In 2016 10 overtime-related lawsuits alone amounted to $403,950,000.
The sky-high numbers should come as no surprise to business owners, who find themselves in the crosshairs of a Department of Labor (DOL) crackdown on FLSA violations–especially when it comes to overtime. U.S. Secretary of Labor Thomas Perez said in a recent interview, “To address the scale of this problem, we will redouble our enforcement efforts and partnerships to ensure workers take home the wages they earned and deserve.”
Since 2004, federal FLSA cases have more than doubled from 3,426 cases to 8,066 cases. Overtime cases comprise 80% of FLSA lawsuits. These lawsuits are simpler to prosecute and more lucrative than discrimination cases. Payouts of back wages, penalties and attorney fees, while not always as high as the numbers below, can quickly climb. Since the beginning of 2009, the DOL Wage and Hour Division has aided 1.5 million workers, with $1.3 billion in back wages. But the cost associated to defend a suit, plus payout of back wages can bankrupt a business, especially when a class action involving multiple employees is certified.
2016 Top Ten FLSA settlements:
|FedEx||$240 Million||Unpaid overtime|
|Walmart & Sam's Club||$62.2 Million||Off-the-clock work, missed meal and rest breaks, and unpaid overtime.|
|Los Angeles Children’s Hospital||$27 Million||Wages shorted, denied breaks, unpaid overtime|
|Bank of America||$14 Million||Unpaid overtime|
|Excel Direct||$13.5 Million||Denial of breaks, unpaid overtime, minimum wage violations|
|BMO Nesbit Burns||$12 Million||Unpaid overtime|
|Alorica Call Center||$9.25 Million||Underpaying employees & unpaid overtime|
|Oil and Gas Pipeline Inspections||$9.2 Million||Unpaid overtime, payment of flat daily rate regardless of hours worked, no records of employee hours|
|GNC||$9 Million||Work without pay, incomplete records of employee hours and pay|
|Avis Budget Car Rental||$7.8 Million||Unpaid overtime|
How Automating Time Keeping Can Help
Wage and Hour claims can be avoided by ensuring compliance and not attempting to cut any corners. Implementing OnePoint time and labor or all-in-one HCM solution provides employers with a single database for complete workforce management automation.
By accurately tracking employee time and seamlessly sharing data with HR and Payroll, business have one single system for employee data. Implementing an HCM solution can save hundreds of hours of administrative time, reduce errors and oversights, and provide a single source of historical data to defend against wage and hour claims if they arise. Many businesses see an immediate ROI in time and labor cost savings by investing in HCM technology with the added peace of mind that the chance of a crippling lawsuit like the ones above can be avoided.