Lawsuits Over Unpaid Wages on the Rise

Lawsuits over unpaid wages are on the rise across the nation. Not surprising, in this soft economy when every penny matters.

According to the Sacramento Business Journal, a record number of federal wage-and-hour lawsuits have been filed, as well as what it described as “hybrid” cases, which are being filed on behalf of workers in California and in other states where employers conduct business.

In the year ended March 31, 7,064 lawsuits were filed under the Federal Labor Standards Act (FSLA), wrote the Sacramento Business Journal, citing a report confirmed by the Federal Judicial Center. Lawsuits are up by 33 percent—from 5,302 in 2008.

California plaintiffs are also changing the way in which they are filing lawsuits. In the past, they tended to focus on state laws, but are now alleging federal labor law violations and are broadening lawsuits to other states, said the Sacramento Business Journal. Labor law tends to favor workers in California; however, lawsuits involving California workers and including workers across the nation, can increase settlement amounts, noted the Sacramento Business Journal, when filed federally and with workers from other employer sites. Typical claims include “misclassification of employees, alleged uncompensated ‘work’ performed off the clock, and miscalculation of overtime pay for non-exempt workers.”

Earlier this year, we wrote that a group of workers at a Kansas slaughterhouse filed a lawsuit claiming that Creekstone Farms Premium Beef failed to pay them for all of the hours they worked. That federal wage and overtime lawsuit sought class action status to represent roughly 700 employees who worked at the Creekstone Farms Premium Beef slaughterhouse in the past three years.

According to the lawsuit, meat-processing employees at Creekstone Farms were paid on the basis of “gang time.” They were paid only when their production line was running, and for an additional 10 minutes per day to put on protective clothing. They also were not paid for overtime, according to the lawsuit.

Paz Sanchez, one of two lead plaintiffs filing the unpaid wage and overtime lawsuit, told the Associated Press that she was usually not paid for two to two-and-a-half hours of work each week.  “The failure of an employer of food processing employees to pay the employees for all their compensable time is a common occurrence,” an attorney representing the workers told the Associated Press. “It seems the employers have an attitude of `catch me if you can.’”

The federal Fair Labor Standards Act (FLSA) requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked, as well as overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. According to the Labor Department, in fiscal year 2008, more than 197,000 employees received a total of $140.2 million in minimum wage and overtime back wages because of FLSA violations.

The majority of these violations involved unpaid overtime. If an employer violates the FLSA, a plaintiff employee is entitled to statutory damages, which include past wages, attorney fees, and liquidated damages.

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