If you are acquiring a Company through purchase and you are not paying close attention to potential Labor issues, you could be creating serious and risky problems for the future. It is extremely important to understand that liability in the context of Labor and Employment related issues are governed by Contract and Common Law Successorship with an overriding theme of "protecting the little guy." This is vastly different from the traditional Corporate Veil Piercing Analysis that exists in traditional Corporate Law.
On August 28, 2018, the Department of Labor, Wage and Hour Division, issued six new opinion letters on issues under the Fair Labor Standards Act and Family Medical Leave Act. They are summarized below:
In October, 2014, the United States Department of Labor issued its fiscal year statistics, covering numerous Fiscal Years, in various areas of its responsibility and enforcement (Fair Labor Standards Act; Child Labor; Family Medical and Leave Act Enforcement). It is very interesting to note that these statistics clearly confirm a major increase in wage and hour activities as conducted by the Department of Labor with increases in both the amount of recovered back wages and the time spent by agents on enforcement. These increased enforcement efforts have reached "record high levels" in 2013-2014 with more than 8,000 Federal Labor Standards Act cases being filed between April 1, 2013 and March 31, 2014, which is a five (5%) percent jump from the previous year. As well, since Fiscal 2000, there has been a 438% increase in federal wage and hour lawsuits. These enforcement and trend statistics are a clear indication to employers that they must use great care and their best practices to ensure compliance with wage and hour laws.
With the fiscal year of the United States Government ending as of September 30, 2013, various government agencies have issued their "Fiscal Year Reports" with regard to what they have been able to accomplish during Fiscal 2013. Two of the most important agencies as far as their effect on business entities are the Equal Employment Opportunity Commission (EEOC) and the United States Department of Labor, Wage and Hour Division (WHD).
As technology improves and more of the workforce becomes conversant with Smart Phones, iPhones, and Touch Pads, the chance of the ever-expanding litigation dealing with Wage and Hour claims becomes greater. In an article that appeared in our June 2011 entitled "A Bridge to Justice - A Bridge Too Far?" the author discussed the unprecedented collaboration between a Federal Government Agency [Department of Labor (DOL) - Wage and Hour Division] and the American Bar Association (ABA) Standing Committee on Lawyer Referrals and Information Systems. That article detailed the fact that the DOL and the ABA had entered into an approved attorney referral system that would allow the DOL to refer cases that they could not handle to "qualified counsel." It is now becoming quite clear that the DOL - Wage and Hour Division is expanding its ability to interface with both employees and the consuming public.