California One of Worse State in Labor Prosectutions

BY RICK WEINBERG, California Business Journal

California is one of the worst-hit states when it comes to Department of Labor prosecutions, according to a new Fair Labor Standards Act lawsuit research tool released by TSheets, an employee-time tracking app, and Lexology, a legal research platform.

Private lawsuits have risen 456% since 1995, while Department of Labor investigations have collected more than $1.1 billion in back wages since 2009. These are alarming statistics for business owners, and new FLSA regulations set to take effect on December 1, 2016 are likely to cause a new wave of prosecutions when the overtime threshold doubles to more than $47,000.

Here are the California-related labor statistics:

• Total number of successful wage and hour prosecutions by the Department of Labor (DOL)  in California is 10,176 — this is 8.5% of the national total, putting California second behind Texas.
• Total cost of all wage and hour prosecutions by the DOL in California, in back wages and fines, is $162,711,709 (this excludes legal fees)
• Average cost per prosecution to each business affected is $15,989 (excluding legal fees)
• Top three worst affected industries are manufacturing (2,812 prosecutions, costing businesses $35,865,145), healthcare (1,541 prosecutions, costing businesses $25,097,433), and food services and accommodation (1,430 prosecutions, costing businesses $16,336,6620)

The new Fair Labor Standards Act lawsuit research tool is geared to help business owners gain new insight into steeply rising wage and hours lawsuits brought under the Fair Labor Standards Act.

Edward Costelloe, Managing Director of Lexology, says: ”We are excited about the opportunity to give our subscribers insight into the potential FLSA liability their clients may be exposed to. The FLSA research tool will be a valuable resource to business owners, HR professionals and legal professionals. It will make FLSA compliance more transparent and potentially cheaper.”

Matt Rissell, CEO of TSheets, adds, “The FLSA is relevant to almost every employer in the U.S. and with the looming overtime regulations estimated to affect at least four million employees, businesses everywhere need to act today to get the insight they need to prepare and protect themselves. Our research shows that four out of every five Labor Department investigations leads to a prosecution. These costs can be devastating — but so could the overtime costs that are about to hit. If you don’t know how many hours your salaried employees beneath the threshold are working, it’s time to find out — as soon as possible.”

Keri Nelson, executive director of the Rockford, IL, Habitat for Humanity says, “We were honestly shocked to find out that many of our salaried staff members were putting in way more than 40 hours a week. That information gives us the power to make an informed decision about how to comply with the new FLSA regulations while keeping our employees whole.”

Interactive FLSA wage and hours research tool here.

Also see: the research tool (scroll to “The Data in Context” and “Trends in the Data”).

Additional article: “What You Need to Know About FLSA Wage and Hour Lawsuits,” which is based on a discussion between three leading labor law attorneys and covers why FLSA lawsuits have been on the rise, what companies can do about them, and what impact the new overtime regulations will have.

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