Overtime-FLSA.com

Working Families Flexibility Act Not What It Seems

Michael Lore — Thu, 13 Jun 2013 13:19:34 +0000

Despite its name, the Working Families Flexibility Act (H.R. 1406) is an empty promise that offers neither the flexibility nor the support that working families need. If enacted, the bill would amend a 75-year-old law, the Fair Labor Standards Act of 1938 (FLSA), in favor of giving private sector employees who earn hourly wages the option to take comp-time instead of time-and-a-half overtime pay. In other words, the bill claims to give hourly workers more time with their families by allowing them, through an agreement with their employers, to choose paid time off as compensation for working more than 40 hours in a week.

In reality, this partisan legislation would give workers less time, less money, and less flexibility. As mentioned above, it would erode overtime protections guaranteed by the Fair Labor Standards Act and if passed, would mean a pay cut for workers without any guaranteed flexibility or time off to care for themselves or their loved ones. The bill also provides little protection for workers in cases of employer misconduct or bankruptcy.

The so-called “flexibility” provided by this comp time bill is provided by having employees work unpaid overtime and accruing up to 160 hours of compensatory time. To become eligible for comp time, an employee must have worked 1,000 hours continuously for his or her employer in the one-year period before entering into the agreement. Qualified non-exempt employees would get 1.5 hours of time off, in lieu of pay, for each hour worked over 40 hours in a week. This scheme clearly provides employers with a very strong incentive to increase workers’ overtime hours (which may be mandatory overtime that workers can’t refuse without risking their jobs), given that there is no immediate out of pocket cost.

No longer would the employer have to actually pay time-and-a-half for hours worked beyond 40 per week. Instead, these hours would be banked for later use. And who profits from the deposits to this “bank”? Employers do, in the form of what is in reality an interest free loan provided by its employees who work over 40 hours per week. And the dollar amounts at issue are not small. Workers who actually do accrue 160 hours of comp time will effectively have loaned the employer one month of pay and will have no guarantee that they will be able to actually use the banked time off when they really need it. Instead, the employer still maintains complete control over the work schedule and accrued unused overtime pay may just be deferred and paid out 13 months late (12 months plus 31 days).

“We see this as a very dangerous proposal that pretends to be something that will help working families,” according to a recent quote by Vicki Shabo, the Director of Work and Family Programs of the non-partisan National Partnership for Women and Families. “It will take money out of worker’s pockets for overtime pay that they otherwise would have received in wages and instead replace it with possibly an empty promise or a mirage of time that’s out in front of them that they may never be able to take.”

It’s important that we urge our Congressional representatives to reject H.R. 1406 and support real family friendly solutions, such as the Healthy Families Act, as well as expanded access to the Family and Medical Leave Act, paid leave, the Paycheck Fairness Act, and more.

Louisiana Company to Pay Back $2 Million in Overtime Back Wages

Michael Lore — Wed, 12 Jun 2013 16:37:56 +0000

Following an investigation, Hutco, a major staffing agency in Louisiana, must pay back almost $2 million in overtime back wages to 2,267 workers assigned to client worksites throughout Louisiana, Mississippi, and Texas. The investigation found that the company used improper pay and record-keeping methods, resulting in employees being denied the overtime pay they deserve – a direct violation of the Fair Labor Standards Act.

Throughout six branch establishments, Hutco was found to have violated overtime pay laws in all six branches. The company avoided overtime pay by mischaracterizing certain wages as “per diem” payments and excluded these wages when calculating overtime premiums. In other words, employees were denied earned overtime compensation due to the misclassification of the “per diem” payments – which were not really reimbursements, but disguised additional wages that should have been factored into the overtime pay rate calculation. This practice also resulted in more violations, including FLSA record-keeping rules, which prohibits tampering with the accuracy of employees” true wages and actual hours worked.

Hutco is not the first company to run into problems with the manner in which it uses per diem payments. The courts have examined a number of cases on the topic and are on the lookout for so-called per diem payments that look and smell more like ordinary wages and are really just another way of paying compensation. In such situations the courts have recognized that they are “nothing more than a disguised wage.” Legitimate per diem payments are typically related to expenses workers incur for things such as meals, lodging, and travel in order to perform their work. Payments made for this purpose may be excluded from the definition of “wages” and, therefore, the overtime pay calculation.

