Wage-and-hour class action suits down in 2016, but settlements tripled
- Employees filed fewer wage-and-hour class action suits last year — the first time in 15 years — but settlement assessments tripled during the previous two years, SHRM reports.
- The law firm Seyfarth Shaw released an annual report showing that settlements in wage-and-hour class action suits were up, even though other reports showed a 30% decrease, writes SHRM. The report tracks class action litigation over wage-and-hour laws, the Employee Retirement Income Security Act, discrimination and government enforcement.
- Gerald Maatman Jr., a Seyfarth Shaw attorney who wrote the report, told SHRM that the criteria for attaining class action status from the courts requires a low investment, while settlement costs can be $250,000 or more, especially for a discrimination claim. He predicts that the number of class action wage-and-hour lawsuits will rise to and beyond the 2016 level.
Class-action suits can cost employers millions of dollars. Uber is awaiting a court decision on its own settlement proposal that would amount to a $1 per claimant. Uber drivers sued the company over wages and for allegedly misclassifying them as independent contractors instead of employees.
While waiting for the outcomes of the Uber case and other legal actions, employers should fully comply with employment laws. Compliance won’t always prevent lawsuits, but it can reduce the risk. Employers should be thoroughly documenting each step of their compliance to maximize their efforts.
Another aspect of the trend in wage-and-hour suits is the influence of the Trump administration, which continues to push for a shift toward a pro-business stance on the part of the federal government. Policy changes like the overtime rule face a potential D.O.A. designation, a sign that worker protections advanced by the previous administration are in jeopardy.