As employers prepare to turn the page on 2015, the question lurks: Will the tide of collective actions and other cases filed under the Fair Labor Standards Act show any signs of ebbing in 2016?
Past statistics paint a stark picture. According to records for United States courts, new case filings under the FLSA reached an all-time high in 2015, reaching a whopping 8,731 new cases. Although exact statistics are unavailable, many of these cases are collective actions. This comes on the heels of a previous new high of 8,160 new FLSA cases in 2014, which broke the previous record of 8,152 FLSA cases set just three years ago in 2012. Indeed, the steady march upward becomes even more apparent when looking back at the number of new FLSA cases in each of the prior ten years: 3,904 (2002); 2,751 (2003); 3,617 (2004); 4,039 (2005); 4,207(2006); 7,310 (2007); 5,393 (2008); 6,073 (2009); 6,825 (2010); and 6,335 (2011).
So, will 2016 bring another high water mark for FLSA collective actions? Unfortunately, all signs point to “yes,” and here are five good reasons why:
1. On June 30, 2015, the U.S. Department of Labor unveiled its long-anticipated proposed changes to the “white collar” exemptions to the FLSA’s minimum wage and overtime requirements. The proposed changes will nearly double the minimum salary requirement for satisfying the “white collar” exemption, from $455 per week to $970 per week. The U.S. Department of Labor projects that if its proposed changes are enacted, 4.7 million workers will be affected. This increase in the number of workers affected by changes to the FLSA will result in a significant number of alleged and/or actual violations of the FLSA, and, by extension, an increase in the number of FLSA cases.
2. After being upheld by the U.S. Court of Appeals for the District of Columbia, the U.S. Department of Labor’s “Home Care Rule” came into effect as of October 13, 2015. The Home Care Rule narrows the “companionship services” exemption to the FLSA’s minimum wage and overtime requirements by eliminating the exemption for certain home care workers altogether. The U.S. Department of Labor projects that the Home Care Rule will affect another 2 million workers.
3. The U.S. Department of Labor’s six-part test for determining the lawfulness of unpaid internships under the FLSA continues to receive nationwide attention. Although a pair of helpful decisions have been rendered in the Second and Eleventh Circuits, litigation over this issue will continue to work its way through the federal courts.
4. Attacks against the independent contractor business model of the “on-demand” economy continue to dominate the national headlines. As the nation focuses on “on-demand” darlings such as Uber and Lyft, copycat litigation against other “on-demand” companies will likely proliferate.
5. Federal and state minimum wages, and thus potential damages in FLSA collective actions, are steadily rising. In addition to the raises in the minimum wage seen in approximately 20 states and by federal contractors in 2015, 15 states will see their minimum wage again increased in 2016.
So buckle up and hang tight, 2016 looks to be another bumpy ride.