Wage and hour violations are among the most common reasons businesses face lawsuits from former (or current) employees. If a wage and hour lawsuit is successful, it can not only cost the business a significant amount of money but also a lot of public goodwill.
Businesses should be aware of some of the possible reasons for wage and hour lawsuits. Here are three of the biggest reasons that these claims erupt:
1. Unclear contract terms
An employee contract should have clear language that details how many hours an employee is expected to work and how much they earn. This contract can include overtime pay qualifications, break conditions and employee classification. Likewise, an employee contract should outline bonuses and raises an employee earns. If a contract is not clear, an employee may believe they are owed additional pay.
2. Messy record keeping
Good bookkeeping is essential to avoid conflicts. Missing or inaccurate records of an employee’s time can lead to mistakes that compound over time. Sloppy records can also lead to a significant defeat if the case ends up in court and the employee is shortchanged of their rightful due.
3. Delayed wage corrections
An employee may reach out to a manager or human resources to address a potential wage issue. If the issue is not investigated and corrected, an employee may take steps to file a lawsuit. Addressing the issue early and keeping the employee informed can help prevent an employee from filing a lawsuit.
Businesses can take steps to reduce the risk of wage and hour lawsuits. Professional legal guidance can help businesses preemptively address some of the problems that lead to the worst conflicts with their employees.