Protect your organization from wage, hour lawsuits

January 2003
Volume 20, Issue 1
Legal Beat

Wage and hour lawsuits are on the rise across the United States. The majority of the suits are brought against organizations by employees who have been paid as salary workers. They realize, usually after leaving the company, that they were seen as exempt from overtime pay.

Spurring this activity are the many attorneys who recognize the benefits of using the Fair Labor Standards Act to win lawsuits, according to Paul Lopez, an attorney and a director of the law firm Tripp Scott.

“The statute's original intent was to ensure that blue-collar employees received fairwages and compensation for overtime, thereby preventing employers from taking advantage of workers,' he says. “But the sudden rash of lawsuits are spurred by attorneys who are using the statute to win cases.”

Lopez says the only way an organization can prove they have paid employees correctly is to maintain accurate records — not only in the hours people are working, but in their titles as compared to their actual job tasks. Managers are generally exempt from overtime wages, but giving a worker a managerial or supervisory title is not enough.

“The threshold must be clearly defined and proven,” Lopez says. “The law states that more than 50 percent of a manager's time must be dedicated to specific managerial functions. Nor is it good enough to assign the correct tasks. Employers must be certain that the worker is doing them.”