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Misclassification litigation worries almost half of employers: Survey


Forty-nine percent of employers are worried about the possibility of misclassification litigation or a U.S. Department of Labor audit related to this issue in the near future, according to a survey by law firm Littler Mendelson L.L.P.

“In recent years, employers have faced an explosion of wage-and-hour lawsuits,” according to the survey report. In 2012, there were 2,507 wage-and-hour collective actions filed in federal courts, for instance, compared with 139 discrimination class actions, said the report.

In these wage-and-hour lawsuits, employees claim they were not paid what they are owed because they were misclassified as exempt from overtime. Who is exempt is determined by job responsibilities, based on DOL standards.

The Littler survey, which was issued Monday, was completed by 325 human resources professionals, executives and in-house counsel.

Among other survey results, 54% of employers have conducted audits on this issue or evaluated their support for claimed exemptions, while another 14% plan to do so in the next year.

The survey also found that 57% have encountered employees who misrepresented their job duties.

Atlanta-based Littler shareholder Lisa A. Schreter said in order to avoid litigation in this area, employers “should be thinking about the possibility of misclassification litigation now” and “how you would defend the lawsuit if it came into the door today.”

Ms. Schreter said one important tool that can be used to establish that workers are exempt is self-assessment forms.

“It’s a very rare employee who’s going to understate their responsibilities, so that kind of evidence” can be important, she said.

Copies of the survey are available here.