According to a recent report by Littler Mendelson, the largest U.S. based law firm that specializes in employment and labor law 4,204 wage and hour class action lawsuits were filed in 2012 in the state and federal courts combined, up 11% from 2010. The civil settlements totaled $467 million in 2012 alone and approximately $2.7 billion from 2007-2012. The cost and disruption associated with such an incident raises the question as to what can be done to help reduce the risk of losing a claim of violating FLSA.
Littler Mendleson surveyed HR professionals, C-suite executives in-house counsel across the U.S> on their experiences with disputes involving employee classification and certain wage and hour laws to gain insight on how employers were responding to the threat of misclassification claims and audits by the U.S. Department of Labor. Among those respondents who had recently been involved in misclassification litigation or DOL audits, 57% have encountered employees who misrepresented their job duties.
When asked which form of documentation was used by their organization to demonstrate the exempt nature of positions and defend against the future exempt misclassification claims, the majority, nearly 82%, sighted up-to-date job descriptions. While current job descriptions are a great start, an employer needs to review the description to ensure they are consistent and consistently support the claimed exemption. More importantly these need to be acknowledged by the employee.
The only way to be sure your company won’t be taken advantage of by an employee is to have them sign off on the job description. Not just once, though. When hired you should have the employee sign, and then after each annual review or yearly review be sure to have them sign off once more. Especially if the job description has changed for some reason, be sure the employee has acknowledged this. The same stands true for employee raises. Once they receive a raise or promotion it’s important to know what more is expected of them and even more so it’s important that they sign off on this information as well.
