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Defending an Unpaid Wage & Overtime Pay Lawsuit or a DOL Audit

above-the-bar-logo-no12Several of my employees have filed a lawsuit or claim with the Department of Labor’s Wage and Hour Division against my company claiming that I am not paying them their correct hourly wage, overtime pay, bonuses, and benefits. How can I protect my company from having to spend thousands of dollars defending against this type of lawsuit?

Wage and hour lawsuits have been on the increase as many workers have lost their jobs over the past few years and have found it difficult to obtain new employment. In 2010, wage and hour lawsuits based on state law and the Fair Labor Standards Act (FLSA) were the fastest growing type of employment lawsuits. Of particular concern to employers, not only do these types of cases have class-action implications and can go back as far as 6 years in certain states such as New York, but in some circumstances a claim for unpaid wages can impose personal liability on an owner. Workers have information at their fingertips and are not afraid to use it. You need to protect yourself and your company as this growing trend is expected to continue into this year. Our experienced FLSA Wage & Hour Defense Attorneys at Villanueva & Sanchala can help you safeguard your company against these types of lawsuits and ensure that your organization is in compliance. Defending these lawsuits will not only cost your company money in legal fees but will also take away your time and resources in running your company. It is important to make sure your pay practices are compliant with federal and state labor laws before a claim is brought so that you are in the best position to defend your practices.

First, it is crucial to comply with the record keeping requirements under the federal and state employment statutes. Specifically, covered employers are required to maintain accurate timekeeping and payroll records and if they do not do so, they may be subject to certain fines and penalties. Your best defense against a wage and hour lawsuit is data and accurate records which can help disprove an employee’s self-serving allegations. Our Wage and Hour Attorneys can confirm whether your current time, record keeping, and payroll systems are legally compliant and provide a strong defense against wage and hour lawsuits. There are simple practices that many companies fail to do which can prove to be fatal in a potential defense. It is a good practice to have your covered employees clock in and clock out everyday using a time clock and initial each time card entry. In addition, it is a good practice to have a supervisor or manager review the time card with the employees on a weekly basis and have them both approve it. Depending on your workforce and organization, there are many other practices that could protect your organization and save you money. Call our office at (800) 893-9645 to learn how our employment lawyers can help implement best practices for your organization.

Second, it is important to make sure you classified your employees properly as exempt or non-exempt under the FLSA. Classification of employees is not a simple determination as many of the overtime statutes are arcane and some date back to the 1940’s. It is always helpful to seek input from an experienced labor and employment lawyer. Improper classification of your employees can lead to lawsuits resulting in huge payouts from your company. For example, you cannot automatically classify an employee who is performing high level, managerial work as non-exempt in order to pay them a fixed salary and avoid overtime pay. In other words, you cannot classify an employee managing one employee and making hiring and firing decisions as a professional exempt employee. Similarly, you cannot classify an administrative secretarial worker as a salaried executive non-exempt employee. You should periodically examine and review your employee’s job duties and responsibilities to ensure that they are properly classified and ideally before a claim is brought. Our attorneys at Villanueva and Sanchala can help you make sure that you are classifying your employees in accordance with state law and the FLSA.

If your company is facing a wage and hour lawsuit or complaint or you just want to implement best practices to safeguard against and prevent possible wage and hour lawsuits, call our experienced Wage & Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 for a confidential consultation to help you discuss your options.

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.