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7 Key Things You Need to Know About Wage and Hour Claims

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7 Key Things You Need to Know About Wage and Hour Claims

From discrimination to retaliatory discharge, companies with 100 or more employees can expect

an Employment Practices Liability (EPL) claim every three years.[1]

And even if you believe you’re doing everything by the book, you can still end up on the hook for a costly lawsuit; the median EPL judgment is $200,000, not including defense costs.[2]

Of all the types of EPL claims, wage and hour claims often cause employers the greatest frustration. Wage and hour claims frequently arise in the form of class-action lawsuits, and can be triggered by any number of complaints, including commission and bonus disputes, pay discrepancies and employee misclassifications.

Here are seven common questions about wage and hour claims — along with the answers you need to help protect your balance sheet from the potentially devastating impact of these lawsuits. 

Q: What are the causes of wage and hour claims, and how can employers limit them?

A: Wage and hour claims arise when a non-exempt or non-salaried employee makes a formal complaint about unfair compensation for work done, for example, being denied overtime pay. It is difficult to entirely avoid wage and hour complaints, but you can take some proactive measures to limit them, such as requiring employees to sign a weekly timesheet, verifying meal and rest breaks and recording overtime.

Timesheets are proof of time worked and the employee’s acknowledgment that the time is accurate. Companies should be diligent in maintaining these records, retaining them for several years and documenting timesheet procedures to ensure a strong defense in the event of a claim.

The law changes frequently, so you should review your processes for capturing meal and rest breaks and overtime with your attorney to confirm their compliance and effectiveness. Any employee time spent with the employer should be recorded, including, for example, time for logging into a system, changing into a uniform, cleaning up or travelling to a work site in an employer vehicle. 

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HUB International
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