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National Restaurant Association - FLSA lawsuits reach record numbers

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FLSA lawsuits reach record numbers

More than 7,000 wage-and-hour lawsuits were filed in federal courts during the year that ended March 31 -- a record high, according to a national law firm's analysis of court data from the Federal Judicial Center.

Employment-law firm Seyfarth Shaw analyzed data from the Federal Judicial Center and said the total number of Fair Labor Standards Act cases during the year ending March 31 -- 7,064 -- exceeded the 7,006 lawsuits filed for the same period in 2011.

The recent activity represents a huge jump over the roughly 1,500 FLSA suits filed in the 1993 reporting year, said the law firm.

Richard Alfred, the Seyfarth Shaw partner who chairs the firm's wage-and-hour litigation practices, said in a statement that the data show FLSA claims "continue to be a major, growing threat to U.S. employers." He said a number of factors are contributing to the increase, including a weak economy that has led to more layoffs.

The restaurant industry -- classified by the Labor Department's Wage and Hour Division as a "high-risk industry" for FLSA violations -- has come under increasing scrutiny.

The Wage and Hour Division reported earlier this year that it collected more than $225 million in back wages for FLSA violations in all industries for fiscal year 2011, the most the division has collected in a single year. Restaurants represented about 10 percent of those back wages, a DOL spokesperson told the National Restaurant Association.

According to the DOL, top restaurant wage-and-hour violations include employers paying cash wages "off the books" rather than maintaining legally required employment records; paying employees a fixed salary for all hours worked, without regard to the FLSA's minimum wage and overtime requirements; falsifying employees' time and payroll records; failing to pay the required minimum wage for all hours worked; failing to calculate overtime for tipped employees at the proper rate; and making deductions for uniforms, breakages and customer walk-outs that result in employees being paid below the required minimum wage.

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