Tuesday, December 1, 2015

Wage-and-hour issues continue to confound employers, with more looming

Two stories on Employment Law360 caught my attention: McDonald’s To Pay $1.5M To Settle Workers' Wage Suit and Wage Suits Hit Record High Amid Focus On Worker Rights.

First, McDonald’s Corp. agreed to pay $1.5 million to settle a lawsuit claiming that it had failed to compensate a class of employees for time associated with cleaning work uniforms.

On the heels of that story, Employment Law360 reported that new federal-court wage-and-hour suits hit an all-time high in 2015, up 8% from 2014 (8,781 versus 8,160).

What does this mean for employers?

It means that, through no fault of employers’ own, wage-and-hour issues continue to confound. And, these issues are not only not going away, but they will get worse. New overtime regulations will take effect by July 2016. These regulations will increase the salary threshold for various exemptions.

Rather than reinvent the wheel, I thought it best to republish my thoughts from 2013 on the issue of wage-and-hour ills:

Yes, we have a wage-and-hour problem in this country. Wage-and-hour non-compliance, however, is a sin of omission, not a sin of commission. Employer aren’t intentionally stealing; they just don’t know any better.
And who can blame them? The law that governs the payment of minimum wage and overtime in the country, the Fair Labor Standards Act, is 70 years old. It shows every bit of its age. Over time it’s been amended again and again, with regulation upon regulation piled on. What we are left with is an anachronistic maze of rules and regulations in which one would need a Ph.D. in FLSA (if such a thing existed) just to make sense of it all. Since most employers are experts in running their businesses, but not necessarily experts in the ins and outs of the intricacies of the Fair Labor Standards Act, they are fighting a compliance battle they cannot hope to win.
As a result, sometimes employees are underpaid. The solution, however, is not creating wage theft statutes that punish employers for unintentional wrongs they cannot hope to correct. Instead, legislators should focus their time and resources to finding a modern solution to a twisted, illogical, and outdated piece of legislation.
In my most recent book, The Employer Bill of Rights: A Manager’s Guide to Workplace Law, I summarized this issue best:
“Congress enacted the FLSA during the great depression to combat the sweatshops that had taken over our manufacturing sector. In the 70 plus years that have passed, it has evolved via a complex web of regulations and interpretations into an anachronistic maze of rules with which even the best-intentioned employer cannot hope to comply. I would bet any employer in this country a free wage-and-hour audit that i could find an FLSA violation in its pay practices. A regulatory scheme that is impossible to meet does not make sense to keep alive….

“I am all in favor of employees receiving a full day’s pay for a full day’s work. What employers and employees need, though, is a streamlined and modernized system to ensure that workers are paid a fair wage.”