1. Fair Labor Standards Act
Don’t let it cripple your business!
What is The Fair Labor Standards Act (FLSA)?
The US Department of Labor introduced the FLSA to establish a national minimum wage and guaranteed time and a
half pay for overtime for many jobs. In 2004 there were significant changes to FLSA’s overtime regulations, which
redefined which employees are affected by this federal law. Businesses must have a clear understanding of the
rules and record keeping requirements to make sure they are in compliance.
Currently Wage and Hour Lawsuits have surpassed employee discrimination suits by both number of filed suits and size
of settlements.
In tough economic times companies large and small will find themselves more exposed to lawsuits where the
defense costs alone can have a severe impact on the financial health of a company.
What You Do to Protect Your Business?
Until now insurance carriers have been reluctant to provide coverage largely because they viewed these lawsuits as the
result of “intentional acts.”
Limited coverage from a select few carriers is now available for this exposure. We have done the analysis of each
insurance company’s coverage form and we can review with you what your best option is.
This Can Cost You Money.
It Cost These People. Current Statistics from the New
York State Joint Enforcement Task
Cintas Corp. reached a settlement agreement in principal to pay $24 Force on Employee
million to resolve a 2003 class-action lawsuit that alleges it failed to Misclassification
pay its drivers overtime.
Wal-Mart paid a total of $640 million to settle 63 state and federal • Over 12,300 cases of employee
lawsuits related to wage and hour issues. Numerous class action misclassification with $157 million in
suits filed by former and currently employed hourly associates stated unreported wages
that Wal-Mart failed to provide rest breaks, meal periods or other
benefits or otherwise failing to pay them correctly. • “Main Street” sweeps of 304 business
found 67% were in violation requiring
Staples Inc. reached a $42 million dollar settlement in several class follow-up enforcement action
action lawsuits alleging the company did not pay its assistant store
managers they overtime time pay they were entitled. • Additional investigations have shown
4,565 misclassified workers and $71
Lowes Home Improvement paid an out of court settlement of $29.5 million in unreported remuneration
million for alleging that they did not pay their employees for hours
worked “off the clock” before and after their normal shifts.
Maran Corporate Risk Associates
Website: www.mcrainsurance.com
Phone: 631-283-8000