With the burgeoning debt economy and the balance to maintain the purchasing power of the residents, the federal court introduced the Fair Labor Standards Act to ensure a minimum wage for all working employees.
However, even with the law in motion, there seems to be piling cases of workplace class actions against employers suggesting that businesses are not taking the law seriously.
Let’s look at FLSA, or the Fair Labor Standards Act, a law made to protect the working class of this country.
Fair Labor Standards Act (FLSA)
The FLSA is a law set to protect the employees of private, federal, state, or government institutions against the malpractices of an employer.
This law ensures the following for all employees under the mentioned institutions:
- Minimum wage
- Overtime pay
- Record keeping
- Employee standards.
According to FLSA and wage/hour laws, employers must pay employees a minimum wage for working 40 hours a week. For any hour above the standard 40 hours a week, the employer must pay overtime, which is one and a half times their wage.
The FLSA is for all types of employees, full-time or part-time, regardless of their immigration status. However, it does not cover independent contractors.
What Is a Class Actions Lawsuit?
Class action lawsuits are different from individual lawsuits, as a person or the class representative collectively represents a group of individuals against a party. You may have heard of class action lawsuits by a trade union at a workplace against their employer for not complying with the minimum wage law.
Increase in Wage and Hour Litigation
In the early 2000s, the US saw around 2,000 wage and hour cases annually. This is already a concerning figure, as there were 2,000 cases where employers refused to follow the FLSA and pay their employees what they deserve.
The number of cases saw a massive increase after 2012, when the wage and hour cases were above 7,500 annually, with some years seeing more than 8,700 cases. This is around a 450% increase since the early 2000s.
Federal Minimum Wage and State Minimum Wage
In the FLSA, the minimum federal wage is $7.25 per hour. However, this is the federal minimum wage, and state law may vary. In California, the minimum state wage per hour for businesses with more than 26 employees is $12.00, and the California Labor Code requires employers to increase the minimum wage annually.
An employee can take a class-action lawsuit against the employer if the employer does not comply with the local laws regarding minimum wage. But what are the employers doing that they have to face class-action lawsuits from the employees?
Know When the Employer Is Carrying out Illegal Activities
There are many ways an employer will try to avoid paying minimum wage or any benefits to the employee, and this constitutes wage theft. Here are some ways employers commit wage theft to maximize their business profits.
Illegal Deductions
Many employers are guilty of imposing penalties on employees for violations. They make deductions from an employee’s wages for any violations done by the employee. However, there are cases where an employer misuses these rules by making illegal deductions even when there are no violations. In most cases, employees do not take action because they are afraid of losing their job.
If you’re facing wage theft from an employer, you must approach a wage and hour claims attorney to look into your case and get the compensation you deserve.
Employee Misclassification
As mentioned, the FLSA does not cover independent contractors, which allows employers to avoid taxes and benefits or compensation if they misclassify their full-time employees as independent contractors.
These workers do not have a minimum wage and can not file for class-action lawsuits against their business executives if they refuse to pay overtime. However, independent contractors can file a class-action lawsuit if the employer is breaching their contract.
Refusal to Pay Overtime
Under the FLSA, employers must pay employees for additional hours worked above 40 hours a week. However, no overtime pay is applicable if the employee is exempt or an independent contractor.
Refusing to pay overtime wages to relevant employees is against labor laws, and a class action brought against the employer can result in expensive settlements depending on the liquidated damages.
File Lawsuits for State Law Violations
The FLSA is a federal law that protects employees’ rights. However, there are state laws that further strengthen the rights of an employee. Employees can file for more liquidated damages under state laws than FLSA as there is broader coverage and more time to file claims.
Let’s look at an example. Under the California Labor Code, employers must follow the rules relating to what employers can write on pay stubs, and failure to do so will result in hefty fines.
Human Resources and Their Role
Often, an employer is unaware of the practices happening in their organization, which can lead to FLSA and state law violations. However, it is their responsibility to ensure that the human resources department plays its role well and ensures proper practices are in place to avoid employee exploitation.
HR can help reduce collective action against the employer by:
- Properly maintaining employee attendance and logging in hours for accurate overtime pay calculation
- Conducting training for all managers to help them distinguish between an exempt or non-exempt employee
- Ensuring random sample audit for employees to identify any harmful practices before any lawsuit happens
Strong HR policies and practices can help employers avoid litigations, and ensuring a high level of communication can reduce internal disputes.
If you’re having disputes with your employer and are not getting what you deserve, contact Ehline Law today, and we will help protect your rights. California sees a lot of wage lawsuits against employers in the booming food industry, and it is essential to have proper legal representation with our Los Angeles class-action lawyers.
Our lawyers maintain a professional attorney-client relationship resulting in more than $150 million in compensation for our clients. Our award-winning lawyers can give you the legal representation you need to get the compensation you deserve.
Contact us at (213) 596-9642 and get a free consultation today!
