Payroll Processing:

Proper Calculation of Employee Pay Helps Minimize Wage and Hour Compliance and Litigation Risks

With wage and hour litigation on the rise, payroll accuracy should be a top priority for employers. Our review of court data shows that of all state and federal court employment law class actions filed in the United States, 90 percent are wage and hour class or collective actions. This increase in wage and hour litigation stems from Department of Labor initiatives that seek to inform employees of their rights under FLSA and the growing number of lawyers specializing in Fair Labor Standards Act (FLSA) cases. Why should employers be concerned?  The potential damages in these cases are alarming: in 2010 the average settlement in the top 10 reported wage and hour class and collective actions was $34 million.

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Highlights of Report

  • Recent trends in collective action for unpaid work time drive payroll imperatives.
  • Failure to properly calculate payroll "regular rate" increases risk of employee wage and hour complaints
  • Payroll processes and automation help employers stay ahead of wage and hour litigation trends.