Trends in Wage and Hour Settlements: 2013 Update

Wed Nov 20 15:24:38 EST 2013
By Dr. Denise Martin, Dr. Stephanie Plancich, and Janeen McIntosh

Plaintiffs in wage and hour cases typically allege they did not receive full compensation for all time worked. The allegations, which can be brought by current and/or former employees, may include off-the-clock work, unpaid overtime, misclassification, improper calculation of the regular rate, failure to pay minimum wage, and missed, short, or late meal and/or rest breaks.  In this update to NERA's ongoing analysis of settlements in wage and hour cases, Senior Vice President Dr. Denise Martin, Vice President Dr. Stephanie Plancich, and Senior Analyst Janeen McIntosh expand their analysis to include cases settled in 2013.

The report finds that, over the first three quarters of 2013, 51 cases settled for a total of approximately $215 million, suggesting that 2013 is on pace to have fewer cases settled and lower aggregate spending than 2012. If this settlement pattern continues through year end, the authors estimate that 68 cases will have settled for a total of $286 million, compared to 102 cases for $467 million in 2012. Over almost seven years between January 2007 and September 2013, including these newly reported settlements, the authors have identified 497 cases that settled for $2.95 billion.

On average, companies paid approximately $4.5 million to resolve a case in 2013, which is slightly below the average NERA observed in 2012 and right in line with the average in 2011. This 2013 average is still well below the overall average for the 2007 to 2012 period of $7.5 million.