Tag Archives | overtime

Wage and hour laws apply to the rich and famous, too

By on January 6, 2012 in Our Blog

Lady Gaga’s former personal assistant is claiming the megastar owes her hundreds of thousands of dollars in unpaid overtime.  She’s probably right.  In a lawsuit filed in New York last month, Jennifer O’Neill alleged she worked around the clock for Lady Gaga, but was never paid overtime.  The legal question is whether Ms. O’Neill was an exempt employee under the FLSA.  Unless she was able to exercise significant discretion and independent judgment in the performance of her duties, and was paid on a salary basis, she won’t fit into the administrative exemption under the law.  My bets are on Ms. O’Neill, as I’m guessing that working for a diva offers little in the way of independent judgment.

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Holiday wage and hour traps to avoid

By on December 7, 2011 in Our Blog

In addition to cheer and holly, the holiday season is a time for the unwary employer to succumb to wage and hour pitfalls.  Why?  Simply because this is such a busy time of year for many employers.  Retailers earn a huge chunk of annual revenue this time of year.  Other employers need more hands on deck to deal with end-of-the-year administrative issues.  Many employers hire seasonal workers, or simply have existing employees putting in more hours.

When it comes to seasonal hires, employers should not assume they can be classified as “independent contractors” instead of employees.  Most likely, they are employees, plain and simple, despite the fact that they are hired for a short period of time.  Thus, all the attendant minimum wage and overtime rules apply.  To qualify as independent contractors, they would need to satisfy all of the requirements set forth by the Department of Labor.

As for existing(non-exempt) employees, employers need to take extra care to ensure hours are accurately recorded for purposes of overtime pay.  Inaccurate time cards can pose a big problem, especially if the employer has a system that automatically clocks employees out.  So add an extra layer of scrutiny to wage and hour practices this time of year – it’s well worth it.

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Lawsuit in Little Italy

By on December 16, 2010 in Our Blog

La Dolce Vita restaurant in the heart of Cleveland’s Little Italy is facing an FLSA lawsuit.  In particular, Gerti Mehmedi is suing La Dolce Vita (and its owner individually) for an alleged failure to pay overtime wages.  In addition, he is seeking to obtain class action status for other “similarly situated” current and former employees who also worked in excess of forty hours a week without receiving overtime compensation.  Last month, District Court Judge Lesley Wells conditionally certified the class, subject to further discovery.  This was certainly a victory for Mr. Mehmedi (and his lawyer), as class actions are far more cumbersome to deal with than single plaintiff lawsuits.

I take a couple of points away from this case.  First, I find it pretty surprising that there are employers out there not paying overtime, which is the sine qua non of the FLSA.  I suspect that such employers are not reading my blog, but if you know any of them, please tell them non-compliance should no longer be an option.  Second, as Judge Wells’s opinion explains, it’s not that hard to conditionally certify a class action.  This is a pretty scary prospect for employers.  If you have not yet assessed your potential FLSA liability by conducting a wage and hour audit, do it now, before you are faced with a similar fate as La Dolce Vita.

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A looming issue under the FLSA: overtime and technology

By on August 30, 2010 in Our Blog

We all know that non-exempt employees are entitled to overtime pay for hours worked in excess of forty per week.  What about time spent, outside of traditional working hours, responding to work-related issues via email, voicemail, blackberries, iphones, and other PDAs?  This is the issue the Northern District of Illinois will decide in a case filed earlier this year.  In Allen v. City of Chicago, a police officer alleges he is owed overtime pay under the Fair Labor Standards Act for exactly this.  

The court will almost certainly hold that such time constitutes “hours worked” and thus needs to be compensated.  A more interesting question, though, is what the proactive employer should do now.  Under the statute, if an employee claims he worked X hours worth of overtime, it is incumbent upon the employer to disprove the claim or be stuck with the employee’s estimate.  Accordingly, employers should consider ways to accurately track time their employees spend on PDAs and the like.  One simple solution would be to create a form for employees to track their time and have supervisors review and approve it.  In any event, the issue is one employers should be giving some thought to.

