When employers systematically underpay workers through company-wide policies, individual claims may not be practical—but class actions and collective actions allow groups of affected employees to pursue justice together. Wage theft class actions have recovered billions of dollars for workers and forced major employers to change illegal practices.
Individual Claims vs. Class Actions
Individual wage claims work well for employees owed substantial amounts—enough to justify the time and expense of litigation. But many wage violations steal small amounts from many workers. A company might owe each worker $2,000 in unpaid overtime, but when multiplied by thousands of employees, the total theft reaches millions.
Few attorneys will take individual cases worth only a few thousand dollars. Class actions solve this by aggregating claims, making it economically viable to pursue systematic violations that would otherwise go unchallenged.
FLSA Collective Actions
Federal wage claims under the Fair Labor Standards Act proceed as collective actions rather than traditional class actions. In collective actions, workers must affirmatively opt in by filing consent forms. Only those who join the lawsuit receive any recovery.
Collective actions have advantages and disadvantages. Because workers must take action to join, participation rates are lower than in traditional class actions. However, courts more readily certify collective actions because they don't require the strict commonality requirements of class actions.
State Law Class Actions
State wage claims often allow traditional class actions under Rule 23 procedures. In class actions, all affected workers are automatically included unless they opt out. This typically results in larger classes and bigger total recoveries.
Certification requirements are stricter—plaintiffs must show that common questions predominate, class treatment is superior to individual suits, and the named plaintiffs are adequate representatives. Many wage cases proceed under both federal collective action and state class action frameworks.
Common Class Action Wage Violations
Misclassification cases challenge employers who wrongly classify entire job categories as exempt from overtime or as independent contractors. When a company misclassifies all "assistant managers" or all "delivery drivers," class treatment is appropriate because the same policy affects everyone.
Off-the-clock work classes form when employers have policies—written or unwritten—requiring work before clocking in or after clocking out. Common examples include retail workers required to submit to security checks after clocking out, or healthcare workers expected to complete charting after shifts.
Meal and rest break classes challenge automatic deductions for breaks workers couldn't actually take, or policies preventing workers from taking required breaks.
Tip pooling classes address illegal tip sharing arrangements affecting all tipped employees at a restaurant or chain.
The Certification Process
Before a class action proceeds, the court must certify the class—a determination that the case is appropriate for group treatment. Certification battles are often the most contested phase of class litigation. Employers fight hard against certification because it dramatically increases their exposure.
Plaintiffs must show that common issues predominate over individual ones. Employers argue that variations in workers' circumstances make class treatment inappropriate. Courts examine whether the key questions—was the classification legal, did the policy violate wage laws—can be answered the same way for everyone.
Settlements and Recoveries
Most wage class actions settle rather than going to trial. Settlements must be approved by courts to ensure they're fair to class members. Factors courts consider include the strength of plaintiffs' case, the risks of continued litigation, and the settlement's reasonableness compared to potential trial recovery.
Class members typically receive payments based on their individual damages—often calculated using payroll records showing hours worked and wages paid. Notice goes to all class members explaining the settlement and their rights to object or opt out.
Role of Named Plaintiffs
Class actions require named plaintiffs who represent the class. These individuals' claims are examined closely, and they may face discovery and depositions. Named plaintiffs receive incentive awards—typically $5,000-$25,000—for their service to the class.
Being a named plaintiff involves more work and exposure than being a class member, but it's essential to making class actions possible.
Attorney's Fees
Class action attorneys work on contingency, receiving a percentage of the recovery—typically 25-33%. Courts must approve attorney fees in class settlements. While fees in major cases can be substantial, they enable litigation that would otherwise be impossible.
Getting Legal Help
If you believe your employer has policies that violate wage laws affecting many workers, contact an employment attorney experienced in class litigation. Identifying systematic violations early helps build stronger cases. Many firms offer free consultations to evaluate potential class claims.