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Wage Suits Hit Record High Amid Focus On Worker Rights

Law360—Aaron Vehling

The number of new wage-and-hour suits in federal courts hit an all-time high last year, up about 8 percent over the previous year, a rise attorneys say stems from overtime and minimum wage policy debates around the country increasing worker awareness and the difficulty of applying New Deal-era employment law to the modern workplace.

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Across the U.S., there have been movements in 2015, some successful, toward increasing the minimum wage at local and state levels, such as Seattle’s hike to $15 per hour and the September order from New York Gov. Andrew Cuomo's administration increasing the minimum wage for fast-food workers to $15 per hour, which are both designed to achieve that dollar value on a progressive, multiyear scale.

In his State of the Union address in February, President Barack Obama called for an increase in the federal minimum wage to $10.10, and presidential candidates in both the Democratic and Republican parties have spoken a lot about the issue.

The U.S. Department of Labor in June proposed a rule overhauling the overtime exemptions to increase the salary threshold — and therefore expand the eligibility for overtime pay for certain employees while also potentially adopting a new duties test for eligibility.

There are also policy and legal debates over who is an employee and who is an independent contractor in a variety of fields, especially in so-called new economy work in which the employer relies on a Web-based or app-based platform like ride service Uber, which is at the center of class action litigation over the classification issue.

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Employers might not necessarily be doing more to attract lawsuits, such as erroneously classifying certain workers as independent contractors or as exempted from overtime compensation, it’s just that workers are now more enlightened about what’s going on in their workplaces, according to plaintiffs attorney Michael Litrownik of Outten & Golden.

“Workers are more willing to challenge employment practices they see as wrong or illegal or unfair,” he said. “They’re reaching out more to plaintiffs attorneys and are more interested in challenging those practices either individually or as part of a class or collective.”

Another reason for the rise is that the workplace every year is beginning to resemble less and less the factory floor that predominated in 1938, when the FLSA became law, according to Alfred.

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The issue of whether a worker is an independent contractor or an employee — which has gotten a lot of airtime by way of DOL wage-and-hour administrator David Weil’s announcement that most workers are employees under the FLSA — pops up extensively in the context of the changing workplace.

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Going forward, attorneys don’t expect that northward trend-line to change trajectory in fiscal-year 2016 or beyond. For one thing, wage-and-hour issues will continue to be discussed by presidential candidates through the general election, and there’s also the matter of the DOL’s proposed overtime regulations, which are expected to be finalized in the summer of 2016.

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