In addition to paying back wages, the settlement has also required Hutco to commit to future compliance with the law. The agreement includes specific measures to ensure the company is paying their employees according to the law to prevent future violations, including standards to correctly identify and compensate workers who qualify for bona fide per diem payments. These measures will also ensure the company’s employees are being paid accurate overtime. Hutco must also maintain accurate records from here on out, including time and payroll records.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Furthermore, the state has not enacted its own Louisiana State overtime laws, and therefore, employers must go by the rules and regulations set forth by Federal Law – meaning employees are only protected by the federal wage and hour regulations contained in the Fair Labor Standards Act.

If you think you aren’t receiving the Louisiana overtime pay you deserve, it’s important to contact an experienced attorney to get the money that is rightfully yours. Contact the Lore Law Firm today by calling us at 1-866-559-0400 or filling out a free evaluation form.

Colorado Wage Laws More Favorable to Workers, Comparatively

Michael Lore — Fri, 31 May 2013 20:07:00 +0000

Compared to other states, overtime in Colorado may be paid differently, in a way that is more favorable to the worker. Under Colorado state law, workers are entitled to overtime pay not only for hours worked over 40 each week, but also for hours worked over 12 per day or over 12 consecutive hours. This is different from the federal standard of 40 hours per week. The current federal minimum wage is $7.25 per hour; however, the state minimum wage for Colorado is $7.64 per hour.

In simpler terms, employees should be paid time and one-half of the regular pay rate for any work in excess of:

40 hours per workweek
12 hours in one workday
12 consecutive hours, no matter if the work period overlaps into a second day

The employer must pay the employee under whatever method would give the greatest payment of wages. For example, if an employee works three 13-hour days in one week, totaling 39 hours, the employee is not entitled to overtime under the first method because they have not met 40 hours in one workweek. However, because the employee worked more than 12 hours each day, he or she is entitled to three hours of overtime per that specific method.

While Colorado workers receive more favorable overtime pay laws, there are still certain workers who are exempt from the Colorado wage and hour law, meaning their employer is not required to pay them minimum wage or overtime. Typically, the exemptions require an employee to be salaried but each exemption has its own set of requirements.

The following industries are exempt from both minimum wage and overtime pay requirements if all requirements are met: administrative employees, professional employees, executives, computer professionals earning at least $27.63 per hours, and outside sales people who spend at least 80 percent of the workweek engaged in activities directly related to their own outside sales. The following are exempt from only overtime pay requirements but not minimum wage requirements: employees of farm implement retail dealers, salespeople employed by trailer, aircraft, or boat retail dealers, commission salespeople receiving at least 75% of their annual dollar volume from commission, and ski industry employees.

While Colorado offers many favorable benefits to employees, Colorado has had its fair share of pay violations. If you feel you are not receiving the correct minimum or overtime pay in Colorado, it’s important to contact a lawyer experienced in overtime pay law in order to get the pay you deserve.

Oil and Gas Industry compliance with Overtime Wage and Labor Laws – Marcellus Shale Fracking

Michael Lore — Tue, 28 May 2013 17:59:34 +0000

Many employers in the unconventional oil and gas extraction industry have paid employees the same way for years according to what they believe is the industry norm – whether it be day rate, hourly, piece rate or salary. The problem being that they have not paid their non-exempt employees time and a half for the many hours of overtime they work. Instead, they improperly classify workers as exempt from the FLSA and pay the day rate, straight time, salary rate or piece rate to cover all hours worked each week. This triggers a wage and hour violation that results in the substantial underpayment of their workforce. While the industry pay practices may be common, it does not mean they are in compliance with state and federal overtime laws and does not excuse violations.

