FLSA Minimum Wage, Overtime Lawsuits Set New Record in 2015, Filing Growth Continues

Welcome back!

If you missed them over the holiday week, you will want to check out our series on 2016’s Pay Period Leap Year from last week.  You might need to take some immediate action to get payroll ready for this year.

Now that 2016 has arrived, it is time to look back at the number of cases filed in federal courts during the past calendar year under the Fair Labor Standards Act. Since 1990, the earliest year we have reliable data, until now, that number increases.  2015 continued that trend.

According to figures from PACER, litigants filed a total of 8,954 FLSA cases between January 1, 2015, and December 31, 2015. For comparison purposes, plaintiffs filed 8,086 FLSA cases in 2014. And that is an increase of more than more than 30% since 2011.  The number of cases breached the 8,500 case mark for the first time, and fell just short of 9,000 cases.  For purposes of comparison, PACER reports just 4,021 FLSA cases were filed a decade ago in 2005, the first time the FLSA case load ever reached 4,000 cases in a year. Part of this increase is due in part to plaintiffs, plaintiffs’ attorneys and the government being both more familiar with workers’ rights under the FLSA and more aggressive in asserting those rights.  The DOL Wage and Hour Division filed nearly 130 FLSA cases in federal courts last year, down from 2014. But–as we’ll discuss tomorrow–the DOL collected more money per worker in its enforcement actions (including, but not limited to lawsuits).

Visual learners among our readers can see the sharp growth in FLSA filings over the past 25 years (and particularly since 2002) as FLSA minimum wage and overtime lawsuits have carved out an increasingly large piece of the already crowded federal civil docket.

The chart shows that litigants filed 888 FLSA lawsuits in 1990, according to PACER. The number barely fluctuated over the next 10 years until the numbers began their sharp upward swing. In 2002, following the dot-com implosion and the 9/11 attacks, plaintiffs filed 3,886 FLSA lawsuits, which doubled 2001’s total.  Filings topped 4,000 in 2005 and unevenly continued their rise, jumping again with the onset of the so-called Great Recession.  FLSA lawsuits reached 6,120 in 2009 and 6,786 in 2010. Filings under the FLSA crossed the 7,000 and 7,500 barriers in 2012, and over 7,900 in 2013. In 2014, FLSA lawsuits topped their 2013 all-time high with 8,086 lawsuits, breaching 8,000 for the first time.

Importantly, these statistics do not capture any wage and hour lawsuits based on state law claims or brought in state courts. Anecdotally, we can report that those cases have continued to increase along with FLSA cases.  Adding these claims would make this graph look even more ominous.

The majority of FLSA lawsuits every year focus on uncompensated or miscalculated overtime, uncompensated “off the clock” work, and misclassification of employees. The growth of these lawsuits continues to present challenges to employers, particularly given the FLSA’s 1930s- and 1960s-era statutory and regulatory language that is increasingly ill-suited to 21st century workplaces. With the Obama administration’s decision to have the DOL stop issuing FLSA opinion letters–or really any regular substantive guidance on the FLSA–employers face not only outdated regulatory language, but a lack of insight into how the DOL would enforce the FLSA’s archaic language, leading to potentially lucrative recoveries (for plaintiffs and their attorneys) beyond any actual damages.

The only positive trend here is that while FLSA lawsuits continue to grow, the growth trend continues to level off as the economic and unemployment pictures improve compared to the hangover from the Great Recession period between 2008 and 2012.  We’ll check back on the numbers again midway through 2016 and again in January 2017 and see if the trend continues.