A strong, dedicated workforce is the foundation of every successful company’s business model. In today’s difficult economic climate, however, this foundation is being weakened by worker classification challenges that can have devastating effects on a company’s bottom line.
Federal and state agencies, Congress, unions, plaintiffs’ attorneys, and disgruntled employees, acting independently or jointly, have increased their enforcement and organizational efforts, enacted new legislation, pursued class-action litigation, held congressional hearings and even criminalized misclassification, in an effort to change the way companies classify their workers. By understanding the purpose and consequence of these complex challenges, companies can react quickly and effectively to avoid missing crucial opportunities to mitigate, protect, expand or promote their workforce business models.
Not surprisingly, the failure to classify workers properly is significant. Companies pay on average $29.4 million to resolve classification collective actions under the Fair Labor Standards Act and significantly more to resolve state wage and hour class matters. Federal FLSA complaints rose from approximately 2,700 in 2003 to more than 7,300 in 2007. Moreover, the subject of worker classification is likely to take on increased importance under the Obama Administration, given the president has shown an affinity to strengthen employees’ rights, including proposed legislation to repeal certain safe harbor provisions on classification and to impose a penalty on employers who misclassify employees as nonemployees.
The Sutherland Advantage
At Sutherland, our Worker Classification Solutions Group provides clients the advantage of a diverse team of attorneys with significant experience across a number of disciplines—from tax and labor law to employment litigation to financial services regulatory experience. Our team works together not only to find creative solutions to stymie attacks on a company’s business model but also to take proactive remedial steps to strengthen the business model, protecting it from potential, or future attacks.
We tap into our attorneys’ experience with this dynamic issue and employ a no-nonsense approach that is concentrated in substantive knowledge of the issues together with industry best practices to address business objectives based on each client’s individualized needs and business objectives. We listen to our clients and we react. Our ability to design and implement sound representation creates real results.
When it comes to worker classification matters, we excel at helping our clients position themselves to attain the desired results for their business. Our lawyers understand how the federal and state agencies work—but, more important, we understand how plaintiffs’ attorneys and disgruntled workers think and which direction the classification issue is headed. Our clients want the edge on the market, and we deliver.
WorkerClassification.com provides daily news updates to help businesses stay abreast of the latest in worker classification issues, Sutherland created its own resource, WorkerClassification.com. This comprehensive, daily resource provides the latest news and developments relating to the classification of workers.
For years, we have closely monitored trends within this arena, capturing information on everything from class action settlements to successful arguments on both sides of the cases. Our analysis allows us to provide sound counsel, solid strategies and creative solutions.
WorkerClassification.com tracks and posts news developments daily. Registered guests can access helpful federal and state resources including articles, recent opinions, government reports, and news about classification task forces. WorkerClassification.com also analyzes trends by discussing classification challenges on an industry-by-industry basis.
© 2013 Sutherland Asbill & Brennan LLP