Wage and Hour Violations in the New Economy: A Tricky Business for Employers and Employees Alike

Over 7,000 wage and hour lawsuits were filed in 2001 – an uptick of nearly 400% since the start of the millennium. What’s happening? Why are so many employers being accused of violating the government’s Fair Labor Standards Act, and what might this trend portend, not only for employers and managers, but also for the health of the overall U.S. economy?

First, let’s take a look at some statistics. According to public record, a large number of big businesses have recently found themselves at court, fighting wage and hour charges. These include some of the biggest businesses on the planet, such as: Walmart, Bristol-Myers Squibb, Johnson & Johnson, GlaxoSmithKline, Dick’s Sporting Goods, Staples, Novartis.

The Department of Labor isn’t playing games, either. In fiscal year 2011, for instance, the Department of Labor collected $225 million in back wages for workers – up nearly $50 million from 2010. The DoL also added several hundred investigators specifically to the wage and hour detail.

Why Is This All Happening?

Several factors might be at play.

1. First of all, the economy remains in relatively “ho-hum” shape.

Yes, things have picked up and stabilized since the fiscal crisis of 2008. But many economic indicators are, at best, anemic.

2. Secondly, employers have been using lean business methods to outsource or even outright eliminate certain positions.

Whereas several years ago, a manager might be able to count on an assistant manager to help with clerical tasks; today, that manager may be tasked with both his job and the job an assistant would normally have. As a result, managers often find themselves working “double duty” – working later than they would have been working, et cetera. These workers may not be getting fair compensating, according to FLSA rules.

3. There is another key element. Employers may actually be confused about how to apply the law properly.

For instance, in a series of recent cases involving pharmaceutical sales representatives’ wage and hour claims, different courts have come to different conclusions about overtime pay requirements. The Second Circuit court found in favor of drug makers — i.e. agreed that sales reps were exempt from FLSA rules. But Third and Ninth Circuit courts found for the sales reps. So these drug makers are trying to make decisions in a fluid legal environment – trying to balance the need to minimize expenditures with the need to comply with wage and hour law.

It can get to be a pretty mixed up business.

If you’re caught in the middle of this chaos – as an employee who suspects that you’ve been unfairly docked pay or inadequately compensated for your overtime – you may benefit from talking to the team here at Joseph & Kirschenbaum. Our team represents the pharmaceutical sales reps in their landmark battle for fair overtime pay. We can help you and give you resources to put you back in control.

Learn more at www.jhllp.com, or call us at (212) 688-5640.