Most employers are well aware that the Federal Fair Labor Standards Act (“FLSA”) requires them to pay employees for all hours worked and to pay overtime for all hours worked over forty in a week for those employees who are not exempt from the FLSA’s overtime requirements.  Although these rules seem simple enough, employers are increasingly being challenged under the FLSA based on the way they count hours worked and on their decisions to classify an employee as exempt from overtime requirements.

On March 15, 2007, a collective action was filed against Bank of America (“BOA”) on behalf of a large group of employees, claiming that BOA failed to pay overtime and wages for all hours worked.  The claim is based on time that employees allegedly worked over lunch breaks, performing duties outside of their regular position, and attending at least one mandatory company event, which time was not included in the Company’s calculation of the employee’s hours worked.  This recent suit marks the tenth open FLSA case against BOA according to news sources. 

The suit against BOA reflects what appears to be a growing trend in the filing of wage and hour suits.  Based on our informal research, there have been at least thirty collective actions filed against large and small employers seeking unpaid wages and overtime since January of this year.  Such suits can be quite costly for employers because, in addition to unpaid wages, employers may be required to pay liquidated damages and attorney fees if a violation of the FLSA is proven.  Collective actions pose a substantially greater risk to employers because they include claims of large classes or groups of employees. 

Because wage and hour lawsuits are on the rise across the country, employers are urged to examine their payroll practices to make sure they have properly classified all employees as exempt or non-exempt and that they are recording and paying wages for all time worked by their employees.

For questions regarding this Alert or other employment matters, contact David Woodard at dwoodard@poynerspruill.com or 919.783.2854, or Susie Gibbons at sgibbons@poynerspruill.com or 919.783.2813.