American employers are refusing to pay overtime at an alarming rate according to new figures that show wage and hour lawsuits have risen 400 percent since 2000. More than 7,000 collective lawsuits were filed in 2011 alone and the targets range from small local companies to goliaths including Wal-Mart and GlaxoSmithKline. These claims suggest that workers are not getting paid fairly whether it be through misclassification or simple neglect.
The problem is growing rampant among major companies as of late:
In early May, to name one recent example, Taco Bell was hit with a lawsuit alleging that employees were often forced to work unpaid hours — just the latest in a series of similar accusations the chain has faced.
Other companies whose workers have accused them of denying proper pay include Starbucks, Wal-Mart, Bank of America, Oracle, IBM, Fremantle Media and the Hooters restaurant chain.
The slow climb out of economic recession has created a workplace culture where workers are demanded to do more for less and refusal to comply (i.e. a desire to abide by labor laws) can mean termination. CNNMoney talks about how this is caused by the legal system’s inability to evolve. Workers have long been unfairly treated but protections are just now catching up to the injustice.
The problem is in no way limited to America. In Canada, similar lawsuits recently hit a snag as a judge threw out a case claiming that the class action did not fairly address everyone’s individual needs:
A Ontario judge has blocked a proposed class-action lawsuit against Canadian Imperial Bank of Commerce that alleged the bank wrongly denied overtime pay to thousands of its employees. But the case is one of several similar lawsuits before the courts.
But the recent ruling from the Ontario Superior Court appears to suggest that overtime lawsuits are facing more scrutiny in Canada. In his ruling late last month, Mr. Justice George Strathy denied a proposed overtime class-action suit against CIBC “certification,” or the green light a class action needs to proceed….
…However, observers say the real ground rules for this kind of case will be laid down in a series of three decisions expected soon from the Ontario Court of Appeal. The province’s top court is weighing the future of another, separate overtime case against CIBC and cases against Bank of Nova Scotia and CN.
Meanwhile, Judge Strathy’s ruling in the latest case, known as Brown v. CIBC, quashes a lawsuit launched on behalf of analysts and investment advisers with the bank and CIBC World Markets who were seeking overtime pay.
The judge’s problem with the case was that the plaintiffs asserted all employees classified as “analysts” or “investment advisers” had been wrongly denied overtime. The judge found that some employees with these job titles are in fact managers and are not entitled to overtime pay. In fact, hundreds of different jobs at CIBC, with different responsibilities, bear the label “analyst.”
“Class members have little in common but their names,” Judge Strathy writes in his ruling. “The key issue of fact – namely, whether or not a person has managerial responsibilities – which is critical to the determination of overtime eligibility, cannot be determined on a common basis.”
A perfect storm of employer wrongdoing and lawyer desire to tap new markets is creating a situation where courts are being flooded with overtime cases. Worker representatives should take some credit, too, for raising awareness about impropriety and giving workers a louder voice in this matter. But it’s a strange kind of silver lining. The awareness is undercut by an administrative/justice system ill-equipped to keep up with the rate at which the law is being broken. It’s a silver lining in need of polish.