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A Reminder To Conduct An FLSA Audit

Published by on April 8, 2008

An article in HR Magazine this month (SHRM membership required to access) entitled “Guard Against FLSA Claims:  Fair Labor Standards Act lawsuits are increasing.  Are your classifications in order?” reminds us of the need for employers to be proactive about FLSA issues.  The US has seen a dramatic increase in FLSA lawsuits in recent years.  […]

An article in HR Magazine this month (SHRM membership required to access) entitled “Guard Against FLSA Claims:  Fair Labor Standards Act lawsuits are increasing.  Are your classifications in order?” reminds us of the need for employers to be proactive about FLSA issues.  The US has seen a dramatic increase in FLSA lawsuits in recent years.  Here is an article in Fortune Small Business article called “Overtime Pay:  A ticking time bomb.”  We previously commented on the low threshold for certification of a collective action by a court here.  Overtime lawsuits are here to stay and ignoring the problem will not make them go away.

Employers should conduct an analysis of job classifications and position descriptions on a regular basis to determine whether they satisfy the FLSA exemptions.  Employers should also check that pay practices are in compliance with the DOL regulations.  Consider including wage/hour issues in existing open door or complaint procedures.  Good faith attempts by an employer to ensure compliance can help limit your exposure to liquidated damages (double damages awarded as a penalty for willful violations of the FLSA) in an overtime lawsuit.

For additional reading, here are some blog posts on FLSA audits and related topics — here (Ohio Employer’s Law Blog), here (Connecticut Employment Law Blog) and here (Pennsylvania Employment Law Blog).

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