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More Workers Filing Lawsuits To Claim Unpaid Overtime


As previously discussed in this blog, all hourly employees are entitled to overtime pay for time worked over 40 hours per week. This is also true of salaried workers who earn less than $455 per week and/or are not fulfilling roles which are administrative (office work related to general business operations), executive (manage employees and be in charge of hiring and firing), or professional (has a specialized degree or skills, such as a lawyer or physician). Also exempt are information technology workers and sales representatives whose hours cannot be easily tracked.

However, many employers have taken advantage of the tough job market to exploit their employees, making them work harder for essentially less money. Inflation adjusted wages fell about 2% in 2011 and the percentage of workers reporting no wage change is at its highest level in 30 years. S&P 500 companies made an average of $420,000 in revenue per employee in 2011: 11% more than in 2007. While millions of Americans are still searching for work, corporate profits are reaching record highs.

A sign of a returning economy however, is the fact that employees are beginning to fight back. More employees quit their jobs in February than in any month since November 2008 and workers have filed 32% more lawsuits against their employers for unpaid overtime last year than in 2008.

Workers’ main grievances are that they were forced to work more than 40 hours a week by:
• Being forced to work off the clock,
• Having their jobs misclassified as exempt from overtime requirements, and
• Because of smartphones and other technology, work bled into their personal time.

In 2011 just over 7,000 wage and hour suits, many of them class actions, were filed in federal court, nearly quadruple the number of lawsuits filed in 2000. In fiscal 2011, the Labor Department recovered $225 million in back wages for employees, 28% more than in 2010.

The Labor Department added 300 wage and hour investigators in the past two years, thereby increasing its staff by 40%. This was done in an effort to step up the department’s efforts to protect workers, particularly in high-risk industries that employ low-wage and vulnerable workers such as hotels and restaurants.

The recession put more pressure on businesses to cut costs, which they often did by getting more out of their employees for less money. If they had had to pay the overtime costs, it is likely that many of them would have hired more workers in the economic recovery.

Businesses have been retaliating by converting many positions which were previously salaried, to hourly wage positions, creating a lower baseline pay rate in order to take into account losses from expected overtime. They have also been drawing clearer lines between workers and managers and, in many cases, reining in modern privileges such as company issued smartphones and telecommuting.

Meanwhile, courts are trying to reconcile decades-old laws with ever-evolving technology. The spread of BlackBerrys and smartphones has workers tied to employees even during off hours and vacations.

Employers say the dramatic increase in lawsuits is a reflection that the 1938 Fair Labor Standards Act has become outdated in an age when most employees want the flexibility to work at home or answer office e-mails on their free time.

The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. If you live in the Chicago area and have a wage and hour dispute, contact a North Chicago wage and hour lawyer at the Chicago Overtime Law Center today at 312-869-4095 or online.