Wage and hour lawsuits have reached historic highs across the nation, as more and more workers become aware that they have rights – and those rights aren’t always respected.
Nearly 9,000 Overtime Lawsuits Filed Last Year
8,871 lawsuits cited violations of the Fair Labor Standards Act, a law that sets minimum wage and overtime requirements, in the year ending September 30, 2015, according to recent statistics released by the Federal Judicial Center.
Compared to only 1,935 filed in 2000, that’s a 358% increase in just 15 years. The Washington Post reports that federal lawsuits overall rose only 7% in the same time period.
Here’s a look at how wage and hour suits have grown over time:
Now there’s a lot of variation evidenced in these numbers, but the general trend is clear: workers are waking up to the reality of wage theft.
Why So Many Workers Are Filing Lawsuits
As overtime lawsuits continue to grow, numerous theories have been floated to explain the rise.
1. New industries have created legal “gray areas.”
Just look at Uber, DoorDash or any other company in the so-called “sharing” economy. Are those drivers independent contractors or true employees? Employers unanimously say independent contractors, since it’s cheaper that way, but workers argue that since companies control almost every aspect of their working lives, they should be entitled to benefits, expenses and overtime.
True to form, Uber drivers are lining up to file wage violation lawsuits against the San Francisco technology giant.
2. Unionization is on the decline.
Between 1973 and 2007, union membership among American men dropped from 34% to 8%, and membership among women fell from 16% to 6%. The same American Sociological Review that reported those numbers linked the decrease in unionization to rising levels of wage inequality. In other words, fewer workers are banding together, and employers are winning as a result.
Without unions to protect their interests, more and more individual employees are turning to the court system to get the money they’ve earned.
You can find the Washington Post’s in-depth look at the effect of unionization on wages here.
3. The government is cracking down on illegal pay practices.
A slew of new guidances from the Department of Labor (DOL) have put the national spotlight back on fair – and unfair – labor practices. In fact, some legal pundits believe we’re living in a golden age of overtime, as recent interpretations from the DOL have expanded wage rights to thousands of home health aides and workers who used to be classified as independent contractors.
For his part, President Obama has proposed to increase the overtime salary threshold from its current level of $23,660 to $50,440. That means thousands of new workers (many of whom are living below the poverty line, which is set at $24,008 right now) could be entitled to overtime very soon.
Update September 7, 2017 – Labor Department Accepts Overtime Rule Failure
Salaried workers shouldn’t expect an expansion of overtime rights anytime soon. The Department of Labor, now controlled by appointees of President Trump, has allowed former-President Obama’s proposed overtime rule to burn out in a Texas federal court. The rule, which was challenged by business organizations and a number of state governments, was recently struck down by Federal Judge Amos Mazzant on Thursday, August 31, 2017. The Labor Department has now said that it will not appeal Judge Mazzant’s ruling. Read more here.
4. Workers are fighting for a minimum wage increase.
Advocates at the national, state and local level have been clamoring for an increase in the federal minimum wage for decades. But their voices have never been louder than they are now. That’s because the minimum wage has actually gone down over time, not up.
If we adjust historical minimum wages for inflation, they peaked in 1968, nearly 50 years ago. Since the last increase, a minimum wage worker’s money has lost value; someone making the minimum now can buy a little over 8% less than they would have been able to in 2009.
The Pew Research Center has a great graph to show you just how much minimum wage workers have lost over time.
Will 2016 Be Even Bigger?
All these changes mean that wage and hour lawsuits are likely to increase even more next year. Current estimates suggest that well over 9,000 overtime claims will be filed in federal courts in 2016. It’s more important than ever for workers to familiarize themselves with the Fair Labor Standards Act and its protections.
If you think you’re being taken advantage of, act now. Know your rights and stand up for them.