Trends in Wage and Hour Settlements: 2012 Update

12 March 2013
Dr. Denise Martin, Dr. Stephanie Plancich, and Janeen McIntosh

In wage and hour litigation, current and/or former employees allege unpaid work, including unpaid overtime, failure to provide meals and/or rest breaks, and off-the-clock work. Cases may be brought under state law or under the Federal Fair Labor Standards Act. These cases may result in civil settlements or verdicts, as well as in back wages and penalties levied by the Department of Labor. 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 2012.

The authors find that, in 2012, companies continued to pay substantial amounts to settle lawsuits involving allegations of wage and hour violations. They identify total wage and hour settlement payments of $467 million in 2012, bringing the aggregate amount paid over the past six years to approximately $2.7 billion. A relatively steady number of identified cases settled before trial each year, with 102 in 2012 and a total of 446 over the last six years. They also find that more than 50% of the companies with a wage and hour settlement between 2007 and 2012 had also been investigated by the Department of Labor's Wage and Hour Compliance division

On average, companies paid $4.8 million to resolve a case in 2012, up slightly from the $4.6 million observed in 2011, but lower than the overall average of $7.5 million for the 2007 to 2012 period. The median settlement value for 2012 of $1.7 million was also slightly higher than the $1.6 million median in 2011.