The Fair Labor Standards Act (FLSA), the federal law governing
the payment of minimum and overtime wages, turns 70 next year, and
notwithstanding all the cosmetic revisions and amendments it has
experienced at the hands of Congress, it is finally showing its
Courts are struggling with uniformly interpreting and applying
FLSA and the U.S. Department of Labor's (DOL) interpretive
regulations, particularly those governing overtime classification
of employees. The result has been divergent opinions and guidance.
This, in turn, has created confusion for employers as to the proper
method for paying employees, particularly smaller companies that
feel they do not have the resources to properly assess FLSA's
practices and policies.
In the meantime, plaintiffs' attorneys continue to discover that
FLSA collective actions represent low risk and lucrative
undertakings because of a statutory provision requiring employers
to pay for plaintiffs' attorneys' fees and costs incurred by
plaintiffs to recover back wages. This makes these types of suits
expensive, time-consuming and invasive for employers.
But there is some good news. You can take precautions to
decrease the likelihood of FLSA lawsuits or, at least, minimize
potential liability. The best precaution is to conduct an internal
wage and hour audit of wage payment practices and job
classifications for overtime purposes. The resources required to
conduct an audit will pale in comparison to the costs of
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