The Most Common (and Costly) Types of Wage and Hour Lawsuits

Sadly, many employees aren’t earning their fair share under the law. The Fair Labor Standards Act (FLSA) is a federal law that requires private and government employers to provide minimum wage and overtime pay to full- and part-time workers. Temporary staffing agencies must stay well aware of these lawsuits. 

Overtime Exemptions

The FLSA requires eligible workers to receive one and half-times their regular hourly rate for all hours worked over 40 hours during each work week.

Employees who earn less than $23,600 per year, or $455 per week, are generally entitled to overtime pay. Those who make less than this amount and aren’t receiving one-and-a-half-times your regular pay for every hour worked past 40 per week may sue. 

Employee Mis-classification

While some employees are exempt—or not eligible for—overtime pay under the FLSA, many employers intentionally or mistakenly mis-classify employees as exempt from overtime. According to the U.S. Department of Labor, an employer must be able to prove an employee’s exemption is legal if it is challenged.

The three typical categories are classified as “executive,” “professional,” and “administrative” roles. For employees to qualify as exempt under one of these classifications, the law states that they must perform a specific set of job duties.

Executive Exemption

An employee must regularly supervise two or more employees, manage employees as the primary duty of the position, and have input on other employees (hiring, firing, promotions, assignments etc.)

Professional Exemption

Often requiring advanced degrees or training, professional job roles exempt from overtime pay may include doctors, lawyers, teachers, and clergy. Certain creative professionals, such as actors and musicians, may also be excluded from receiving overtime under the FLSA.

Administrative Exemption

This includes job roles that require office work involving decision-making necessary to a company’s operations. Clerical workers, such as clerks, bookkeepers, and secretaries are not included in the administrative exemption.

Gig Workers

Another major issue is the mis-classification of workers as independent contractors or interns. Gig workers and other independent contractors generally have more autonomy than employees regarding when, where and how much they work. If properly classified, gig workers aren’t entitled to certain employment benefits like FLSA minimum wages and overtime pay. Thus, if employees are mis-classified as independent contractors, they may be entitled to such benefits.

Working Off the Clock

Workers are entitled compensation for:

  • Necessary, required tasks before or after work, such as changing into safety gear or arranging products before a store opens.
  • Required training 
  • Necessary travel time 
  • Waiting or “on-call” time during the workday

Working for Tips

Federal law allows employers to pay regularly tipped employees less than the federal hourly minimum wage if their hourly wage and tips meet or exceed minimum wage. If tips and wages combine to less than minimum wage, employers must make up the difference.

Even when a worker’s tips alone total more than the hourly minimum per hour during a pay period, they’re entitled to the federal required cash wage. Some states entitle tipped workers to higher minimum pay than required by federal law, and in those cases, employers must follow  state rather than federal law. Temporary staffing agencies should be careful in placement and very clear on both ends of communication. 

About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.