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Case Note: Local Contractor Shells Out Cash to Settle Wages Class Action SuitPrint PDF
Rockville based contractor, Hann & Hann, will pay $600,000 plus the plaintiffs’ legal fees to settle a wage and overtime based class action suit. As reported in the Washington Post by Rubin Castaneda on January 30, 2010, Hann & Hann agreed to pay overtime plus 50 percent for every employee working with the company who was not paid overtime between May 8, 2006 and May 8, 2008.
There are a couple of very important lessons learned from this case. First, reports describe the 200 plus employees and former employees as almost all Spanish speaking immigrants. This naturally raises questions of whether the contractor was perceived as taking advantage of employees less able to defend themselves. In this case, the employees not only had the Immigrant and Refugee Rights Project at the Washington Lawyers’ Committee for Civil Rights and Urban Affairs on the case, but also the firm of Arnold and Porter, who represented the employees pro bono.
Second, claims by employees for unpaid overtime and wages have been a hot topic over the last several years. Back wages, penalties and attorneys’ fee claims are a big risk in this arena, as is the underlying threat of more involved scrutiny as the weight of the government comes to bear.
- Take employee classification seriously
- Understand that mistakes in classifications can translate to serious damages
- The short term benefit of cutting corners can come at a cost that buries your company
- As a result, handle classifications conservatively and pay out overtime accordingly