"Overtime Offensive : Companies need to take a proactive approach to avoid the wage and hour lawsuit trap," an article in the June issue of Inside Counsel, focuses on wage and hour compliance noting "Faced with reports of multi-million dollar overtime pay settlements, employers around the country are scrambling to put their payroll policies in order. And with good reason. Confusion over arcane regulations, economic incentives for non-compliance and complacency rooted in years of non-enforcement have combined to create widespread violations of wage and hour laws. The Department of Labor (DOL) estimates that 70 percent of employers are not in compliance with the federal Fair Labor Standards Act (FLSA), a number that would grow substantially if violations of state laws were factored in. With the number of class actions for wage and hour violations now exceeding all other types of employment class actions combined, employment lawyers are urging their clients to conduct audits and review payroll policies. Employment attorneys urge a proactive approach - instituting new policies and training programs. Such steps may fend off an FLSA claim, or at least mitigate liability for an expanded statute of limitations and liquidated (double) damages that can be imposed on “willful” violators. The first step is a thorough audit of payroll practices and exempt versus non-exempt job classifications. The audit should answer the following questions: Do I know who is exempt?; is time recorded accurately?; and am I preserving time and payroll records so I can produce them if there is litigation? Gerald Maatman Jr., co-chair of the class action practice at Seyfarth Shaw, recommends listing jobs in the company from lowest paid up and drawing a line where exempt and non-exempt positions meet. “Look at the jobs that are 10 percent above the line and 10 percent below,” he says. “Re-examine their job descriptions to make sure you are in compliance and recalibrate the job requirements so they are either clearly exempt or clearly non-exempt.” Those job descriptions should be reviewed periodically to see if there have been changes impacting exempt status, such as layoffs that leave a supervisor without subordinates."
