Navigating the Fair Labor Standards Act (FLSA) has always been a challenge for employers. The FLSA is a comprehensive national statute governing how to properly pay employees, and it has only gotten more complicated in recent years. Fueling this increased complication, the number of cases alleging FLSA violations is steadily increasing, as well as news coverage for wage and hour issues. Plaintiffs’ attorneys are attracted to FLSA cases because they are often susceptible to class action status and the FLSA provides for liquidated (double) damages and attorneys’ fees. Through March 2014, 8,126 FLSA cases had been filed, representing a 5 percent growth over the previous year. However, in the last 15 years, FLSA cases have shot up more than 400 percent.
Companies must consider many different factors when determining whether employees are being paid correctly. Bonuses, overtime, and time spent on pre- and post-work activities can all present FLSA issues. Even when employers do everything by the book, they can still get dragged into lawsuits. Consider the case of Integrity Staffing Solutions Inc., a temporary staffing agency whose employees work in Amazon.com warehouses. Before leaving the warehouse each day, Integrity employees were required to undergo security screenings to ensure they haven’t stolen anything. Two employees claimed the time spent on security screenings, which allegedly took up to 25 minutes each day, should be compensated. The case went all the way to the U.S. Supreme Court, which ruled in December that employees were not entitled to compensation for the time involved with the screenings under the FLSA since it wasn’t part of their work duties.