Byline: BUSINESS AND THE LAW By Andy Lewis For The Register-Guard

While consumer class actions against manufacturers have been around for decades, a new type of class action lawsuit has quickly become popular among plaintiff's attorneys: The wage claim.

In the typical class action

The number of wage and hour lawsuits has quickly surpassed employment discrimination claims under Title VII largely because they are easy to prove, and because so many employers unknowingly violate the complex web of state and federal wage and hour regulations. And a class action wage claim can be one of the most financially devastating lawsuits a company will ever face.

In a recent Pennsylvania case, a jury awarded Wal-Mart employees more than $78 million in unpaid overtime.

That same year Smith Barney settled a California case by paying $98 million to 11,000 stock brokers who claimed they had been improperly classified as exempt.

According to a recent BusinessWeek article, legal experts estimate that U.S. companies pay roughly $1 billion annually to resolve wage and hour claims.

Those claims can be expensive because employees are entitled to recover not only their unpaid wages, but also penalties and attorney's fees. In some cases the penalties alone can exceed several thousand dollars for each violation.

Pool together scores of employees, each of whom did not receive overtime for several years, and the resulting liability can be financially disastrous for a small company.

As one plaintiff's attorney recently told BusinessWeek, "I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that (a wage and hour suit) will."

There are, however, preventive steps an employer can take to minimize the risk that it will ever face a wage claim.

Workforce audits: According to the U.S. Department of Labor, only 15 percent of the workforce is exempt from overtime laws, with most of those workers qualifying under the so-called "white collar" exemptions for administrative, executive and professional employees.

To ensure that you have properly classified exempt employees, conduct a periodic audit of your workforce by evaluating not just employee job descriptions, but the actual duties your exempt employees perform. Better yet, consult with an experienced employment attorney during that audit.

Enforce work rules: The wage and hour laws impose a variety of complex rules for time spent preparing for work, traveling, waiting and training. In addition, the law requires employers to pay employees for all work performed, even if that work was not authorized.

To avoid an obligation to pay wages for work that was not approved, enforce your policy prohibiting unauthorized work, and discipline employees who violate that rule.

Keep records: The law requires employers, rather than employees, to maintain accurate time and payroll records.

As a result, it is the employer's burden in a wage claim to substantiate all hours worked. If the employer cannot do so (either because the time records do not exist or are inaccurate), the employer will lose. To minimize that risk, employers should require employees to complete their time records and submit them regularly, and discipline employees who fail to do so.

Deductions: Under Oregon law, an employer's ability to deduct amounts from wages is severely restricted, and each unlawful deduction is considered a separate violation. Employers should therefore ensure that their payroll administrators understand and follow the rules on deductions and the timing of final paychecks.

And if you ever receive a written demand for unpaid wages, send it to your attorney immediately. Failing to do so could cost you more than you think.

Andy Lewis is a partner in the law firm of Hershner Hunter. He is head of the firm's Labor and Employment Department.