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Litigation Services Handbook: The Role of the Financial Expert, 5th Edition by David P. Hoffman, Daniel G. Lentz, Roman L. Weil

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Chapter 33

Wage and Hour Litigation

Robert W. Crandall

33.1 Introduction

Employers in a wide variety of industries continue to see a dramatic increase in the number of class action wage and hour claims filed against them under the Fair Labor Standards Act (FLSA) and state labor laws. The Department of Labor (DOL) estimates that 80 percent of employers violate at least some wage and hour provisions. Claims that lead to a class action can threaten economic exposure that ranges into millions of dollars. With over 6,500 wage and hour class action filings at the federal level in 2010, wage and hour litigation comprised the largest single category of class actions on the federal docket for that year. In addition to federal filings, claimants bring numerous wage and hour claims under state law; in addition, regulators from state and federal labor departments also file suits against employers. As evidenced by the many national employers facing multiple class action suits in multiple jurisdictions, wage and hour litigation is a significant risk for employers.

33.2 Misclassification Cases

Claimants file two basic types of misclassification claims: exemption and independent contractor status.

(a) Exemption

The first type of misclassification claims involves exemption issues. Such cases allege that a company misclassified a group of employees as exempt from overtime or misclassified them as independent contractors. In overtime exemption cases, ascertaining misclassification often involves ...

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