Strategic Considerations

Facing A Wage-Related Lawsuit

The knee-jerk reaction most employers have to wage underpayment lawsuits an employee brings against them is the belief that it is without merit and disloyal. However, the key to determining if this is actually the case lies in a comprehensive examination of actual practices in light of relevant rules and regulations.

The first thing an employer needs to do when defending against claims and lawsuits in New York of this sort is to immediately secure wage payment and timekeeping records and then consult with a professional like myself who can provide insights as to compliance. How vital this is cannot be overstated – I cannot tell you how many times I've been involved in situations where claims are made, and the employer shortly thereafter discarded or destroyed their records. Without records, employers are essentially defenseless. Without proper and contemporaneous records, the law provides that an employee’s estimates of hours and wages, even if wildly wrong, will be the basis to compute underpayments of wages and overtime. The law requires that employers maintain daily records of time worked as well as paystubs showing amounts paid and their basis (e.g. regular rate and overtime). Therefore, safeguarding records pertaining to the time employees worked and payments made must be among an employer’s highest priorities.

Consider this scenario: an employee lodges a wage claim, and as an employer, you possess records that prove timely and accurate payments. Once an employer comes forward with records, the burden of proof shifts to the employee who, to succeed on their claim, must demonstrate the inaccuracy of these records. More often than not, employees lack comprehensive or accurate records to counter a well-documented defense by the employer.

Countless cases show the power of maintaining proper records. The key lies not only in having good records but also in understanding what rules govern record-keeping and ensuring they are properly maintained.

This is where early engagement with my firm or one like it in the employment process yields substantial dividends. Employees assigned to record keeping need to be mindful of applicable rules and understand what information must be accurately recorded. Proactive engagement ensures you lay the foundation of a robust defense, substantially tilting the odds in your favor.

Exploring Alternatives To Trial in Wage-Related Lawsuits And Disputes

Before plunging into a full-blown trial, there are alternative avenues that often prove highly effective in resolving wage-related lawsuits and disputes. One such method is mediation, a process where a neutral third party facilitates negotiations between the conflicting parties. The mediator not only listens to both sides but also oversees a structured negotiation process.

If an agreement seems unlikely, the mediator can offer a recommendation. While it might not be the perfect solution for either party, it is a potential middle ground that both can accept, even if reluctantly. Importantly, if one side accepts the recommendation and the other does not, it will be apparent to the parties who rejected the proposal, which may help you later in litigation process.

Whether to engage in settlement negotiations often boils down to dollars and cents. Trials can be costly, especially when facing a seasoned plaintiff's lawyer well-versed in the nuances of the legal landscape. Thus, the crux of the matter lies in the economics of your situation. If a settlement can be reached without taking on excessive costs, and the financial outlay is significantly less than what a protracted litigation would demand, the smart move is to opt for settlement.

Moving beyond mediation, another approach involves arbitration agreements, a strategy I frequently incorporate into employee policy manuals. The key distinction from mediation lies in the fact that arbitration is a more structured, private process. The arbitrator, akin to a judge, oversees proceedings that are typically faster, less expensive in terms of litigation costs, and, crucially, private. This contrasts with court cases, which are public and subject to disclosure.

In my view, a prudent strategy involves having arbitration agreements in place, either embedded in the employment policy manual or established directly. This not only expedites the resolution of wage claims in a private setting but can bring about a speedy resolution within six months or less – a stark contrast to the often protracted timelines associated with court cases.

Going To Trial

Determining whether to take a wage-related case to trial hinges on various factors, and one significant consideration is the context of class action cases where the stakes are notably high. When the dollar amounts at play soar into the millions and an employer has maintained detailed records, yet the employee persists in making unreasonable demands, opting for trial becomes an obvious choice.

When the magnitude of the case is substantial, and the demands of the employees seem disproportionate to the facts and records, pursuing a trial may be a reasonable course of action. While trials undoubtedly involve time and expenses, the potential benefits – especially in cases of considerable financial stakes and evidentiary strength – may justify the investment and risk. For more information on Defending Against Claims And Lawsuits In New York, an initial consultation is your next best step.