A record number of lawsuits were filed in 2015 alleging workplace violations of the federal Fair Labor Standards Act, which addresses minimum wage, overtime pay and other labor classifications.
Attorneys for employers call the surge an onslaught of challenges. Attorneys for employee plaintiffs say it reflects greater awareness of pay inequities and misclassification of workers.
According to the Federal Judicial Center, 8,781 cases charging FLSA violations were filed in fiscal 2015, an 8 percent jump from 2014. Lawyers forecast an even higher number for fiscal 2016.
“New federal labor regulations, the fight for minimum wage hikes, and an intense focus on independent contractor classification and joint employer status create a perfect storm for new lawsuits,” said Richard Alfred, chairman of the Seyfarth Shaw law firm’s wage and hour litigation practice.
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Alfred referred to ongoing confusion, if not outright disagreement, about whether certain workers are self-employed (or independent contractors) who manage their own work schedules or whether they are employees whose work is more directly controlled by employers. Cases involving the Uber ride-hailing service have gained particular attention in that arena.
He also referred to U.S. Department of Labor guidance, issued in July this year, that addressed joint employer status. The topic gained public prominence this year in wage campaigns by workers against the fast food industry in general and McDonald’s in particular. The issue was whether workers are solely employed by the franchised restaurant owners or whether the bigger company is a co-employer.
Next year, a hot topic for FLSA litigation is likely to be disagreement about whether workers are correctly classified as hourly employees covered by overtime pay law or as exempt (or salaried) workers who aren’t owed overtime when they work more than 40 hours a week. New federal regulations are expected to be issued in 2016, the first revisions since 2004.
The new regulations will focus on raising the minimum salary level necessary to categorize a worker as overtime exempt and address the nature of duties that would be required to classify a worker as exempt.
Changing that salary test is a priority of the White House and the Labor Department. When the department announced the proposed rule changes earlier this year, it said on its website:
“Failure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly compensated executive, administrative and professional employees now applying to workers earning as little as $23,660 a year. For example, a convenience store manager, fast food assistant manager or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.”