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Is your “intern” entitled to minimum wage?

By on May 24, 2010 in Our Blog

As we previously cautioned, unpaid internships can run afoul of the Fair Labor Standards Act, and the Department of Labor is stepping up enforcement efforts as more college grads are offereing their services for free in a tough job market.

The issue is whether the intern should be considered an “employee” under the FLSA and therefore subject to wage and hour laws like overtime and minimum wage. To aid employers in making this determination, the DOL recently issued Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, which sets forth 6 criteria employers must apply to determine whether an intern should in fact by paid as an employee:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you are uncertain as to whether the criteria are met, keep in mind that the DOL defines the employment relationship “broadly.”  

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Gas station attendants strike oil in wage and hour lawsuit

By on April 27, 2010 in Our Blog

The Department of Labor recently obtained nearly $4 million in back wages for gas station employees in New Jersey.  Raceway Petroleum and its individual owner will pay $1.95 million in overtime compensation and $1.95 in liquidated damages to over 700 former and current employees.  The judgment arises from a 2006 class action lawsuit filed by the DOL that alleged the gas station failed to keep accurate time records and failed to pay overtime for obviously non-exempt employees.  Over twenty five current and former employees testified in a three week jury trial.  In addition to its hefty financial obligation, Raceway must also provide extensive training on compliance under the FLSA.

This case highlights several important points for employers.  First, the DOL means business when it comes to FLSA violations.  In the words of Secretary of Labor Hilda Solis, this case “should send the message that the Labor Department will not tolerate employers that do not comply with the law in violation of worker rights.”  Second, it is incumbent on employers to meticulously record hours worked.  The failure to do so can be devastating. At trial, employees testified to working 100 hour weeks, and the employer had no means to disprove the testimony.  Third, personal liability can attach to FLSA violations.  Finally, wage and hour training should be a priority.  Better to do it proactively than to be ordered to do it by a court.  

For more thoughts on the state of wage and hour law and best practices in avoiding liability, take a look at Jon Hyman’s post yesterday on wage and hour audits.

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PDA Use Creates Wage and Hour Issues

By on April 13, 2010 in Our Blog

Do you require or expect your employees to check email after hours or on weekends? If so, you could be liable for violations of the Fair Labor Standards Act’s (FLSA) overtime provisions. While exempt (generally managerial) employees are not entitled to overtime pay, nonexempt employees are, and that includes time spent checking email and voicemail. For example, a nonexempt employee who works a 40-hour workweek and spends an additional eight hours a week reading and replying to work emails is entitled to overtime for those additional eight hours. More employers are requiring employees in nonexempt positions to carry PDAs with the expectation that the employee will respond to pages, emails or calls outside of normal working hours. As a result, the issue is gaining attention from employees, plaintiffs lawyers, and the federal and state agencies that enforce wage and hour laws.

In a recent dispute between ABC News and the Writer’s Guild, three new ABC writers refused to sign ABC’s standard waiver stating that they would not be paid for checking their company-issued Blackberrys while off duty. The issue was resolved when ABC agreed to clarify its waiver to make clear that writers would be paid for any significant work while off duty, but not for merely checking messages. There are other potential solutions available to employers to mitigate the risks, including:

  • Provide PDAs and remote computer access to exempt employees only
  • Require prior written approval for all overtime work
  • Restrict after hour use of PDAs

Importantly, employers should review classifications, especially with respect to those employees required to carry PDAs; and implement policies governing the use of PDAs. Of course, overtime pay is not the only issue created by PDA use. Employers are facing liability as a result of employee texting (and sexting), social media use, driving while texting, and unlawful activities such as online gambling.

