Forensic Accounting Experts Tally Wage and Hour Claims for Class Actions

In-Depth calculations support litigation for plaintiff and defense counsel

In September 2022, the Wage and Hour Division of the U.S. Department of Labor announced it had recovered $230,353 in back wages for 274 workers employed by Black’s Barbecue Inc. The company, operating several popular restaurants in central Texas, had shared employee tips with restaurant managers, a practice prohibited under federal law. The case is emblematic of wage and hour complaints throughout the United States. There is big money to be recovered for workers who have been shortchanged, in violation of the Fair Labor Standards Act. But whether your law firm is prosecuting a claim or defending, you need to produce a calculation gleaned from copious, and often confusing, financial records. Calculating wage and hour losses is a job for experienced forensic accountants. At North American Forensic Accounting, we’re led by forensic accounting experts who are also skilled investigators. We perform detailed examinations of all pertinent records, assembling the evidence plaintiff or defense counsel need to make their case. We also stand by our reports, appearing as expert witnesses to deliver credible testimony.

Common types of wage and hour violations in the United States

The Fair Labor Standards Act is the federal law that governs wage and hour claims. Passed in 1938, this landmark law established the 40-hour work week with mandatory time-and-a-half pay for hours worked beyond that point. The law also set a minimum wage, and many states followed suit, adopting their own, higher minimum wage laws. Wage and hour claims arise when employers fail to pay for overtime, fail to give credit for hours worked, or otherwise deny workers true compensation. The most common types of wage and hour claims occur when:

  • Companies wrongly exempt workers from overtime — Employers are not required to pay overtime to salaried employees, managers, or independent contractors. The law calls these workers “exempt.” However, a company can’t escape its obligation to pay overtime by simply labeling a worker exempt. When companies misclassify workers to avoid paying overtime, they open themselves to liability.
  • Demanding work off-the-clock — Companies that require workers to perform job-related tasks before clocking in or after clocking out may be shorting their pay, including overtime.
  • Violating rest and meal break rights — Under law, workers are entitled to take at least a 10-minute break for every four hours worked. If a company requires its employees to work through their breaks, it must provide them with additional compensation, which can include overtime.
  • Unlawfully sharing employee tips — Employers cannot require its tipped workers to pool and share gratuities with managers or wage workers who are not performing direct customer service.
  • Unpaid training — Employers cannot require workers to undergo training or attend seminars without compensation.
  • Unpaid travel time — Although workers are not entitled to compensation for their commute, they must be paid for required travel from one worksite to another.

When workers allege a violation, attorneys for either side must verify or rebut the charges. NAFA conducts thorough investigations, identifying when any unlawful practice began, how often they occurred, how many workers were affected. We delve into any pertinent facts that might contribute to the amount of liability. NAFA has the knowledge and skill to perform thorough investigations and produce reliable calculations.

Penalties in addition to the wage and hour recoveries

FSLA establishes liability for unpaid wages and overtime. However, the Wage and Hour Division of the Department of Labor can also impose liquidated damages on an offending company. These damages are generally equal to the recovered amount. State law can be more punitive, since many states have passed laws calling for double or treble damages in cases of “willful” violations. Companies may carry Employment Practices Liability Insurance, which generally pays for an investigation and for legal defense. Depending on the coverage, the insurer may also indemnify the company for negligent violations, but usually not the more costly “willful” violations.

The data you need to pursue class action certification

Many wage and hour accusations are not economically viable unless the attorney can secure class action certification. For example, it wouldn’t pay the cost of litigation to pursue a wage and hour complaint at a local restaurant. But if that shop was part of a chain, and the unlawful practices were widespread, a class action could bring justice for hundreds of aggrieved workers. NAFA understands the requirements of class action certification, and we provide the forensic support your law firm needs to press its case.

Contact North American Forensic Accounting for wage and hour claim calculations

As part of our comprehensive litigation support, North American Forensic Accounting calculates wage and hour claims for plaintiff and defense counsel. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment. NAFA serves clients from offices throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area.