HR Insights with Ali: Wage Claims Expected to Rise in Wake of New FLSA Regulations
Posted on 11/22/2016 by Ali Oromchian, Esq.
With the new overtime regulations under the Fair Labor Standards Act (FLSA) scheduled to take effect on December 1, 2016, employers are concerned about potential increases in wage disputes - and for good reason. Changes to minimum wage laws, sick leave policies, as well as confusion over which employees qualify as exempt vs. non-exempt can all lead to labor disputes.
Even prior to the new FLSA regulations taking effect, wage claims are on the rise. Employee lawsuit figures have been rising at a rate of around 10% per year. Employers have been looking for explanations for this increase in order to protect their practices. The consensus is that regulation changes can wreak havoc upon small businesses. For example, Richard Alfred, chair of law firm Seyfarth Shaw’s Wage & Hour Litigation practice, attributes the litigation increase to “[n]ew federal labor regulations, the fight for a minimum wage hikes and an intense focus on independent contractor classification and joint employer status,” all of which “create a perfect storm for new lawsuits.”
While no business is truly immune from employee disputes, you can greatly reduce your risk of wage claims by adequately familiarizing yourself with FLSA regulations, sick leave and minimum wage standards. Improper classification of employees under FLSA can lead to disputes, wage claims and penalties against your practice. Avoid the risk by ensuring that FLSA regulations are properly followed from day one.
For more information about what the FLSA regulations are and how to ensure you are following them, please see the blog post titled “The New FLSA Regulations What You Need to Know”.