FLSA misclassification case pays out $3.15 million

On Behalf of | Nov 16, 2021 | Fair Labor Standards Act (FLSA) |

Misclassification cases frequently spotlight the workers, but employers feel their effects as well. There are many types of employees, from independent Uber drivers to seasonal workers, and many ways for employment law to rule in their favor. That costs employers.

It is in a business’s interest to understand what an employment classification means. Not knowing what that entails, in regards to assigning tasks, may risk hefty fines.

The outward appearance of employees

A recent class-action case, according to PR Newswire, found that the baking company Tastykake shortchanged drivers. The alleged violations claimed a lack of fundamental fairness between employees with benefits and independent contractors who look like employees.

Delivery route drivers working for the company settled for $3.15 million in order to make up for the loss of compensation due to misclassification.

The press release does not clarify what the term “fundamental fairness” entails or how the appearance of working as an employee affected the independently contracted drivers.

Part of the settlement clarifies that Tastykake did not admit to any of the alleged violations.

The contractual reality of employees

This case, under the Fair Labor Standards Action, was about employee misclassification. It highlights the kind of red tape that employers have ahead of them when running a business.

Avoiding this kind of expensive settlement is a matter of vigilance and clear contracts. It is important, then, for a company to have an employment law attorney on its side. With a firm’s resources, a company has the tools to understand the nuances of employee classification and organize a defense in case of a misclassification claim.