Record Year for Wage and Hour Lawsuits

The number of filings for wage and hour lawsuits in federal court has risen more than 300 percent over the past 15 years to a record of 8,871 filings in Fiscal Year 2015. In 2000, there were less than 2,000 of these lawsuits filed in federal court.

The Washington Post called the rise “particularly dramatic” even in America’s litigious society. But it should come as no surprise to those working in the area and following the statistics about wage theft. A Temple Report on wage theft in Pennsylvania published this summer concluded that PA workers lose between 19 and 32 million in wages every week because employers fail to pay their staff according to the law.

There have been a number of initiatives that have pushed this issue to the forefront. Among them is the movement among low wage workers for a living wage that has gained popularity in many cities and with many politicians. They have achieved a number of victories that would have been thought unthinkable just five years ago. In particular, restaurant workers are now gaining momentum for their calls of $15 an hour and a union.

The trend toward classification of on-demand workers at startups and technology companies as independent contractors has also contributed to the increase in filings. Uber, Homejoy and several other companies saw high-profile wage litigation over whether their staff were truly employees or were indeed independent contractors.

Another initiative that could increase wage lawsuits in the future is the Department of Labor proposal, supported by President Obama, to adjust the overtime exemption for inflation. If the minimum salary to be considered a professional or administrative employee is increased from $23,60 annually to $50,400, it is estimated employers will need to pay overtime to 5 million more salaried workers.

Eric Young and the employment attorneys of McEldrew Young have helped workers receive backpay in a number of cases where their employer engaged in wage theft. We expect this will be a bigger practice area in our firm over the next few years and look forward to helping other employees get the pay that they deserve under the law.