The FLSA - Basic Worker Protections or a "Business Killer?"

The FLSA – Basic Worker Protection or a “Business Killer?”

            The Fair Labor Standards Act (“FLSA”) is a statute enacted in 1938 to ensure fair pay to workers. The FLSA adopted the 40-hour workweek as the “standard” workweek in this country.  In addition to mandating fair pay for employees, compliance with the FLSA by employers helps to level the playing field among competitors with regard to the cost of employee compensation. One component of the FLSA is the private cause of action, which includes an award of attorney’s fees to successful plaintiff’s attorneys in wage and hour cases.  This attorney’s fee component of the FLSA was designed to give attorneys an incentive to take on wage and hour cases, including the smaller cases.

Employers That Complain About the FLSA Don’t Want to Follow the Rules

            Employers who don’t comply with the FLSA and who don’t want to follow the law complain about being required to do so. These companies and their attorneys and spokesmen complain that it is not fair that they are required to pay employees fairly; they sometimes refer to the FLSA as a “business killer.”  These people cite to purportedly “unfair” and “outrageous” results like Mr. Jon Hyman, the author of http://www.workforce.com/2018/02/26/exhibit-whats-wrong-fair-labor-standards-act/.  That particular article, at first blush, may seem like it demonstrates an example of a miscarriage of justice.  However, in my years of experience litigating wage and hour cases, the only “disproportionate” attorney fee awards are the result of an employer who will not acknowledge that it is liable, which forces the employee’s attorney to work more on the case and generate attorney’s fees. 

Attorney Involvement Helps Enforce The FLSA

            The only thing that introducing the concept of “proportionality” in attorney fee awards would do is to further discourage representation of low-wage workers in FLSA claims, to the detriment of the most vulnerable in our society.  Employers who acknowledge the fact that they violated the law and try to work toward a reasonable resolution are able to get lawsuits against them settled.  Employers who refuse to acknowledge their mistake or wrongdoing, unnecessarily extend the lawsuit and drive up litigation costs, and proceed to trial on a case in which they have no valid defense have to (and, rightfully should) pay for their actions.

Wage Theft Occurs Every Day

            Contrary to what Mr. Hyman asserts in his article, there are countless instances of “wage theft” occurring in this country every day, and good lawyers file lawsuits in these matters daily.  Wage theft occurs every day in this country: 

• Employers who require employees to work “off-the-clock” by working through lunch, clocking in late or clocking out early and then continuing to work commit wage theft.
• Employers who purposefully misclassify employees as independent contractors or exempt employee commit wage theft.
• Employers who refuse to pay for time spent traveling between job sites during the work day commit wage theft.
• Employers who deduct hours off employees’ time at the end of the week or require employees to pay for walked tabs or cash drawer shortages commit wage theft. 

Employers Who Violate the FLSA Have an Unfair Economic Advantage

            These employers who don’t comply with the FLSA are merely trying to gain an unfair and illegal advantage over their competitors by not playing by the rules. A framer who pays carpenters “straight time” for hours over 40, a drywall contractor who misclassifies hourly workers as independent contractors, and a restaurant owner who pays kitchen cooks on a salary basis, takes part of the waitstaff’s tips and/or requires waitstaff to pay for walked tabs all have one thing in common: In addition to depriving employees of their rightfully earned wages, they are illegally gaining an unfair advantage over their competition.

            While there are some employers who accidentally violate the FLSA, there are innumerable employers who try to gain an unfair advantage over their competition by cutting their labor and tax costs by violating the Fair Labor Standards Act. The ability of the employee’s attorney to recover “reasonable and necessary” attorney’s fees under the FLSA (and the threat to the employer of having to pay such fees) is a vital part of the enforcement mechanism of our wage and hour laws, particularly for those low-wage earners most affected by violations of the law.