Pay-related Lawsuits have Exploded

Pay-related Lawsuits have Exploded

Pay-Related Lawsuits have risen 10% in the past year! Why Is This Happening?

One reason is that overtime and other unpaid-time lawsuits have become cottage industry for
lawyers, according to HR Specialist. In many cases, a single lawsuit can transform into a class action case on behalf of hundreds of employees.

HR Specialist states that the best way to avoid these claims is to follow these do’s and don’ts:

1. DO rethink “nonemployee” workers. If you use workers classified as independent contractors or interns, regularly review those classifications. When in doubt, consult an attorney.

2. DO review exempt vs. nonexempt status. Misclassifying employees are exempt from overtime pay is a common lawsuit trigger. Review duties to be sure they truly qualify. Analyze each job as to the essential duties and responsibilities for qualification.

3. DON’T permit off-the-clock work. If staff works beyond their scheduled hours, pay them. Then counsel them not to do that again. Require the employee to certify the accuracy of their time records.

4. DO ensure proper calculations of overtime rates. Time-and-a-half overtime must be calculated based on the employee’s “regular rate,” which can be tricky to tabulate when considering bonuses, commissions and incentives.

5. DON’T allow improper deductions from salaried employees. Deductions for certain absences, for example, can destroy a worker’s exempt status.

6. DO comply with record-keeping and posting obligations. Federal and state laws require posting of wage-and-hour notices.

If you are interested in an in-depth discussion on these topics or if you need assistance in the above-mentioned areas, please contact your HR On Demand Specialist at HR Advisors today at 877.344.8324, or via email at

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