Wage and Hour Lawsuits Rose 7.6 Percent in 2015, Increase Expected in 2016

More wage and hour lawsuits are expected in 2016 Photo by Thinkstock
<p>More wage and hour lawsuits are expected in 2016. (Photo by Thinkstock.)</p>

(Editor's Note: Club Industry is putting on a webinar about what you need to do to prevent wage and hour lawsuits. Register for the webinar, scheduled for 2 p.m. Eastern on April 14, 2016.)

The number of federal wage and hour lawsuits rose in fiscal year 2015 to an all-time high of 8,781 cases, a 7.6 percent increase from fiscal year 2014, according to federal data shared by Seyfarth Shaw LLP law firm on its wage and hour litigation blog last week. 

The data was not broken down by industry, so no statistics were available related specifically to the health and wellness industry. However, some of the fitness industry's larger players are facing or have faced wage and hour suits recently, including Life Time Fitness and Equinox

The blog authors, Seyfarth Shaw Partner Richard Alfred and Associate Kevin Young, attributed the growth to several factors. They wrote that the Department of Labor recently has focused more on violations of the Fair Labor Standards Act (FLSA), including misclassification of independent contractors. The FLSA, which was enacted in 1938, establishes the federal minimum wage, overtime pay, recordkeeping and child labor standards for full-time and part-time workers.

The increase in lawsuits also may be a result of the Department of Labor's proposal to revise exemption regulations for white collar workers, including increasing the minimum salary level and possibly change the duties tests for white collar workers. The department's June 2015 proposal is expected to be issued in fall 2016.

In addition, a growing awareness by employees of the option to sue employers for violations may be contributing to the increase.

Alfred and Young said they expect more wage and hour lawsuits in 2016.

"In federal court, employers are more likely to face wage and hour claims than any other form of employment litigation," they wrote.

The number of wage and hour suits has risen 450 percent since 2000, according to the report.

"Now more than ever, employers are well advised to audit their exempt status classifications, independent contractor classifications, and pay practices with experienced wage and hour counsel to identify and mitigate legal risk," the two wrote in the blog.

Editor's Note: Federal fiscal year 2015 ran from Oct. 1, 2014, to Sept. 30, 2015.

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