Reasons for the Surge in Overtime Lawsuits

Reasons for the Surge in Overtime Lawsuits

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Understanding your rights and the laws defined by the Department of Labor is essential. Unless they are exempt from the regulations on overtime pay, employees are required to be paid for working more than 40 hours in a work week at time and a half of their normal pay rate.

Each year, the lawsuits that are filed under the federal Fair Labor Standards Act (FLSA) have increased. In fact, according to data from the Federal Judicial Center, there has been a 100% increase in the number of lawsuits filed compared to 10 years ago. There are several reasons for this surge:

  1.  Technical Terminology – The terms that are used in the FLSA laws can be quite ambiguous and often confuse both employers and employees. Since most people don’t fully understand these regulations, many oversights occur; they are often only sorted out in court, where even judges can interpret the law differently.

  2.  State laws –The laws regarding overtime pay vary from state to state, so it’s important that employers and employees are fully cognizant of what their particular state requires. Certain states such as California have state laws that are significantly more protective of employees than federal law. If a worker’s job involves working out of state, the company should be doubly careful to insure compliance with the wage laws of the state in which the work is done.

3.  Public awareness – Due to the increase in overtime pay lawsuits and the numerous multi-million dollar settlements that have been made, more and more people are becoming aware that they can sue for wage violations and recover substantial amounts of money. Through word of mouth alone, people are beginning to take it upon themselves to learn the law and figure out if they are being properly paid.

4.  General discontent – In a general sense, many employees feel overworked and underpaid for their efforts and are becoming more assertive in the fight for their rights. Workers do not want to be taken advantage of and are able to find lawyers who specialize in wage and hour claims and are willing to take their cases on a contingent fee basis.

More recently, President Obama signed an order to revise the laws regarding overtime. These Labor Department reforms raise the income threshold of workers who are required to receive overtime under the FLSA. Although it may be some time before the new overtime laws are adopted, the potential impact on some workers could be profound.

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