Given the fact that class action wage and hour lawsuits on the rise and that damages resulting from such cases can be costly, it is in employers' best interest to make sure that their employees are properly classified.
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Get Your Report Now!In a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make," Roy P. Salins, Esq., explained that an employer who violates the Fair Labor Standards Act (FLSA) must pay double or liquidated damages unless "the employer shows to the satisfaction of the court that the act or omission giving rise to [the employee's claim] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act." 29 U.S.C. § 260
This requires an affirmative act on the part of the employer, such as relying on a Department of Labor (DOL) opinion letter or conducting an audit and obtaining an outside legal opinion that a position is exempt. Absent one of these, it is assumed that liquidated damages are available to a prevailing claimant in a misclassification issue.
Here is some advice to help protect your organization from wage and hour lawsuits:
- Update your job descriptions and make sure they are written to support and strengthen your classification decisions.
- Develop a "safe harbor" policy providing an avenue for employees to raise issues about deductions from pay.
- Train supervisors on the company's wage and hour policies.
- Have an "open door" wage and hour complaint reporting system.
- Call your outside counsel whenever you have any questions.
Roy P. Salins, Esq., is a senior associate Labor and Employment Practice Area of Vedder Price PC. Based out of the firm's New York office, Salins's practice includes all aspects of litigation in federal and state courts, administrative agencies, and in arbitrations before FINRA and the AAA. Salins also devotes a large part of his practice to counseling clients in all areas of labor and employment law, compliance with federal and state nondiscrimination and wage statutes, and issues relating to reduction in force, employee compensation, benefits, staffing, hiring, discipline and discharge. He can be contacted at rsalins@vedderprice.com.