In our last post, guest author Stephanie R. Thomas, Ph.D., reviewed some of the disturbing employment litigation trends we witnessed in 2010. In this follow-up post, Dr. Thomas provides suggestions to employers on how to remain proactive in 2011 and reduce the risk of being subjected to an employment related lawsuit.

Wage and Hour Compliance

To prepare for Wage and Hour compliance in 2011, employers should focus their initial compliance efforts on four main areas:

1.      Recordkeeping - review your recordkeeping practices to ensure you are keeping information about hours worked each day and each workweek, total daily or weekly straight-time and overtime earnings, and weekly regular hourly rate of pay.

2.      Exempt versus Non-Exempt Classification – proper classification is essential to compliance. If your employees are misclassified, it’s likely that you’re going to be out of compliance with other wage and hour laws for these employees.

3.      Determination of Hours Worked – ensure that on-call time, waiting time, travel time, setup time and all of the other time required or permitted is included in hours worked, as appropriate.

4.      Calculation of Overtime Pay – verify that your overtime calculations are based on the regular rate of pay, not the employee’s file rate of pay. This is one of the most common mistakes employers make.

Retaliation Claims

There are three simple steps employers can take to reduce their exposure to retaliation claims in 2011:

A. Adopt a stand-alone anti-retaliation policy that sets out the prohibition against retaliation and the procedures for redress. A stand-alone policy not only demonstrates that the employer is committed to non-retaliation, it can also be used as evidence in the event that an employee files a retaliation claim in the future.

B. Before an adverse employment action is taken against an employee who has participated in a “protected activity”, that action should be reviewed by appropriate management personnel and legal counsel. The reviewers should consider whether the proposed action is consistent with the employer’s typical practice and whether the action is supported by appropriate documentation.

C. Counsel and train managers and supervisors about retaliation, the organization’s anti-retaliation policy, and how to respond when a complaint is brought to their attention. The employer should also keep documentation on the training (e.g., who received training, what was covered, when the training took place, etc.).

While these three steps won’t guarantee that you’ll be free from retaliation claims, they will help to minimize the risk and can assist in your defense should you find yourself in retaliation litigation.

The Importance of Being Proactive

Based on the recent history of increasing employment litigation, employers should prepare for that trend to continue into 2011. We’re also likely to see more aggressive enforcement efforts from the Department of Labor. To meet this challenge, employers should engage in proactive analyses that assess and minimize the risk of employment-related litigation. These proactive analyses can identify potential problem areas and give the employer an opportunity to take corrective action, where appropriate. In my experience, many matters that resulted in litigation could have been prevented, had the employer performed some basic statistical analysis of its data with respect to equity.

Stephanie R. Thomas, Ph.D. can be reached via the Proactive Employer.

Disclaimer

Guest post by: Stephanie R. Thomas, Ph.D.

In a previous guest post, I predicted an increase in employment litigation during 2010. As the year comes to a close, it’s time to look back and see if my prediction was correct.

According to Fulbright’s 7th Annual Litigation Trends Survey Report, 2010 did in fact see an increase in employment litigation:

FLSA / Wage and Hour Matters:   18% increase

Traditional Labor Union Matters:               11% increase

Age Discrimination:                                        10% increase

Race Discrimination:                                        7% increase

ERISA Matters:                                                  7% increase

Gender Discrimination:                                   6% increase

Disability Discrimination:                                6% increase

What were the major highlights of 2010, and how can employers prepare for 2011?

Wage and Hour Matters Still Pose Major Risk

For the past several years, there’s been a general increase in wage and hour disputes. That trend continued into 2010, with misclassification and overtime claims leading the way. In fact, wage and hour claims are the fastest growing type of employment litigation. Some experts have said that multi-plaintiff wage and hour lawsuits post the single greatest employment litigation threat to American businesses today. This may seem like an exaggeration. But when you consider that the Department of Labor estimates that approximately 70% of employers are routinely violating wage and hour laws, and the Wage and Hour Division recovered back wages of $1.4 billion for Fiscal Years 2001 through 2008, it seems a little more plausible.

Retaliation Claims Are On The Rise

Retaliation claims are also increasing; among all charges filed with the EEOC in 2009, 36% included a claim of retaliation. This represents an increase of 70% over the last decade. The 2010 statistics will be available in January 2011, and we’re expecting the trend in retaliation claims to continue.

It’s important to note that an employee can prevail on a claim of retaliation even if she doesn’t prevail on the underlying complaint of discrimination. Karen Gieselman, an attorney in the Columbia office of Fisher and Phillips, stated:

It’s easier for a juror to believe that a manager or supervisor changed his or her behavior towards a ‘squeal’, than it is for a juror to believe that the same manager or supervisor discriminated against the same employee.

Changes in the Regulatory Environment

The message of the Department of Labor’s Five Year Strategic Plan for the Fiscal Years 2011 Through 2016 is “good jobs for everyone”. Secretary Solis is making some changes at the agency to achieve that goal. Specifically, the Department of Labor will be changing its compliance efforts, and focusing those efforts on its worker protection agencies.

The Strategic Plan indicates that the burden of compliance will be shifting to the employer. This ties in to the Department of Labor’s Regulatory Agenda and the “Plan-Prevent-Protect” strategy.

The “Plan-Prevent-Protect” strategy centers around the idea that employers must “find and fix” violations and insure compliance before an investigator arrives at the workplace. The Department of Labor has stated that employers must understand that the burden is on them to obey the law, not on the Department of Labor to catch them violating the law.

Compliance in 2011

In our next post, Ms. Thomas reviews strategies that employers should consider to reduce their risk of litigation in 2011.

Stephanie R. Thomas, Ph.D. can be reached via the Proactive Employer.

Disclaimer