As we have discussed previously in this blog, wage and hour lawsuits continue to be prevalent.
Employers big and small have been facing an upward trend in wage-hour lawsuits over the past 10-15 years, and there is currently no end in sight. In the year 2000, for example, there were approximately 2,000 wage-hour claims filed under the Fair Labor Standards Act (FSLA). In 2015, almost 9,000 claims were filed.
Not surprisingly, the alleged misclassification of employees as independent contractors tops the list as one of the biggest weak spots for many employers. To learn more about the difference between an employee and independent contractor, please click here.
Consequences of improper misclassification
The consequences of mistakenly classifying an employee as an independent contractor are significant. Liability could include unpaid wages, liquidated damages, attorneys’ fees, civil and criminal penalties, government investigations and audits, back taxes, bad publicity, and more.
It is critical for employers to ensure that all supervisors and managers receive consistent training discussing updates to the law as well as company procedures. Additionally, businesses are encouraged to carefully review their employment policies and handbooks, ensuring that all policies and practices are up to date and compliant with state and federal legal developments.
For more information on how to avoid a wage-hour misclassification lawsuit, contact experienced business lawyer Drew E. Pomerance today.