Wage and hour laws are critical protections for employees, but they can also create significant risks for employers who fail to comply. Lawsuits involving unpaid overtime, misclassified workers, or minimum wage violations are among the most common—and costly—employment claims businesses face today. For employers, understanding and following wage and hour regulations isn’t just about compliance; it’s about protecting your business from litigation and preserving a positive workplace culture.

Key Wage and Hour Laws Employers Should Know

• Fair Labor Standards Act (FLSA): The FLSA is the primary federal law governing minimum wage, overtime pay, recordkeeping, and child labor. Most employers must pay non-exempt employees overtime at 1.5 times their regular rate for hours worked over 40 in a workweek.
• State and Local Laws: Many states and municipalities have their own wage and hour rules that can be more stringent than federal standards. Employers must comply with the strictest applicable law.
• Employee Classification: Properly classifying workers as exempt, non-exempt, employees, or independent contractors is crucial. Misclassification can lead to unpaid wages, penalties, and back taxes.

Common Causes of Wage and Hour Lawsuits

• Unpaid Overtime: Failure to pay overtime or improperly calculating overtime rates.
• Off-the-Clock Work: Employees working before clocking in or after clocking out without compensation.
• Meal and Rest Break Violations: Not providing legally required breaks or failing to compensate for missed breaks.
• Misclassification: Treating employees as independent contractors or exempt workers when they don’t meet the legal criteria.
• Failure to Keep Accurate Records: Inadequate documentation of hours worked can expose employers to claims and penalties.