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Defending Wage And Hour Claims: Proven Strategies For Employers

Per the Society for Human Resource Management, in 2019, the total value of the most high-profile class action lawsuits related to hours and wages totaled almost $500 million. This, coupled with the fact that the U.S. Department of Labor recovered millions in owed wages for employees in the same year, highlights how such claims can be costly for employers and why it can be beneficial to implement strategies to defend them. 

Explore ways to defend wage and hour claims and discover how a New York employer defense attorney from Schwab & Gasparini can help businesses with their legal issues by calling their Syracuse office at (315) 422-1333, their Albany office at (518) 591-4664, or their White Plains or Hudson Valley office at (914) 304-4353.

What Are Wage and Hour Claims?

Hour and wage claims occur when a former or existing employee initiates a lawsuit stating that their employer breached certain labor laws. Such claims specifically relate to an employee believing they have not received fair compensation in terms of pay rates and hours worked. State legislation and the Fair Labor Standards Act (FLSA) govern this area, covering subjects such as unfair pay, withheld overtime, unfair treatment, record-keeping, minor protection, and labor hours.

What Is Your Responsibility to Ensure That You Are Being Paid for All Hours Worked?

According to federal legislation, employers and employees have the following responsibilities to ensure payment for all worked hours:

• Per the FLSA, employers must pay their hourly workers for all worked hours, even if the employees completed work the employer did not request, such as work performed remotely.
• Employers with actual knowledge of performed work or a reasonable belief of its occurrence must count this time as worked hours.
• Employers must demonstrate reasonable diligence to identify whether their employees are completing unscheduled work to ensure fair pay. This is typically achieved by implementing a recording procedure for these hours without preventing accurate reporting.
• Employees should report any hours worked remotely or other unscheduled hours worked using the employer’s reporting system to ensure they receive their full pay.

How Do I Win a Wage Claim?

The following strategies can help employers defend against hour and wage claims.

Review Employee Status

An effective starting point involves checking each employee’s status according to the FLSA. Ultimately, the aim is to determine whether the employee has non-exempt or exempt status under both federal and state law. This often intertwines with identifying whether the individual is a contractor or an employee.

Maintain Thorough Records

Another effective approach for reducing possible claims entails maintaining thorough employee records. Ideally, these would include accurate timesheets, details of breaks taken, the total number of hours worked per employee, the vacation pay taken, and the amount of travel completed for work purposes.

In these records, be sure to use the correct term when referring to each worker. For instance, avoid using “employees” to refer to independent contractors. Learn more regarding effective strategies for defending wage and hour claims and explore the legal options available for companies facing this legal issue by contacting a seasoned New York employer defense lawyer from Schwab & Gasparini.

Check Both State and Federal Requirements

Certain states may have labor laws that provide more favorable conditions, including wage and overtime requirements, to employees than federal legislation. If this is the case, the employer must pay the employee according to these enhanced requirements. Because of this, employers can benefit from reviewing local and federal labor laws to reduce their chances of facing hour and wage claims.

Does EPLI Cover Wage and Hour Claims?

Employers usually have an employment practices liability insurance (EPLI) policy to protect them against several employee lawsuit types, such as discrimination, sexual harassment, and wrongful termination. However, hour and wage claims occur frequently and can be very expensive, meaning conventional EPLI may not cover such lawsuits. That said, insurers usually offer the option for companies to purchase additional coverage for paying the legal fees, potential settlements, and other costs related to these claims.

Can an Employer Reclaim Overpaid Wages?

State and federal legislation stipulates that employers can recover overpaid wages in full. However, specific states may have limits on what employers may recover. In New York, for instance, employers may only recover overpaid wages from a worker’s pay when this occurs because of a clerical or mathematical mistake.

After noticing the error, employers should start the recovery process as soon as possible, taking note of the time limits set in each state. To reclaim overpaid wages from current employees, follow these suggested steps:

• Identify the amount of overpaid wages.
• Contact the employee and make them aware of the situation.
• Share how the employer plans to recover the overpayment from the employee, discuss whether the employee requires a repayment plan, and agree on these terms.
• Provide proof of the overpayment and outline the wage adjustment terms in writing.

Why Do Employees Bring Hour and Wage Claims?

Employees file hour and wage claims for multiple reasons, such as the following:

• Unfair overtime payments: Employers cannot offer non-exempt workers additional time off for any extra hours they have worked. They also cannot rely on a company policy of not paying overtime to avoid making such payments, as this breaches the FLSA.
• Unpaid meetings and training: Non-exempt workers can expect payment for any training sessions, workshops, or work-related meetings they attend.
• Unpaid breaks or meals: While this usually varies by state, it is typically necessary for employers to pay employees for any rest breaks taken that are under 20 minutes long.
• Back payment issues: This relates to the difference between the money paid by the employer to the employee and what labor laws state the employer owed.

Contact a New York Employer Defense Attorney Today

Companies that acquire an excellent understanding of state and federal employment legislation and take steps to ensure compliance can typically improve their chances of avoiding hour and wage claims. Due to the complexity of these laws and their constantly developing nature, however, it can be challenging to prevent firms’ exposure to these lawsuits completely. 

Learn more about defending wage and hour claims and find out how a New York employer defense attorney from Schwab & Gasparini can assist employers facing these lawsuits by contacting their Albany office at (518) 591-4664, their Hudson Valley or White Plains office at (914) 304-4353, or their Syracuse office at (315) 422-1333.

Wed Nov 22 2023, 12:00am