The Fair Labor Standards Act (FLSA) establishes certain minimum standards for private sector, local, state and Federal government workers including a 40-hour work week, minimum wages, and overtime pay. Compliance with the FLSA is not only mandatory for employers, but necessary to protect their employees and their pockets.
In recent years, many employers have been faced with large class action lawsuits related to disputes over employees’ and independent contractors’ wages and overtime pay. In 2012, after many years of costly litigation, Rite Aid Corporation settled a class action lawsuit brought against it by 6,100 current and former employees for $20.9 million. The suit arose out of the retail giant’s failure to pay its employees for overtime worked. Rite Aid claimed the employees were not entitled to overtime payment based on their employment status as exempt employees under FLSA. The court disagreed, finding the employees were improperly categorized as exempt under the law. In 2007, the first of two class action lawsuits was filed against Wal-Mart by current and former employees who were denied overtime payment and breaks. Philadelphia Common Pleas Judge Mark Bernstein found against Wal-Mart and awarded the employees a total of $140.8 million in damages.
Employers should keep in mind that it doesn’t matter whether your company is big or small, the same rules apply and you could easily be faced with claims for violations of the FLSA. Adhering to the standards set forth in the FLSA will not only allow you to avoid expensive litigation and potentially large damage awards or settlements, it will also help to prevent your company, and its reputation, from coming under scrutiny. If a claim has been brought against your company under the FLSA, or you want to learn more about protecting your company and its employees by following the standards set forth in the FLSA, please contact the experienced attorneys at Stark & Stark to discuss your legal rights.
Bianca A. Roberto is an Associate in Stark & Stark’s Business & Corporate Group in its Yardley, PA office. For questions, or additional information, please contact Ms. Roberto.