Ensuring Compliance, Protecting Your Business

Stop FLSA Lawsuits Before They Start

Construction companies face their biggest FLSA risk from overtime and misclassification errors — especially when it comes to distinguishing between exempt and non-exempt workers, misclassifying independent contractors, or failing to properly track hours for laborers, drivers, and site support staff.

The Law

The Labor Law Landscape in America

he rules that govern how you pay and manage construction workers are among the strictest in the country. Owners and contractors aren’t just building projects and managing crews — they’re navigating a maze of federal and state labor laws, enforced aggressively by regulators and plaintiff attorneys.

At the federal level, the Fair Labor Standards Act (FLSA) sets the baseline for minimum wage, overtime pay, and recordkeeping requirements. It’s enforced by the Department of Labor (DOL), which has made misclassification, unpaid overtime, and recordkeeping failures top enforcement priorities in construction.

But that’s only the beginning. Construction companies also face:

  • State labor laws that often go beyond federal requirements.

  • Wage & hour collective actions, where one worker’s complaint can quickly grow into a lawsuit involving dozens of employees.

  • Aggressive plaintiff attorneys who target errors in overtime pay, prevailing wage compliance, or misclassifying workers as independent contractors.

  • Regulatory audits and investigations, sometimes triggered by just a single employee complaint or union activity.

The result? A labor law environment where even a small payroll, timekeeping, or classification mistake can lead to six- or seven-figure lawsuits. This isn’t theory — construction companies across the country are being targeted every week for unpaid wages, overtime violations, and worker misclassification claims. Some don’t survive them.

The Problems

Construction Companies Face Rising FLSA Lawsuits

Construction companies are becoming a top target for Fair Labor Standards Act (FLSA) lawsuits. Why? In this industry, the biggest FLSA risks come from worker misclassification and overtime errors — especially when laborers are treated as independent contractors instead of employees, or when hours on the jobsite are not tracked and paid correctly. These issues have fueled costly collective actions against construction owners nationwide.

Worker Misclassification

  • Treating employees as independent contractors to avoid paying overtime, benefits, or payroll taxes.

Unpaid Overtime

  • Failing to pay time-and-a-half for hours worked over 40 in a week, often due to “day rate” or “piece rate” pay structures.

Travel Time Violations

  • Not paying for required travel between job sites or to the first/last worksite of the day.

Prevailing Wage Errors

  • Underpaying workers on government-funded projects by ignoring Davis-Bacon Act requirements.

Recordkeeping Failures

  • Incomplete or inaccurate timesheets, payroll records, or jobsite hours.

Meal and Rest Break Issues

Not tracking or compensating for breaks when required by state law. (varies by state)

Off-the-Clock Work

  • Expecting workers to load/unload, prep equipment, or clean up jobsites outside recorded hours.

Exempt vs. Non-Exempt Errors

  • Misclassifying supervisors, foremen, or administrative staff as “exempt” when they don’t meet the salary or duty tests.

The Real Cost of an FLSA Lawsuit

One lawsuit Can Cost

$40k–$70k+

For construction companies already operating on tight margins, one FLSA lawsuit can wipe out profits—or even shut the doors completely.

Back Pay for Wages and Overtime

If employees are found to have been underpaid, you’ll owe 2–3 years of back wages. For a small staff, this can easily add up to $50,000–$150,000 or more.

Liquidated (Double) Damages

  • In most cases, the court will double the back wages owed, effectively doubling your liability.

    Example: $40,000 in back pay = $80,000 owed.

Attorney’s Fees

  • Often times you’re required to pay the plaintiff’s legal fees if you lose — often another $30,000–$100,000+ on top.

Your Own Legal Defense

  • Even if you win, defending the case can cost $5,000–$50,000+ in attorney’s fees and court costs.

Regulatory Fines & Penalties

  • If the Department of Labor gets involved, expect civil penalties and strict compliance orders.

Ripple Effect of a Collective Action

  • If one worker files under FLSA §216(b), others can join.
  • One worker’s claim can expand into a collective action, where dozens of employees join.

    • A $10k mistake for one worker can quickly balloon into $100k–$500k+.

IT GETS WORSE!

A Collective Action Could Put Your Entire Clinic at Risk

Under the FLSA, lawsuits don’t stop with a single worker.

Here’s how it works:

One Worker Files a Complaint

  • A worker claims they weren’t correctly paid overtime.

The Case Becomes a Collective Action (§216(b))

  • The court allows other current and former workers to join the lawsuit.
  • Lawyers actively solicit your workforce to sign on.

Dozens of Caregivers Join In

  • What started as one worker’s complaint can suddenly include 10, 20, or even 100 of workers.

Your Liability Multiplies Overnight

  • Instead of $5k–$50k for one worker, you’re facing hundreds of thousands — even millions in back pay, damages, and attorney’s fees.

Business-Threatening Outcomes

  • Owners are forced into expensive settlements just to survive.
  • Some clinics lose contracts, face damaged reputations, or even shut down.

FLSA Liability Can Follow You Home

Losing an FLSA case doesn’t just drain your business. Under federal law, owners can be held personally liable for back wages, damages, and attorney’s fees. If your restaurant can’t pay, plaintiffs may pursue your personal assets — including bank accounts, cars, and even property (state protections vary). The risk doesn’t stop at your business. It can follow you home.

The Solution

Our Proven 2-Part Solution

Part 1: Our Patent-Pending Implementation Process

Even the strongest contract can fail if it isn’t implemented correctly. Plaintiff attorneys know this — which is why one of their first moves is to argue that workers never truly agreed to the terms. If the contract is thrown out, you’re left exposed.

