While layoffs are hard on employees and their families, they are also hard on employers, as lawsuits that are brought by former employees rise.
A weekly industry publication, Business Insurance, reports that, “The Department of Labor said there were 40,000 wage-and-hour complaints during fiscal 2010, up about 15% from roughly 35,000 complaints in fiscal 2009.”
The report said the reason is that establishing a class action under the Fair Labor Standards Act has become easy, a weak economy encourages laid-off workers to “go after” their previous employers, and business owners often trip over complex wage rules that vary among the state and federal laws and can be easy to break without knowing.
The article reports that some states that are in need of revenue are seeking out and targeting independent contractors that may have been shorted on their pay. If the contractors have been shorted, so has the state when it comes to receiving payroll taxes.
Experts say that litigation over pay and hours is the most rapidly growing class action claim for these reasons.