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With Wage and Hour Lawsuits on the Rise, Smith Moore Leatherwood Attorney Offers Counsel

With Wage and Hour Lawsuits on the Rise, Smith Moore Leatherwood Attorney Offers Counsel

March 16, 2010

Alex Maultsby provides insight into pressing labor issues

GREENSBORO, NC – The past 18 months have proven to be a challenge for most business owners and employees alike. However, as employers look to take advantage of the business opportunities that 2010 offers, issues involving the way that employees are paid that could put a damper on a profitable yearlong outlook.

According to the National Employment Lawyers Association, there has been a 77 percent rise in wage and hour class-action lawsuits over the last six years. Alex Maultsby, a partner and member of Smith Moore Leatherwood LLP's labor and employment practice group in its Greensboro, NC, office, says the increase in lawsuits is due, in part, to the down economy and a lagging job market.

"There are more employees who have been laid-off, or are worried they're going to be laid-off, in the marketplace now than in recent decades," says Maultsby. "Some of those employees are quick to seek legal advice to help their job situation and most problems arise from issues that are overlooked by employers."

In his role as a labor and employment counselor, Maultsby commonly helps employers make decisions about company-wide employment policies and individual employee issues. Maultsby says that as more employers seek to rebuild profitability with the assistance of a reduced workforce, the importance of consistently following and applying wage and hour guidelines increases.

Based on his experience, he says there are four wage and hour compliance areas, regarding exempt/non-exempt status and rules on what counts as time worked for hourly employees, that employers often overlook. According to Maultsby, these are also areas that provide fertile breeding ground for class action lawsuits:

  • Paying a salary to a non-exempt employee who works over forty hours per week. According to Maultsby, employers should audit who is paid a salary and who is paid by the hour. "The rules are complicated, and proper classifications are often surprising. Accepting, or even requesting, the benefits of a salary will not prohibit an employee from claiming overtime later."
  • Failing to pay employees for travel time. Non-exempt employees who travel long distances for work pose issues that vary widely based on the circumstances, as do workers who ride together to job sites. Maultsby advises that employers should pay close attention to any employees who spend time in transportation other than the regular commute to and from home.
  • Requiring employees to prepare to work before pay periods being. "Any activity that is 'integral and indispensable' to an hourly employee's 'first principal activity' is the trigger for when work starts," says Maultsby. The attorney recommends that the details of each person’s job and each individual situation should be analyzed based on their own facts.
  • Allowing employees to work during unpaid breaks. Wal-Mart Stores has paid over $600 million to settle class-action lawsuits that accused the retailer of forcing non-exempt employees to work during break time. Maultsby says that while a culture of hard work in some businesses can lead employees to help out during unpaid breaks, voluntariness does not matter. "If an hourly employee is allowed to work, he or she must be paid, even if the employer prefers that the employee be on break."

More information is available by visiting Smith Moore Leatherwood LLP's labor and employment practice group page, and by following the groups blog at

Donnie Turlington
For Smith Moore Leatherwood LLP
336.275.7000, ext. 23

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