.50

Each individual gets $13,335.00

For a class of 5 = $13,335.00 x 5 = $66,675.00

For a class of 20 = $13,335.00 x 20 = $266,700.00

Note: The figures above do not include attorneys' fees, which an employer typically must pay for the class if the employer loses a case, nor do the figures include the employer's attorney fees.

Here are a few key points for employers to keep in mind about wage and hour lawsuits:

• These lawsuits are not going away.
• Large settlements are announced every day.

Joseph K. Mulherin, Esq., is a senior associate in the Labor and Employment Practice Area at Vedder Price PC. Based out of the firm's Chicago office, he counsels and represents public- and private-sector employers nationwide in a variety of traditional labor and employment law matters. Mulherin has significant experience with wage and hour matters, having counseled clients on a multitude of issues and successfully litigated numerous single-plaintiff cases and large class actions. He can be contacted at jmulherin@vedderprice.com.