The Facts About Wage and Hour Compliance
According to the Fulbright report on litigation trends, the fastest growing area of litigation is wage and hour issues. In fact, the U.S. Department of Labor estimates that close to 70% of employers routinely violate wage and hour regulations. Unfortunately, many do not realize it until they are sued or hit with substantial penalties for noncompliance.
Many Employment Practices Liability Insurance (EPLI) policies simply exclude wage and hour coverage altogether, while the policies that do cover against this exposure provide limited coverage for defense costs. Even a business which may be in full compliance with the law, could find itself burdened with footing the legal bills to defend against a claim filed by an employee, who is eagerly represented by a law firm experienced in filing these types of lawsuits.
Here are several action items to limit your risk and correct problems before they get costly:
• Review your compensation practices, especially classification of employees as exempt or nonexempt.
• Maintain complete, updated and secure employee records.
• Ensure the accuracy of time records.
• Establish well-defined workplace policies and procedures.
• Determine overtime accuracy to avoid noncompliance penalties.
Consult your insurance brokerage about coverage for wage and hour claims.