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“We will not rest until the (wage and hour) law is followed by every employer”

By on September 9, 2009 in Our Blog

U.S. Secretary of Labor Hilda Solis made this statement last week, in response to a report released September 2, 2009 that revealed, among other things, the wage and hour laws are not protecting many American workers.  Researchers at the National Employment Law Project, UCLA, the University of Illinois – Chicago, Cornell, and Rutgers University surveyed over four thousand workers in low-wage industries in Chicago, L.A. and New York.  The results – reported in the New York Times and blogged about by Jon Hyman last week – were startlingly dismal.  In a nutshell, hordes of workers are not paid minimum wage or overtime, not given legally required meal breaks, and not paid at all for hours worked off-the-clock.

The Department of Labor promised to change these statistics.  ”I am committed to the vigorous enforcement of our laws and will make use of the full weight of my authority to find and prosecute violators,” Solis stated.  To that end, she plans to hire 250 more wage and hour investigators by the end of 2010.

If you have not recently audited your wage and hour practices, there is no time like the present.

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What Should Employers Expect from the Wage and Hour Division?

By on August 25, 2009 in Our Blog

Increased scrutiny of worker classification, overtime pay calculations, family and medical leave practices, and record keeping. Under the new administration, the U.S. Department of Labor’s Wage and Hour Division is expected to receive a substantial increase in funding, which will be used to enhance investigation and enforcement efforts. Particular areas that warrant attention include:

  • Employee classifications (exempt and nonexempt)
  • Payment of minimum wage
  • Overtime pay
  • Payroll deductions
  • Paid and unpaid leave
  • Payment of discharged employees
  • Payroll policies and practices
  • Record keeping  

We believe the time and expense of conducting an annual wage and hour audit is well spent in light of the advantages an audit can provide employers facing an investigation.

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Officers and Managers May Be Personally Liable for Unpaid Wages under FLSA

By on August 13, 2009 in Our Blog

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Officers and managers fall within the FLSA’s definition of “employer” and thus can be personally liable for unpaid wages, says the 9th Circuit Court of Appeals in a recent decision. In Boucher v. Shaw, No. 05-15454 (9th Cir. Jul. 27, 2009), the court held that “the [employer’s] bankruptcy has no effect on the claims against the individual managers at issue here.”  Pointing out that the FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee,”  the court found that the company’s Chief Executive Officer, Chief Financial Officer, and a manager responsible for labor and employment matters could be held independently liable for unpaid wages, even thought the company was dissolved.

What does this mean for employers? Officers and managers must be trained on FLSA issues such as proper classification of employees as exempt or non-exempt, and payment of overtime and minimum wage. We also recommend an annual wage and hour audit to insure compliance with the FLSA and corresponding state laws.

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The Family Friendly Workplace Act of 2009

By on June 24, 2009 in Our Blog

While public employers have long had the option of offering compensatory time off (“comp time”) in lieu of overtime pay under the FLSA, private employers do not currently have such flexibility.  The Family Friendly Workplace Act, introduced by Congresswoman Cathy McMorris Rodgers (R-Washington), seeks to amend the FLSA to afford private employers this same opportunity.  The Act would allow private employers to offer comp time in lieu of overtime, but employees will have the ultimate say-so with respect to whether they take time off or receive extra wages for overtime worked.  Supporters tout the fact that comp time can afford employees greater flexibility in managing their work and home lives, which “is key to to increasing retention as well as attracting great employees that will help increase our country’s competitiveness.”

The Act would require a written agreement between employer and employee concerning the selection of comp time, and employees would always be free to opt for overtime pay instead, even after the hours have been worked.  Employees would be able to accrue up to 160 hours of comp time per year, and employers would have to cash out any accrued but unused comp time at the end of each year.

Having the ability to offer comp time in lieu of overtime will help employers meet changing business needs.  During busy times, payroll costs can remain consistent, and when workload tapers off, staff levels can vary.  At the same time, employees will benefit from increased flexibility in working hours, which, as the bill’s name suggests, can be critically important in juggling demands both at work and outside of work.  Sounds to me like one of those rare win-wins in employment law.

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