Wage and Hour Trends: Last year’s top 5 settlements

In an attention grabbing headline, The Huffington Post declared that “Wage-and-hour lawsuits jumped 432 Percent in the last 20 years“, citing a Seyfarth Shaw analysis of data from the Federal Judicial Center.

Let’s take a look back at top three largest wage and hour settlements of 2013.

#3 |  Roto-Rooter Services paid $14.3 million for alleged misclassification of service technicians and failing to pay commissioned employees minimum wages and overtime premiums, which are required under state and federal law. Further, employees claimed they were subject to unlawful wage deductions and kickbacks. The class was divided into two groups who signed different arbitration agreements, one of which a judge agreed could bring their claims in federal court. The other group were instructed to proceed in arbitration.

#2 |  24 Hour Fitness provided a $17.5 million settlement to almost 900 employees for alleged off-the-clock work of trainers and manager misclassifications. The net amount for plaintiffs was more than triple the defendant’s maximum estimate of damages. In 2006, 24 Hour Fitness paid a whopping $38 million settlement to close to 50,000 workers employed in their California locations.

#1 |  Puerto Rico Department of Correction and Rehabilitation (DCR) settled with 4,500 employees for the year’s highest figure of the year – $35 million. The settlement compensated employees for back wages and interest related to violations involving employees working more than 40 hour workweeks, and having comp time ‘banks’ to exceed the limit. The damages period spanned more than a decade. In addition to the settlement, DCR agreed to designate an HR liaison, create a system to track payroll errors and disputes, install on-site timekeeping systems at its facilities, and hire additional staff.