That’s why Kubera HR Solutions developed a custom implementation process (Patent Pending) that is not only airtight but also evidence heavy — giving you the documentation you need to prove your agreements are valid and enforceable.

Why Our Process Works

  • Prevents Contract Defenses
    Blocks the most common arguments used to invalidate agreements, such as lack of notice, lack of consent, or unfair surprise.
  • Evidence-Driven
    Every step of the process creates a trail of admissible evidence — proof that your workers received, understood, and accepted the terms. This evidence is what courts look for when deciding whether to enforce a contract.
  • Creates Enforceability
    Agreements rolled out through our process have stood up against legal challenges, making them far more enforceable than standard HR documents.
  • Reduces Risk Without Disruption
    Implementation is quick, seamless, and requires little to no disruption in your day-to-day operations.
  • Backed by Legal Strategy
    Built on the latest case law and Federal Circuit standards, our process gives you a proven advantage if challenged.

Part 2: Our Solution: Alternative Dispute Resolution + Independent Contractor Contracts That Actually Work

We provide Alternative Dispute Resolution (ADR) agreements designed specifically for chiropractic offices. These contracts move disputes out of costly, public lawsuits and into private arbitration — where cases are resolved faster, more affordably, and without the threat of a class action.

We also create independent contractor agreements that hold up under DOL and court scrutiny. Many chiropractic offices use contractors — from massage therapists to marketing staff — but generic agreements often collapse under legal pressure. Ours are carefully drafted to reduce misclassification risk and strengthen your legal position.

The result: A practice that’s shielded from runaway wage & hour lawsuits, equipped with agreements that prevent minor disputes from turning into six- or seven-figure liabilities.

What Makes Our ADR Agreements Different

There are many types of arbitration agreements and/or alternate dispute resolution programs; however, we recommend an arbitration agreement with the following features:

  • A mandatory condition of employment for all current and future
    employees;
  • A mandatory condition of engagement for all current and future
    independent contractors;
    Class action waivers;
    Employer paid filing fees;
    Mandatory compliance with the Federal Rules of Procedure regarding discovery and summary judgment;
  • Mandatory compliance with the Federal Rules of Evidence;
    Mandatory compliance with Federal Rules of Appellate Procedure;
  • A right to arbitration appeal; and
  • A provision providing that the express terms of the arbitration agreement supersede any conflict with the arbitration company’s arbitration rules andprocedures.

What Makes Our Independent Contractor Agreements Different

Class Action Waivers
Protect your agency from collective (class) actions that multiply liability.

Self-Actuating Misclassification Protection
Our agreements automatically address — and reduce — the very factors courts use to determine misclassification.

Behavior Controls for Contractors
Built-in terms that prevent contractors (and their employees) from engaging in practices that trigger misclassification findings.

Mandatory Oversight Requirements
Contractor management is required to oversee compliance with all “misclassification provisions,” reducing hidden liability.

Audit Rights with Remedies
You (or your designee) maintain the right to audit contractor compliance, with remedies for non-compliance.

Defense-Ready Affidavits
Our agreements come with admissible affidavits you can use in defense of:

  • Misclassification claims
  • Wage & Hour collective actions
  • Any administrative or legal Wage & Hour violation

Gentle Compliance Note

Arbitration enforceability can vary by jurisdiction and facts. We’ll tailor your documents and rollout to current rules and coordinate with counsel when appropriate.

The Solution

Discover Our Process

Step 1

Initial Consultation

Step 2

Custom Program Design

Step 3

Implementation & Support

Frequently Asked Questions

We know Clinic owners have a lot on their plate. That’s why we’ve answered the most common questions here—so you can quickly see how arbitration and independent contractor agreements work, why they matter, and how they protect your clinic.

1) What makes construction companies such a big target for FLSA lawsuits?

Because construction often uses independent contractors, day rates, and piece-rate pay, it’s easy for mistakes in classification and overtime calculations to happen. Plaintiff attorneys know this and actively look for cases in the industry.

2) Will this stop every lawsuit?

Nothing can stop anyone from filing—but a strong arbitration agreement with a class/collective waiver typically moves claims out of court and into individual arbitration, dramatically reducing exposure.

3) What’s the most common violation in construction?

The biggest risks are worker misclassification (treating employees as contractors), unpaid overtime, and failing to pay for travel or prep time between jobsites.

4) How much can an FLSA lawsuit cost my company?

Even a small case can cost six figures once back wages, liquidated damages, attorney’s fees, and defense costs are added up. Collective actions with multiple workers can reach millions.

5) Do I really need an ADR agreement for my practice?

Yes. An Alternative Dispute Resolution agreement moves disputes into private arbitration, preventing class actions and lowering legal costs.

6) Can I protect my company from these lawsuits?

Yes. Tools like Alternative Dispute Resolution (ADR) agreements and Independent Contractor (IC) contracts can help keep disputes out of court, lower costs, and limit exposure. Compliance audits and proper recordkeeping are also critical.

7) How do collective actions work in construction?

One employee files a complaint, and the lawsuit “collects” other current and former workers. Suddenly, you’re facing claims from dozens of people—even workers who left years ago.

8) How quickly can these agreements be rolled out?

Most Construction companies can have ADR and IC agreements in place within just a few business days.

9) Will my staff push back against signing?

Our agreements are designed to be fair, enforceable, and legally binding even without a signature — minimizing disruption while maximizing protection.

Secure Your Company’s Future

Schedule a call with Kubera HR Solutions to discuss how our tailored ADR programs can safeguard your construction company from misclassification risks and enhance operational efficiency.