Trends in Wage and Hour Settlements: 2015 Update

Tue Jul 14 09:47:20 EDT 2015
By Dr. Stephanie Plancich, Neil Fanaroff, 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 2015 update to NERA's ongoing analysis of settlements in wage and hour cases, Vice President Dr. Stephanie Plancich, and Senior Analyst Janeen McIntosh expand their analysis to add 27 months of data on civil wage and hour settlements, creating a dataset that spans January 2007 to March 2015.

The report finds that wage and hour settlement payments totaled $445 million in 2013, $400 million in 2014, and $39 million through the first three months of 2015, bringing the aggregate amount paid for cases settled since January 2007 to over $3.6 billion. Average settlement values were lower in 2014 than in prior years. On average, companies paid $5.3 million to resolve a case in 2014, lower than the observed average of $6.3 million in 2013 and the overall average of $6.9 million for the 2007 to 2015 period. This pattern has continued into the first quarter of 2015; during this period, average settlement values were down to $2.8 million. Median settlement values have similarly declined. The median settlement value was $3.0 million in 2013, the median was $2.4 million in 2014, and the median was just $1.9 million through the first 3 months of 2015. This is below the overall 2007-2015 median of $2.2 million.