A single worker's unpaid-overtime claim can be worth a few hundred dollars, which is why federal law built two mechanisms for workers to band together: the collective action under the Fair Labor Standards Act and the class action under Rule 23 of the Federal Rules of Civil Procedure. Roughly 5,000 to 6,000 FLSA cases have been filed in federal court each year since 2020, according to case-filing statistics from the federal judiciary, and a large share seek collective treatment. The two devices look similar and work differently at every step that matters.
This article explains the system. It is not legal advice; deadlines and choices in a live case require a lawyer who has read the actual complaint.
What is the difference between a collective action and a class action?
A collective action, created by Section 16(b) of the FLSA, is opt-in: similarly situated workers must affirmatively join in writing to be bound and to share in any recovery. A Rule 23 class action is opt-out: everyone who fits the court's definition is included unless they actively exclude themselves. The FLSA device covers federal wage-and-hour claims; Rule 23 covers state wage claims, discrimination claims, and anything else where the rules' prerequisites are met. Many wage lawsuits run both tracks at once.
How does a case get started?
One named plaintiff files a complaint in federal court alleging a systemic practice — say, off-the-clock work or a miscalculated regular rate. The plaintiff then moves for court-authorized notice to potential members. Nothing goes out to other workers before the court decides the motion; under the Supreme Court's 2012 decision in Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66 (2012), courts have shaped the notice stage around the standard the case will later face.
What does 'similarly situated' mean in an FLSA collective?
The statute does not define the phrase; courts of appeals supply the working tests. Many use a two-stage approach: a lenient showing at the notice stage — a common policy or plan allegedly violating the law, plus a handful of affidavits — then a stricter review after discovery, when the defendant can ask to decertify the collective. Under the second stage, claims of workers whose situations differ materially get carved out. The standard varies by circuit, which is one reason the same practices produce different results in different regions.
How does a Rule 23 class get certified?
Rule 23 requires numerosity, commonality, typicality, and adequacy of representation, and for money-damages classes predominance and superiority as well. The Supreme Court's Wal-Mart Stores, Inc. v. Dukes decision, 564 U.S. 338 (2011), raised the bar by requiring that common questions actually drive the resolution of the case. Certification is decided by the judge, is not a ruling on the merits, and can be revisited. A certified wage class usually blends FLSA opt-ins with state-law opt-out claims in the same complaint.
Who pays the notice, and what does notice say?
Court-authorized notice is sent at the plaintiff's direction, with costs borne by the plaintiff unless the court orders otherwise. The notice must state the claims, the period covered, how to join or opt out, and the effect of doing nothing — nothing, in a collective; automatic inclusion, in a class. Courts approve the exact form. The FLSA's opt-in structure means notice is the whole ballgame: a worker who never sees it never recovers.
What is a settlement like in a wage case?
FLSA settlements require court approval of the reasonableness of both the settlement and any attorney's fee; the Department of Labor's regulations and the courts share oversight. Rule 23 settlements add a fairness hearing, class-member objections, and judicial findings that the deal is fair, adequate, and reasonable. Funds are distributed through administrators, who report claims rates and payments to the court — dockets that are public.
Can arbitration or an opt-out clause defeat a wage class?
It can defeat the class, though not the individual claim. Since AT&T Mobility LLC v. Concepcion, 563 U.S. 921 (2011), the Federal Arbitration Act preempts state rules that block class-action waivers, and Epic Systems Corp. v. Lewis, 585 U.S. 855 (2018), held that employers may require individual arbitration of such claims even for FLSA collective rights. A worker subject to a valid agreement generally pursues wages alone, in arbitration.
Why does the two-track system exist at all?
History. The FLSA's collective mechanism dates to the 1947 Portal-to-Portal Act amendments, written when Congress wanted collective wage enforcement but distrusted binding absent workers to judgments without their consent — hence the opt-in. Rule 23's modern opt-out class dates to 1966, built for civil procedure generally. The two devices have coexisted awkwardly ever since, and wage complaints routinely plead both: the FLSA count for federal overtime, state-law counts certified under Rule 23 for the same paycheck practices. The duplication is not drafting excess; it is the only way to reach both federal and state remedies at once.
How do the two tracks end differently for a member of the group?
The exits differ. In a collective, a worker who joined shares in a court-approved settlement only as to the FLSA claims, and administrative costs and fees come off the top under the court's order. In a Rule 23 class, members typically must submit a claim form to be paid even though they never opted out, and unclaimed funds revert under the parties' agreement or the court's order. Judgment risk differs too: a losing collective leaves each opt-in exposed only within the FLSA's own limits, while a certified class can carry the full range of state-law damages the complaint pleaded.
What should a worker who receives notice understand first?
The deadlines. Joining a collective is a written election with a court-set cutoff; doing nothing in a Rule 23 class keeps a person in unless they opt out by the stated date. Recovery depends on proof of hours and pay, so records — schedules, time entries, pay stubs — carry the case. The papers themselves state the deadlines and the administrator's contact; the system runs on those dates, not on general impressions about the employer.
Related: How an unfair labor practice case moves through the NLRB · How a federal workplace rule gets made: the notice-and-comment pipeline.
For more context, read How an EEOC lawsuit proceeds, from charge to consent decree.
For more context, read How union democracy litigation works under federal law.
For more context, read How an unfair labor practice case moves through the NLRB.