The cost of hiring workers is significant. Recruiting is a major investment, as is training each worker. Companies will also pay quite a bit for salaries and benefits. Many businesses, particularly those paying workers on an hourly basis, try to control staffing costs to maximize profits. However, an attempt to minimize labor expenses can potentially lead to wage claims brought by employees who believe that they did not receive appropriate compensation for the labor they provided. Wage claims can lead to costly litigation in civil court that can also damage a company’s reputation.
Most employers would understandably prefer to avoid such allegations whenever possible. The following are some of the leading reasons that workers pursue wage and hour claims against employers.
Overtime wages can very quickly cut into a company’s profit margins, and many businesses take a firm stance against allowing overtime on a regular basis. Companies may institute policies requiring approval from managers or corporate offices before workers put in overtime. Regardless of the policies in place, if a worker is on the job for more than 40 hours, the company must pay overtime wages regardless of internal policies. Failing to do so is a top cause of wage and hour claims.
Time clock discrepancies
Maybe the company has a time clock rounding policy that requires the calculation of worker pay in 15-minute increments. Workers may view the rounding of their time worked as a violation of their fair pay rights. Depending on how a company implements such policies, the workers may have grounds for a lawsuit. Other times, there might be differences between the worker’s record of when they clocked in and out and the billable hours included in their paychecks. Significant discrepancies between the amount of time that workers were on the job and the number of hours included on their paychecks could prompt wage claims brought by under-compensated employees.
There are many job tasks workers in retail and service professions must perform for their employers, many of which are recurring responsibilities. Companies should ensure that workers receive appropriate pay for any regular job duties they routinely perform. If a company trained workers to do food prep before starting their shifts or cleaning after clocking out, those workers may eventually file a wage claim for hours of uncompensated labor that they have performed for the business.
Business executives who understand the issues that trigger allegations of wage theft can often take steps to minimize the risk of workers taking legal action against a company. Seeking legal guidance and proactively complying with federal wage regulations can help a business minimize embarrassing and expensive employee lawsuits.