A case in point involves a Pennsylvania based oil field environmental services company that collected water samples from property owners near oil and gas well drilling sites for the purpose of conducting baseline sampling surveys. An investigation found that the company improperly classified nonexempt employees, such as junior environmental scientists and junior baseline samplers, as exempt from overtime pay, and paid them straight time for all hours worked, rather than time and one-half their regular rates of pay for hours worked in excess of 40 in a workweek. The employees were paid on an hourly basis, but were not paid an overtime premium for field work and were not compensated for hours worked in the office. The company also failed to keep accurate records of hours worked by these employees as required by the overtime pay laws.

The company tried to claim that employees who gathered water samples from their assigned areas were professionally exempt from overtime, but this did not fly because these employees were not required to have advanced knowledge to perform their duties.

For the learned professional employee exemption to apply, the following tests must be met:

The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
The workers main duty has to be work that requires advanced knowledge which is mostly intellectual in nature. It must also require an employee to use discretion and judgment on a routine basis;
The advanced knowledge must come from the field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Long standing pay practices change slowly and the overall awareness of workers’ rights to overtime pay remains relatively low in the oil and gas business. Change is, however, being brought on primarily as the result of investigations and lawsuits initiated by workers who realize they are likely being cheated and decide to take action to correct it. Through these cases, literally hundreds of millions of dollars of unpaid overtime wages are being recovered and put back where they belong – in employees’ pockets. Claims for unpaid overtime can recover not only the unpaid back wages, but an equal amount for “liquidated damages” (i.e. $200 for every $100 of unpaid overtime) plus attorneys’ fees.

There is currently a multiyear enforcement initiative focused on vendors who perform various phases of the oil and gas fracking process on the Marcellus Shale formation located beneath the commonwealth of Pennsylvania and the state of West Virginia. Initiative efforts, in this fast growing industry, seek to inform workers of their rights and ensure FLSA compliance among oil and gas companies and other related businesses, including but not limited to mudlogging, coil tubing, inspection, disposal services, environmental cleanup, surface rentals, solids control, seismic services, tree clearing, quarries, road construction, paving, masonry, haulers of water and stone, and other types of support or ancillary service providers.

California Cracks Down on Worker Misclassification

Michael Lore — Thu, 16 May 2013 19:18:42 +0000

Unfortunately, companies across the country consistently try to find loopholes to avoid paying workers overtime, including the age-old scheme of misclassifying employees as independent contractors. The misclassification as independent contractors is a major problem in California in particular, where it costs workers many millions of dollars in lost overtime pay each year. The practice of misclassification is illegal, and the government is imposing stiff penalties to crack down on employers who misclassify their workers to avoid California overtime pay.

California is known for providing greater protection through state laws than federal wage and labor laws, comparatively. Recently, the legislature enacted the Independent Contractor Misclassification Law, which increases penalties for purposeful misclassification. Prior to this law, willful misclassification cost employers $5,000 per violation. The new law can now cost employers up to $25,000 per misclassification. Additionally, third-party advisors such as accountants or HR professionals who may have had knowledge of the offense can also be held liable. To further discourage illegal classification, any employer who violates this new California law must display notice of the violation on the homepage of their website, which obviously deters potential employees from applying and acts as an impairment to the company’s reputation.

In one recent California case, Otey vs. CrowdFlower, the employer allegedly failed to pay employees the minimum wage as well as misclassified employees as independent contractors to avoid paying overtime. CrowdFlower, a tech company based in the Mission District, not only underpaid workers, but also contends that labor laws don’t apply to this new form of labor, where individuals around the globe complete micro-tasks via web for compensation that can range from conventional currency and airline miles to online gaming points. However, Christopher Otey, a “virtual worker,” filed a lawsuit in federal court saying that CrowdFlower broke the law by paying less than the federal minimum wage of $7.25 an hour and misclassified employees as independent contractors.

So far, 21 states have passed laws to increase penalties against employers who misclassify workers, as well as limit the use of independent contractors. A few highly-populated states that have passed similar laws to California include Florida, Illinois, New York, and Pennsylvania. These states are now targeting specific industries that are susceptible to misclassification, including the oil and gas industry, engineering services, disaster cleanup, IT/technical support, and field service.

