Pay Violations On The Rise; Employees Fight Back With FLSA Claims

Claims against employers for failure to meet minimum wage and overtime pay laws are on the rise. According to the American Bar Association, the filing rate of federal fair wage cases increased more than 13 percent in the first nine months of 2010 alone compared with the same period in the previous year.

And the rate has continued to increase. The Bureau of National Affairs reports that for the year-long period ending March 31, 2012, these suits reached a record annual total of 7,064 federal filings.

These lawsuits are based on the Fair Labor Standards Act, or FLSA, a federal law that protects employees and works to ensure that they receive fair compensation, including minimum wage and overtime when required by law.

A recent case involving retail giant Target illustrates the basics of how an FLSA suit can unfold.

The Target Suit and FLSA Basics

Some jobs are exempt from the FLSA requirement that overtime pay be provided for extra hours worked during a 40-hour workweek. The exempt categories are those with positions that are “executive, administrative, or professional” in nature, the so-called “white-collar exemptions.”

Employees that do not fall within an exempt category are entitled to the protections offered by FLSA. This includes the right to file a claim for not receiving proper FLSA payment from an employer.

In 2002, a Target employee started an administrative position that was exempt from FLSA overtime protections. Almost two years later, the employee was promoted to a new position in which she worked long hours. She sued Target for failure to pay FLSA overtime wages and the legal issue in the case became whether or not the new job was still exempt under the administrative category.

The court used FLSA’s three-part test to determine if the employee still fell within the administrative exemption from FLSA protection. If a job meets all three of these prongs, it is exempt from overtime requirements:

• Employee compensation: preset salary or fee
• Employee duties: office or other nonmanual work related to management or general business operations
• Employee responsibility: use of “discretion and independent judgment” on important issues

In this case, the federal court held that the employee’s second job as a fraud and theft investigator met this test and fell into the administrative-employee exemption, making her ineligible for overtime.

Determining whether an FLSA claim can offer a worker the opportunity to recoup missed pay can be difficult. Therefore, it is wise to seek the counsel of an experienced pay violation attorney if you or a loved one is concerned that an employer did not properly compensate for overtime work.