After somewhat of a respite in 2013 with about 525 wage-and-hour cases ending a three-year trend of increases, 2014 saw a resurgence in the case count with 614—just three off the all-time yearly high in 2012, according to Advisen’s Loss Insight database.
W&H experts during a recent Advisen Executive Risk Network on Employment Practice Liability trends said W&H filings continue to grow, but shrinking settlements and the spreading adoption of arbitration clauses and class-action waivers could curtail these claims.
Settlements have declined since 2009, when the top 10 totaled $363.3 million, according to Seyfarth Shaw’s Workplace Class Action Litigation report. Last year, those settlements totaled $215.3 million.
In 2013 and 2014, Advisen Loss Insight database recorded more wage-and-hour class-action lawsuits than any other type of class-action filing.
READ: Smaller Wage & Hour settlements spur coverage for payroll risk by Cate Chapman
Advisen’s version of a loss probably curve shows 50 percent of W&H cases in the database result in losses of at least $200,000. Thirty percent result in a loss of $700,000 and a quarter of all W&H cases show losses of $1 million.
W&H cases touch all industries, with the Services industry leading all others in W&H claims. Still, Wholesale & Retail trade comprises nearly 25 percent of cases and Transportation & Public Utilities, Manufacturing, Mining & Construction and Finance each account for about 10 percent of W&H cases.
LISTEN to the webinar: EPLI Webinar: The Impact of Wage & Hour Claims and Arbitration Clauses
Advisen’s heat map on W&H cases is based on cases per companies in that state. Using this measurement, the top 10 hottest states or regions for W&H claims are Mississippi, West Virginia, Florida, California, Louisiana, District of Columbia, Massachusetts, New York, Nevada, and Hawaii.
The Dept. of Labor is expected to overhaul the Fair Labor Standards Act this summer, updating W&H rules for the first time in decade—a development that is likely to heighten compliance issues for some years to come.
SEE ALSO: Advisen Loss Insight: Wage-and-hour class actions outpace all others
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
