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Posts Tagged ‘independent contractors’

Five Things an Employer Can Do Before a Wage and Hour Claim is Made

Posted by Eric Parzianello on February 4, 2014

Employers both large and small continue to be affected by Wage and Hour claims.  In one recently reported case, a Domino’s Pizza franchisee agreed to pay $1.28 million to 61 pizza delivery workers based on claims of unpaid work.  In a case in which we’re involved, a collective action was filed in federal court on behalf of workers employed by a company but allegedly misclassified as independent contractors.  In another case, the Department of Labor’s Wage and Hour Division received a complaint from a worker and sent the letter no employer wants to receive:

Dear Owner/Manager:
The Wage and Hour Division (WHD) of the U.S. Department of Labor is responsible for administering and enforcing a number of federal labor laws, including The Fair Labor Standards Act (FLSA). This letter is to inform you of the agency’s plans to visit your establishment on February 6, 2014, at 10:00 a.m. to determine your compliance with the FLSA. 

The Department of Labor’s WHD website makes it very easy for any employee to make a claim. The WHD touts that “there are no charges to file a complaint or for the WHD to conduct an investigation” and that it will enforce wage laws “without regard to an employee’s immigration status.”  Damages in a wage and hour case may include attorney fees as well as double the amount of unpaid or under-paid wages.  Not surprisingly, National Economic Research Associates reports that on average, companies paid approximately $4.5 million to resolve cases involving wage and hour violations in 2013.

What can an employer do before a claim is made or an audit is demanded by the Wage and Hour Division?

  1. Conduct periodic internal audits with labor counsel to ensure compliance with applicable laws
  2. Ensure that employees who are classified as salaried workers and thus exempt from overtime pay are properly classified
  3. Review written job descriptions to ensure that duties of exempt employees reflect their actual job duties
  4. Determine that any workers classified as independent contractors are properly classified and are not actually employees
  5. Ensure that time record keeping procedures accurately reflect the work done

These procedures can help minimize the risk of an audit or a claim by an employee for unpaid wages or overtime.

Posted in General Employment Law, Wage and Hour Law | Tagged: , , | Leave a Comment »