If you feel you are a victim of misclassification, it’s important to contact an experienced law firm in order to get the overtime pay that is rightfully yours.

Tankermen & Shore Tankermen – Many Aren’t “Seamen” and are Owed Overtime Pay

Michael Lore — Wed, 08 May 2013 14:06:10 +0000

The Fair Labor Standards Act requires employers to pay overtime to workers for all hours worked over 40 in one workweek. But if the worker falls into an exempt category – for instance, seamen – the employer does not have to pay overtime. Employers often misclassify certain maritime employees as seamen and pay them a day rate with no overtime. This practice is illegal when the worker is not in fact a seaman.

Tankermen, shore tankermen, oil rig workers, shipyard workers, dock workers, and other employees in the maritime industry are misclassified most. While some tankermen do fall under the overtime seaman exemption, a very large number are being improperly lumped into this category and being deprived of their proper overtime pay.

The following are common duties in these professions:

Loading and unloading ships
Monitoring product levels in tanks
Operating cargo pumps
Conducting transfers of liquid cargos
Following all safety, environmental, and barge processes to conduct incident-free transfers
Conducting inspections of barges prior to conducting transfers

If a worker performs some or all of these, there is a good chance he should probably not be classified as a seaman and should receive overtime pay. There are various requirements to become a tankerman, such as having a U.S. Merchant Mariner’s endorsement as a PIC/DL, having a current and valid TWIC, being safety-conscious, perform physically demanding work, being on-call and able to travel, and pass all physical examinations and tests.

The term “seaman” is not defined. To determine if an employee can be qualified as an exempt seaman, courts look at the character of the work performed, not the employee’s job title or where the work is performed. If the work is done primarily as an aid in operating a vessel as a means of transportation, then the employee can be classified as a seaman and is not due overtime. Furthermore, when a worker performs both seaman’s and non-seaman’s work, he is an exempt seaman unless the non-seaman’s work is substantial. Substantial is defined as at least 20%. This means that any worker who spends at least 20% of his working hours doing non-seaman’s work (i.e. activities that require a tankerman’s license) is not a seaman and must be paid overtime.

Under this analysis, barge tenders have been determined to be exempt seamen. Barge workers and those with similar responsibilities of attending to lines and anchors, putting out running and mooring lights, or pumping out bilge water are not required to be paid overtime, although industrial workers on barges are not.

In one case, employees filed a class action lawsuit against SeaRiver Maritime, Inc. alleging that they were improperly classified as exempt seamen, and should therefore recover unpaid overtime wages. The court determined that the employees were not seamen, even though they were part of tugboat crews working on a stationary landing barge. Their primary responsibility was loading and unloading petroleum, and they should have been paid overtime.

The potential recovery in misclassification suits can be significant, especially in class and collective action suits in which the claims of many workers are brought in a single case. In these situations, there is real strength in numbers. Workers who have been improperly classified as seamen can recover up to double their back overtime pay due plus attorney’s fees.

If you are a current or former Tankermen or Shore Tankermen and believe that you may have a claim for unpaid overtime or would like to get more information, please call us at 1-866-559-0400, email us at mmlore@overtime-flsa.com or submit your information using our convenient Case Evaluation Form for a FREE and CONFIDENTIAL review of your circumstances.

California and Other States Take a Hard Line Against Misclassification of Employees as Independent Contractors

Michael Lore — Wed, 24 Apr 2013 16:44:31 +0000

California’s labor and wage laws, along with numerous other states, have taken aim at a major problem that has developed over many years in employment / wage and hour law. In order to avoid paying overtime wages and certain taxes, employers will misclassify employees as independent contractors. This practice is illegal, and states are fighting back against these employers.

In the past two years, 11 different states have passed laws increasing penalties for misclassification or limiting the use of independent contractors. This brings the total to 21 different states that have targeted employee misclassification by statute to protect workers, including five of the six most populous states in the country(California, Florida, Illinois, New York, and Pennsylvania).

