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AMERICAN ASSOCIATION OF DISTRIBUTORS
2011 - THE YEAR OF THE WAGE AND HOUR CLASS ACTION

2011 - The Year of the Wage and Hour Class Action

Employment discrimination class action settlements increased four times in 2010 according the Chicago law firm

Seyarth Shaw's Workplace Class Action Litigation Report.

In addition, the top 10 settlements for ERISA, wage and hour and governmental enforcement class actions increased

to $1.16 billion, which is the largest amount in history. The co-chair of the law firm's class action defense group,

Gerald L. Maatman, Jr., predicts that 2011 will bring even more and bigger class actions.

The United States Supreme Court is expected to rule on three important cases in 2011 that could have profound effects

on employers. The high Court will hear oral arguments in Dukes v. Wal-Mart in March 2011. The case is a Title VII

gender discrimination case with more than 1.5 million class members, the largest in history. Rule 23 of the

Federal Rules of Civil Procedure governs the standards and parameters for constituting a class and its claims. Among other

issues, the Court is asked to decide the extent of commonality necessary among plaintiffs' grievances for class certification

under Rule 23.

Smith v. Bayer is scheduled for oral argument in January 2011. In Smith, the Court will determine how far one court's

rejection of class certification can go to decide another court's capacity to certify a class on the same issues.

The outcome of AT&T Mobility v. Conception, argued in November 2010, could impact workplace arbitration agreements.

The issue in that case is whether service agreements can do away with a consumer's right to bring class arbitrations.

Maatman believes that wage and hour cases are the number one exposure for most companies. "2011 to Be Key Year in

Employment Liability," www.mynewmarkets.com (Jan. 10, 2011).

Commentary and Checklist

Obviously, not all employers are at risk for a wage and hour class action, especially small and medium size employers.

Even so, individual employees are also seeking redress on their own for wage and hour violations.

To make matters worse, most lawyers would agree that wage and hour violations are easier to prove than discrimination

or retaliation claims. Wage and hour issues are simple for juries or judges to understand (did employees receive overtime,

did employees receive their break, e.g.). Accounting records provide concrete evidence and rarely mislead investigators.

To avoid wage and hour class actions, employers need to consider proactive loss prevention. Employers should embrace

and encourage the right of employees to report wage and hour grievances. When employers provide a grievance reporting

procedure and then investigate and address those grievances, they may avoid charges filed with the Department of Labor.

In addition, employers may avoid accusations that their acts or omissions were intentional by keeping thorough records.

In the event of wage and hour claims, the employer should be able to show everything that was done to prevent the

violations from accurate record keeping to encouraging and addressing employee complaints.

Employers must take time to audit their wage and hour practices. Here are some important considerations:

·         Are your exempt employees properly classified? Too many employers classify employees as exempt when

         they are really non-exempt.

·         Are your non-exempt employees receiving their overtime? All overtime, no matter how short, must be

        accounted for and compensated.

·         Are your non-exempt employees receiving proper credit for all their time spent working on your behalf?

        Employers that hedge employee time, especially when an employee is on an employer's premise, take a great

        risk.

·         Are your non-exempt employees receiving their breaks and other compensated time as required by federal

        and state laws? Laws differ, but many state laws require mandatory paid breaks during the day.

·         Are your employees receiving all the wages due to them? Class actions are emerging where employers

        unlawfully deducted money from employee checks.

·         Have you had an employment attorney review your wage and hour practices? If not, now is the time.

Related Links

Wage and Hour Divisionhttp://www.dol.gov/whd/


This informational piece is part of "The Loss Prevention Journal" published on January

January 24, 2011

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