Employment Law Legal Topics

Wages May Not Be on the Rise, But Wage and Hour Suits Are

A recent study by the law firm Seyfarth Shaw discussed in The Blog of LegalTimes shows a steady increase in wage and hour suits brought under the Fair Labor Standards Act (FLSA) over the last few years. Seyfarth partner Richard Alfred explains the spike as due to the bad economy; those who lost jobs are looking at their legal options. And he doesn’t see an end to the increase any time soon. This presents an opportunity for those attorneys who are up to speed in this area. Here’s an overview of the FLSA to get you started.

“A fair day’s pay for a fair day’s work.” These were the words of President Franklin D. Roosevelt in urging enactment of the FLSA (29 USC §§201-219) nearly 75 years ago. The FLSA has been broadly construed to regulate wage and hour issues arising out of the employer-employee relationship.

The FLSA’s essential requirements are:

  • Payment of the minimum wage;
  • Overtime pay for more than 40 hours in a workweek;
  • Restrictions on child labor; and
  • Recordkeeping.

The FLSA doesn’t require severance pay, sick leave, vacations, or holidays. It also doesn’t address nonproduction cash bonuses (payments that are not production-based), such as educational assistance, life insurance, and travel accident insurance.

The FLSA requirements are in addition to, not instead of, California’s wage and hour laws. This means that employers have to comply with both sets of laws. When there’s a conflict between federal and state wage and hour laws, the law with the higher standard applies. 29 USC §218(a); 29 CFR §778.5. This often arises with California’s wage orders, which generally provide more extensive rights to California employees.

The big money maker in these cases is the class action (called a “collective action” under the FLSA). As quoted in The Blog of LegalTimes, Seyfarth partner Richard Alfred attributes the sharp uptick in cases to wage and hours class actions resulting in large settlements and attorney fee awards, which has led other plaintiffs lawyers to see that 

the wage and hour laws, because of the way they are written and the changes in the workplace, [are] relatively easy claims to bring against employers on a class basis.

There’s one potential roadblock to FLSA collective actions: Unlike a traditional class action, in which a member of the certified class is a party to the action unless he or she affirmatively “opts out” (see Fed R Civ P 23(c)(2)-(3)), under the FLSA, an employee must “opt in” to the class by filing a written consent with the court. Hoffmann-La Roche, Inc. v Sperling (1989) 493 US 165, 169, 107 L Ed 2d 480, 110 S Ct 482. But, because the FLSA doesn’t preempt state laws that provide for greater relief, a class action under the unfair competition law (Bus & P C §17200) may allow a plaintiff to convert an “opt-in” FLSA action into an “opt-out” class action. See Harris v Investor’s Bus. Daily, Inc. (2006) 138 CA4th 28, 38, 41 CR3d 108.

Mosts courts have held that FLSA collective actions need not comply with the certification requirements of Fed R Civ Proc 23. Kenney Shoe Corp. v Vorhes (9th Cir 1977) 564 F2d 859, 862.

Any attorney who’s practicing in the wage and hour area or who wants to get started in the area needs CEB’s California Wage and Hour: Law and Litigation. This award-winning book covers federal and state law and can be used as a handbook for counseling clients about compliance with complex wage and hour rules or as a primer for litigating a wage and hour case on either side of the case. Also check out CEB’s program Wage and Hour Damage Calculations — an Overview, available On Demand.

© The Regents of the University of California, 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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