In a BLR webinar titled "Exempt or Nonexempt? How To Avoid the Misclassification Mistakes You Simply Can't Afford To Make," Aaron R. Gelb, Esq., explained that federal wage and hour class actions now annually outnumber race and sex discrimination class actions, which historically were the most prevalent employment class actions. In fact:
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- Federal wage and hour class actions increased from 6,120 in 2009 to 6,761 in 2010.
- Many of these collective actions allege the misclassification of groups of employees.
Why are so many class action wage and hour lawsuits being filed?
- Employers are misclassifying employees.
- It is relatively easier to certify a class action with this type of case.
- It is relatively easier to win or settle such cases.
- Plaintiffs' attorneys think these cases are like "shooting fish in a barrel.
- The U.S. Department of Labor is very pro-employee and is now referring cases to plaintiffs' firms.
These cases also have generous statutes of limitations:
- Two to three years under federal law
- Three years under Illinois law
- Six years under New York law
In addition, liquidated damages (double damages) are available to the parties suing, and attorneys' fees can be recovered.
The only effective way to limit the probability of your organization getting hit with one of these misclassification lawsuits is to correctly classify employees as exempt or nonexempt.
Aaron R. Gelb, Esq., is a shareholder at Vedder Price PC and a member of the firm's Labor and Employment Practice Area. Based out of the firm's Chicago office, he represents employers in all aspects of equal employment opportunity, wrongful discharge and labor relations litigation before federal and state courts, federal, state and local fair employment and administrative agencies such as the EEOC, the Department of Labor, and National Labor Relations Board. Gelb also partners with human resources consultants to develop a multi-disciplinary approach that combines the operations expertise of experienced HR professionals with an attorney's legal knowledge to develop real-world solutions in a cost-effective manner. He can be contacted at agelb@vedderprice.com.