Protect Your Business From Costly Wage & Hour Claims

Wage and hour claims represent some of the most frequent workplace disputes, often arising from misunderstandings or misapplications of labor laws.  The most common unpaid wage claim is when workers are not compensated for all hours worked.  Other prevalent issues include inaccurate final paychecks, incorrect commissions, illegal deductions for uniforms or damaged equipment, unpaid overtime for hours beyond 40 in a week, minimum wage violations for tipped employees, misclassification of workers as independent contractors or exempt from overtime, and uncompensated work hours such as prep or cleanup time.  These claims are particularly common in the restaurant and hospitality, healthcare, and janitorial/cleaning services industries.

Unpaid wage claims can be a costly problem for your business.  When an employee makes an unpaid wage claim, not only can they recover the amount of the unpaid wages, but they may also be entitled to have the employer cover their legal costs as well as pay interest on the amount owed.  To add to these costs, an employer might even be required to pay twice the amount of the unpaid wages owed unless they can demonstrate that they had a good faith belief that the underpayment was in compliance with the law.

Implementing best practices can significantly lower the risk of costly wage disputes:

1. Encourage accurate recording of all work time for nonexempt employees.
2. Prohibit off-the-clock work.
3. Require preapproval of overtime and business expenses.
4. Ensure reimbursement for all necessary business expenses.
5. Implement effective training to supervisory personnel and employees—businesses should not rely solely on handbooks but should offer comprehensive training and conduct regular follow-ups.
6. Follow the Department of Labor Fact sheet for determining overtime exemption status.

By maintaining transparent communication with employees and monitoring compliance, businesses can reduce the risk of wage disputes and foster a positive work environment.

For wage and hour compliance inquiries, contact Tracy Aparo, eGage Human Resources & Safety Consulting, at tracyaparo@egage.net, or Allie Levene, Employment Attorney, at allie@levenelegal.com.