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More companies experiencing legal action after layoffs


A recent Wall Street Journal report relayed that, as more companies have needed to reduce their staff in wake of the recent recession, more frequent legal action has been taken for wage lawsuits.

The Department of Labor relayed that 40,000 wage-and-hour complaints were filed during the 2010 fiscal year, which is 15 percent greater than 2009's total.

Many of these lawsuits are arising because business owners are struggling to comprehend the complex federal and state wage laws, the report states. In addition, because of the weakened economy, those who have been laid off are now more prone to sue their previous employer in hopes of earning more money.

Furthermore, filing for wage lawsuits has become easier, as anyone who had been paid incorrectly can be categorized into this affected group. Thus, more class-action lawsuits have taken place. Experts relay that these lawsuits are the fastest growing types of class action legal recourse taking place currently.

For businesses that need to reduce staff, keeping these facts in mind is important, lest they enter into liability lawsuits without proper business insurance in place. 

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