Your employees are being urged to sue you for overtime pay. Web site www.paymyovertime.com asks them:

“Did you know that your boss may be driving around in a Lexus purchased with overtime pay that should have been given to you? That’s right, your employer or former employer may owe you enough overtime money to take a vacation, buy a car, or put a down payment on a home, and you don’t even know it! As Lawyers’ Weekly USA recently reported (1/7/02), ‘An overtime claim is a sleeping giant that lurks in a lot of cases and is often passed by. Experts seem to agree that violations are extremely common in nearly all industries.’ Did you know there is an estimated $39 billion owed to employees paid on a salary who really should be paid overtime under often overlooked overtime laws? That’s right -- $39 BILLION! … Our website shows you some of the major ways that employers fail to properly pay employees under the Fair Labor Standards Act (‘FLSA’) federal overtime laws, and how to combat it.”

Web sites, such as www.overtimepay.com, ask employees to examine:

• Are you properly categorized as “exempt?”
• Do you have pay deductions impermissible for exempt “salaried” workers?
• Ever “work off the clock” or at home?
• Not always free for your full lunch time?
• Not properly paid for “donning or doffing” or travel time?
• Too “inside” to be an “outside salesperson?”
• Do too much manual work to be “executive” or “administrative?”

Plaintiffs’ lawyers are eager to file “class actions” or “collective actions” on behalf of large groups of employees. Unions have instituted some of these suits in “corporate campaigns” to force employers to enter into “neutrality” and “card check” agreements.

In 2005, 3,599 lawsuits alleging violation of the federal Fair Labor Standards Act were resolved in the federal courts -- more than double the 1,596 resolved in 2000.

Samples of recent newspaper-reported settlements:

• Citigroup paid $98 million to commissions-paid “brokers” who said that they were wrongly classified as salaried professionals.
• Videogame creator Electronic Arts paid 618 “computer graphic artists” $15.6 million on overtime claims.
• Computer Sciences Corp. paid $17.2 million to “systems administrators” and “technical staff.”
• Bank of America paid $14 million to settle two lawsuits of “loan account executives” who claimed they were not exempt and had not received required meal and rest periods. Reportedly, plaintiffs’ attorneys received $1.92 million (33% of the settlement amount) in one of the cases and $2.2 million (25% of the settlement) in the other.

The Fair Labor Standards Act expressly provides for recovery of attorney fees, unpaid compensation, and “liquidated” (double) damages. Additionally, statutory penalties may be assessed for “willful” violations. Several states also have laws that impose requirements or limit exemptions more than the FLSA.

We urge employers to put into effect an express internal complaint procedure for overtime pay complaints, such as has been done for harassment complaints. We also urge expert “spot check” employee interviews on pay practices and exemptions. Do not rely on written job descriptions or general assumptions. What counts are individualized findings of actual duties and practices, which may be discovered only by such a spot check. In certain instances (particularly with large employers), following expert “spot check” interviews it may be advisable to conduct a systematic audit of the employer’s classification of employees as exempt and non-exempt.

Too often employers learn of employee allegations only after the U.S. Department of Labor does an audit or after a lawsuit is filed by plaintiffs’ attorneys. The pressure to meet budgets and keep overtime costs low sometimes contribute to supervisory laxness or cost cutting that can result in costly litigation which also makes for bad publicity. Expert “spot check” interviews can alert management to these.

We have over 30 labor and employment attorneys now who can provide assistance to you in any of these regards. Please let us know if we can help.