Top Five: Significant wage and hour trends

This past year was a record breaking year for wage and hour cases, with more suits filed and more damages on the line than ever before. Let’s look at what this means for 2016 wage an hour litigation.

1. More litigation. Dinsmore and Shohl point out that in 2015, there was in increase in the number of federal and state minimum wage and overtime violation prosecutions, and also an ongoing battle about the classification of independent contractors. There has been a whopping 10% increase in wage and hour litigation each year over the past few years. This trend is expected to continue into 2016.
2. Overtime overhaul. One of the most significant wage and hour events of 2015 that will heavily impact this new year was the proposed Department of Labor (DOL) overhaul of regulations related to the FLSA overtime exemption for white collar employees. The proposed change of doubling the salary basis test for overtime exemption would make over 5 million employees who are currently exempt from overtime pay would be affected. The final ruling on this matter is expected in 2016 and will undoubtedly have far reaching impact on wage and hour litigation. When new standards are finalized, economic experts, such as Dwight Steward, Ph.D., will perform a similar methodology to perform economic and statistical analyses in wage and hour cases, but have new guidelines for determining which employees have non-exempt status and are relevant in such a case.
3. Lower settlements. NERA reported that wage and hour settlement payments have been decreasing, on average, over the past decade. “On average, companies paid $5.3 million to resolve a case in 2014, lower than the observed average of $6.3 million in 2013 and the overall average of $6.9 million for the 2007 to 2015 period.” Could this be due in part to a broader spectrum of employers being litigated as the number of cases increase each year? Or perhaps a portion of the increased litigation are claims with lower damages.
4. Overtime allegations rule. Overtime allegations dominated wage and hour litigation in 2014 and 2015. And while the total wage and hour violations and minimum wage violations and minimum wage violation allegations increased, the share of misclassification and off-the-clock allegations were down over the past couple years. We are likely to see a continued increase in overtime allegations in 2016.
5. Minimum wage on the agenda. With individual states debating and increasing minimum wages, wage and hour minimum wage violation allegations are sure to be impacted. The minimum wage increase in California, for example, is said will have a “domino effect on various California wage and hour issues.” This may include non-exempt employee pay, meal and rest break pay, exemptions, and a variety of types of employees such as creatives, unionized employees and commissioned salespersons.