California has led the way in fighting misclassification. California has long been known for its wage and labor laws that provide greater protections for workers than federal wage and labor laws. Its legislature recently enacted the Independent Contractor Misclassification Law. This statute increases penalties for willful misclassification from just $5,000 per violation, to as much as $25,000 per violation. Additionally, even third-party advisors, such as accountants or HR professionals, may be held liable. Finally, a violator of this law must prominently display notice of the violation on the home page of its website, an obvious blemish on an employer’s reputation.

States are even targeting specific industries in which workers are more susceptible to misclassification. For instance, Pennsylvania’s Construction Workplace Misclassification Act is directed at workers in the construction industry, where Pennsylvania has determined misclassification is a serious problem that needs specific attention.

Other industries where the misclassification of employees as independent contractors to avoid the payment of overtime pay, benefits and payroll taxes has historically been an issue include:

• Oil and Gas Drilling/Exploration • Engineering Services • Disaster Clean-Up • IT / Technical Support • Field Service

Regardless of whether these laws apply broadly or to an individual industry, states are increasing protection for workers and penalties for employers that violate the law. Workers who have been misclassified as independent contractors – and thus denied overtime pay and minimum wage protections – should contact an experienced wage and hour attorney to find out more about how to recover the back wages they are legally entitled to. If you believe that you may have been misclassified as an independent contractor and are due unpaid overtime, please fill out our Case Evaluation form, and one of our overtime attorneys will help you to evaluate your case.

New York’s Wage Theft Prevention Act (WTPA)

Michael Lore — Wed, 24 Apr 2013 16:36:49 +0000

The New York Wage Theft Prevention Act (“WTPA”) took effect on April 9, 2011. The law’s purpose is to bolster New York’s wage payment laws and stop employers in New York from taking advantage of their workers by depriving them of their hard earned pay. The law creates two requirements for employers – giving employees written notice of wage rates as well as pay stubs.

Written Notice

Employers must give a written notice of wages to each new hire and all employees by February 1 of each year. An additional notice must be given whenever an employee’s wage rate is decreased. The notice must be given in both English and the employee’s primary language. It must also designate a regular payday, how the employee is paid (hourly, salary, etc.), the employee’s rate of pay (including overtime rate), and all relevant contact information for the employer. If the employee makes minimum wage, the notice must also state the permissible deductions from the minimum wage taken by the employer (tips, meals, lodging, etc.).

Employers who fail to give written notice of wages may have to pay damages of $50.00 per week per worker. Thus if an employer with 20 employees fails to give a wage notice for an entire year, it would face potential damages of $52,000 (52 weeks x $50 x 20 workers).

Pay Stubs

Under wage laws, employers must also provide a wage statement – commonly known as a pay stub – to each employee on payday. The pay stub must state all the information included in the written notice plus the pay period, number of hours worked, and calculation for the amount earned.

Employers who do not provide pay stubs may have to pay damages of $100.00 per week per worker. That means that the same employer paying $52,000 for failing to give written notice of wages would have to pay an additional $104,000 if it failed to provide pay stubs.

An individual employee can a file private lawsuit against an employer who fails to give the requisite written notice or pay stub, although recovery is limited to $2,500 in such cases.

Anti-Retalliation

One of the most significant aspects of the WTPA is that it enhances the rules against retaliation by expanding what constitutes retaliation and by allowing greater remedies for employees. Under the WTPA, everyone in the private sector – not just employers – is prohibited from discharging, penalizing, or discriminating against an employee for protected activity. Additionally, threatening to do any of these is illegal. Protected activity includes filing a complaint, testifying in any proceeding, or complaining to the employer, DOL, or Attorney General about a possible violation of the law. As long as the worker has a good faith basis for doing the activity – even if he is wrong in his claims – he is protected from retaliation.

The WTPA imposes significant civil penalties on retaliators at $20,000 per violation. Violators may even face criminal sanctions.

Remedies

The New York Department of Labor (“DOL”) is responsible for enforcing the WTPA. The NY DOL may require an employer to reinstate a wronged employee’s job. Otherwise, the employee may be required to pay the employee’s lost salary or a lump sum.

