Why More Employers Get Sued for Overtime Pay Violations
Posted by robert ottinger on Fri, Jul 23, 2010 @ 10:27 PM
The Wage & Hour blog published by Fox Rothschild reports a sharp rise in overtime pay suits in 2010. According to the post, overtime pay suits under the Fair Labor Standards Act rose 23% in the second quarter of 2010.
The author of the blog speculates that increase in overtime suits is the result of a conspiracy by plaintiffs lawyers to file more suits, greedy plaintiffs lawyers trying to get rich off of the fee shifting statutes, and the easy burden of proof under the FSLA. But the author forgot to mention the biggest reason for these lawsuits is the fact that employers do not pay their employees overtime.
The cause, in my view, is that is makes economic sense for employers not to pay overtime. Overtime payments can be very expensive and the odds are that most employers will not get caught and even if they do get caught, they can pay later. So it just makes sense to avoid paying overtime. This is the real reason for the problem. But this is nothing new - this has been going on for decades. What is new is that more employers are now getting caught.
More employers are getting busted for overtime pay violations because the Obama administration has made wage theft a priority. The federal government now cares about this issue and it is now easier than ever to win these cases. But again, the real reason for the suits is the fact that employers are just not paying overtime to their employees.