Wage theft settlements by top US companies amount to billions

Dive Brief:

Large U.S. corporations have paid out billions in recent years to resolve claims that they denied workers overtime pay, forced them to work off the clock and engaged in other activities that shortchange them, according to a co-authored report by activist group Good Jobs First and Jobs With Justice Education Fund, a nonprofit.
The report places Bank of America, FedEx, Walmart and others on a list of the companies that have been accused of wage theft, according to data on legal settlements and fines kept by the U.S. Department of Labor (DOL). The five firms that have paid the highest total settlements and fines are Walmart ($1.4 billion); FedEx ($502 million); Bank of America ($381 million); Wells Fargo ($205 million) and JPMorgan Chase ($160 million).
“Our findings make it clear that wage theft goes far beyond sweatshops, fast-food outlets and retailers," Philip Mattera, research director of Good Jobs First and lead author of the report, said in a press release. "It is built into the business model of a substantial portion of Corporate America."

Dive Insight:

The pervasiveness of wage theft allegations at America's largest employers may be eye-opening, but not every claim is necessarily proof of wrongdoing. Many of the corporations paying top dollar to settle cases may consider settling preferable to long, drawn out legal battles.

The lesson for employers is to be stringent about keeping accurate wage and hour records and following overtime rules set by the Fair Labor Standards Act (FLSA); HR may also want to note that those requirements are slated for change as soon as 2019. Meticulously kept records can be an employer's best defense in a lawsuit. Managers and supervisors also must be trained in the law's provisions to avoid noncompliance.

DOL offers not only fact sheets about the FLSA's different exemptions but also has launched a program that allows employers to self-report violations and correct them without incurring additional penalties like liquidated damages (though the program isn't without its concerns).

Some say that one huge risk factor for a wage and hour lawsuit is an outdated payroll system, which is exactly what half of employers in a recent study currently use. Employers that invest in the latest technology and update it periodically could also be lowering their risk for liability in wage and hour disputes.