10 Costly FLSA Mistakes: Why Companies Are Losing in Court

Executive Summary Courts are coming down hard on employers that violate the Fair Labor Standards Act (FLSA) – which is getting easier and easier to do.

In courtrooms across the U.S., judges are calling overtime cases in favor of non-exempt employees like an umpire with an oversized strike zone. The result: Workers from truck drivers to stockbrokers are winning big payouts. It’s estimated that upwards of 86% of the U.S. workforce is non-exempt from FLSA regs, especially the overtime regs. With that in mind, aggressive plaintiff lawyers are wreaking havoc by filing suit at the mere whiff of a violation. One such attorney recently told Bloomberg Businessweek: “I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that a single wage-and-hour suit will.” While the Fair Labor Standards Act has remained largely unchanged in recent years, the way the law is interpreted is always shifting – and too frequently that doesn’t bode well for employers. With that in mind, this report examines legal trends affecting how employers are viewing FLSA. It lays out 10 recent court decisions that have left many employers re-examining the way they set up compensation policies – and how they classify the workforce.

Download PDF