An employer who does not pay the wages required by law must pay 100% of all withheld wages plus interest as liquidated damages to the employee. Further, 15% more in damages is added if the employer does not pay within 90 days of a NY DOL Order to Comply. This allows for significant recovery for a wronged employee seeking a remedy.

A Pair of $29 Million Settlements in California Wage Cases

Michael Lore — Thu, 18 Apr 2013 14:21:50 +0000

Two recent cases out of California show workers earning substantial victories against employers and the value and importance of class action lawsuits in recovering unpaid wage claims.

First, Ecolab Inc. settled a class action suit based on Ecolab improperly denying overtime pay to hundreds of workers. Employees claimed that Ecolab misclassified around 400 exterminators as exempt from the overtime requirements. As a result of the settlement, the workers will recover their unpaid wages plus interest, and their positions will be reclassified as eligible for overtime.

In the other California case, India’s largest conglomerate agreed to pay nearly $29,750,000 to settle a class action lawsuit. Approximately 13,000 non-U.S. citizen IT workers of Tata in America sued their employer. The lawsuit argues that the company illegally forced the employees to sign over their tax refunds to Tata.

After costs and attorney’s fees, each plaintiff is expected to recover approximately $1,600, combining both the withheld taxes in addition to accrued interest. Individually, this means that suing Tata would not make financial sense; costs of litigation would likely exceed $1,600. Class action litigation allows similarly injured parties, in this case, employees of an employer that improperly took their tax refunds, to bring suit together and make sure that all injured people are justly compensated.

The importance of class and collective action litigation cannot be overstated in the employment context. If the employer is doing something wrong to one worker, it is likely doing the same to others. If employees do nothing, companies will be able to take advantage of them – stealing a few thousand dollars from each individual, which adds up to tens of millions in the aggregate. Therefore, wronged employees should not sit in silence, but rather contact an attorney and seek out other employees similarly wronged by the employer. When dealing with wage and hour claims, there is truly strength in numbers.

Being Paid Straight Time for Overtime is Illegal, and it’s a Growing Problem

Michael Lore — Thu, 11 Apr 2013 15:16:50 +0000

Unfortunately, it’s not at all uncommon for workers to be paid “straight time for overtime” these days. The problem presents itself in a wide array of industries, including: restaurants, oil and gas drilling, medical, CAD design, engineering, and disaster response and recovery.

The overwhelming majority of hourly workers who are being paid the same hourly rate for their overtime hours are being cheated out of their legally mandated overtime premium. This violation is almost always against overtime rules for hourly employees. Below are a few examples in which employees were illegally paid straight time for overtime.

One recent violation in Mount Laurel, NJ saw a landscaper ordered to pay $75,199 in back wages to 37 laborers from Mexico and $13,500 in civil penalties after an investigation by the U.S. Department of Labor’s Wage and Hour Division. Investigators said they found that the company violated the Federal Labor Standards Act (FLSA) when it failed to pay overtime. Instead of rightfully paying time and a half for overtime, the company paid workers at straight-time rates, in cash, for hours worked beyond 40 per week. The employer also cut their wages below the minimum wage of $7.25 per hour and failed to accurately record daily and weekly hours worked.
Another case involved the Los Angeles-area restaurant chain Señor Fish. The chain recently agreed to a settle a FLSA lawsuit with the U.S. Department of Labor due to an investigation that revealed the business paid its employees “straight time” for all hours worked, even if they were on the clock for more than 40 hours per week. Señor Fish paid 74 current and former employees $56,777 in back wages and $33,154 in liquidated damages (penalties).
Yet another case involved employees who were misclassified as independent contractors by their employer in order to avoid paying them overtime. Too often, misclassified employees are deprived of overtime and minimum wages, and they are forced to pay taxes that their employers are legally obligated to pay. The U.S. Labor Department and private overtime claim lawyers are dedicated to ensuring that employees receive the pay and benefits to which they are legally entitled.

If you think that your employer is violating overtime rules and you find yourself being illegally paid straight time for overtime, it’s important to contact our lawyers who are experienced in overtime pay laws to get the money you deserve.