In February, I wrote that overtime lawsuits by appraisers present a genuine risk to many appraisal firms and AMCs. In that article, I explained some of the special issues relating to whether appraisers properly can be treated as "exempt" employees for purposes of overtime compensation. The real-world risk to an appraisal firm or AMC is that a staff appraiser will file a legal action alleging that he or she worked more than 40 hours in a workweek, perhaps for a period of years, and will demand the unpaid overtime due plus penalty damages, interest and attorneys' fees. For larger firms, there is also the threat of a collective action under the Fair Labor Standards Act (FLSA) -- the overtime equivalent of a class action. Such actions could be filed either by employee-staff appraisers or potentially by appraisers who contend they were misclassified as independent contractors (i.e., "1099" contractors).
It looks now like we are seeing a small wave of overtime litigation in the valuation industry.
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