New York Employment Lawyer Blog

So you’ve had a great couple holidays and now it is time to get back to work. After Thanksgiving, Christmas and New Years a lot of companies are kicking it into overdrive at the beginning of 2012. With the additional workload, I thought this would be a good time to go over some basic issues dealing with overtime pay in New York.

When it comes to overtime in New York and every other state, there are state and Federal laws in place providing protections for workers that put in more than 40 hours in a given week. The good news is that you get paid time and a half (sometimes more) for your hours worked over 40. The bad news is that if you fall under one of the exemptions, you will work more for the same pay.

Exemptions to overtime pay include: individuals who manage multiple employees, outside sales representatives and professionals such as doctors and lawyers. For those non-exempt employees that do qualify for overtime, it is imperative that you keep track of your time in order to ensure that you are not being cheated out of the money that is owed to you. Some illegal overtime pay situations to look out for include:

• Having to work off the clock: If you are at work and working, then it is always on the clock. Whether this takes the form of reporting less hours than you actually worked or your employer is not giving you your legally mandated meal breaks, there is an issue.

• Improper classification: There are many instances in which an employer will misclassify an employee so that he or she is not eligible for overtime pay. However unless you fall into one of the exemptions then you have a legal right to overtime.

• Mistakes in recording: I use the term “mistake” as a courtesy to employers. In reality, a lot of employers very purposefully mis-enter hours for an employee in order to skimp out on overtime payments. This is why it becomes so important to keep track of your time!

I have only highlighted some general situations to look out for. You have a legal right to get paid appropriately for your time. As a New Year’s resolution to yourself, be sure to check on the points I have highlighted and make sure you are getting the compensation you deserve.

Overtime pay scams are common but the Courts do catch on.   Recently the Second Circuit Court of Appeals acknowledged that time sheet fraud does occur.

Overtime Pay Time Sheet Fraud

Time sheet fraud occurs whenever a company intentionally excludes overtime hours from their time sheets.

One popular technique is to create a Catch-22 situation for employees.    Companies do this by creating two conflicting time sheet policies.   First the company issues a written policy that requires accurate time sheets.  Something like "all hours, including overtime hours, must be recorded on time sheets." This way it looks like the company is trying to keep accurate records.   However, in practice the company follows a different policy.   Employees are told verbally by their supervisors not to record any overtime hours on their time sheets.   So the employees do not record their overtime hours.

When an employees later claims that they were not paid overtime, the company then blames the employee for not keeping accurate records and accuses the employee of making up bogus overtime hours.   The company produces its written policy as proof of its time keeping practices and the employee has no record of their overtime hours.   It can make it tough for employees to recover their overtime pay.

But the Second Circuit Court of Appeals recently recognized this trick in Kuebel v. Black & Decker, decided on May 5, 2011.  Here is what the court said:

"At least where the employee’s falsifications were carried out at the instruction of the employer or the employer’s agents, the employer cannot be exonerated by the fact that the employee physically entered the erroneous hours into the timesheets. As the district court emphasized, Kuebel admits that it was he who falsified his timesheets, notwithstanding [the Companies] official policy requiring accurate recordkeeping. But his testimony — which must be credited at the summary judgement stage — was that he did so because his managers instructed him not to record more than forty hours per week. He specifically testified that at company meetings and during discussions with one of his supervisors, it was conveyed to him that he was not to record overtime no matter how many hours he actually worked. In other words, Kuebel has testified that it was B&D, through its managers, that caused the inaccuracies in his timesheets."

It is good to see that Court's recognize this.   The Second Circuit Court of Appeals is usually very good.   Many courts, however, seem to live in a fantasy world where they believe that companies actually follow their own written policies.  The reality is that company policies are often written by lawyers or human resource drones and these policies are not actually followed on the factory floors.

The Wait A Second blog first reported the Kuebel decision in this post.

There is now an iphone app that lets employees track there own hours and determine the gross wages due, including overtime pay.   This is a great new tool for employees who are being screwed out of overtime pay or wages.   Employees can now easily keep their own records of the time they worked.

It is called the Timesheet App and it was created by the U.S. Department of Labor.  It is free and available in English and Spanish.  The app works on iphones and on the ipod touch.  Employees can now easily prove how much time they worked.  This could prove to be powerful evidence in an overtime pay or wage claim.

Workers who use the app can add comments about their work hours and produce a summary of hours worked in a daily, weekly and monthly format.  Workers can also email the summary of hours and gross pay earned as an attachment.

In overtime pay disputes, employees do not have to rely on their employer's bogus records.   Now employees can keep their own records on the app and these records can prove invaluable in cases where employers do not maintain accurate records.

If are not being paid your full wages or overtime pay, you should use this app to record your hours.   Your employer no doubt will contest your hours and with this app, you will have solid proof.

For more on the app, see the article in the Wall Street Journal.

Call center employees are unquestionably entitled to overtime pay, yet they are among the most stubbornly undercompensated groups of overtime-eligible employees. While many companies have relocated their customer service call centers abroad to India and other countries to avoid minimum wage and overtime laws, many remain in the US and their owners simply flout these laws. Aside from not receiving overtime compensation for hours worked in excess of 40 in a work week, many call center employees are simply not paid for all compensable hours whether they work over 40 hours in a week or not. In fact, call center employees are often not compensated for purported "off the clock" workday activities such as routine bathroom breaks or time spent waiting between customer service inquiries, despite the fact that the Department of Labor considers this time to be compensable.

Overtime pay should not be a concern for mortgage brokers, who have larger problems to deal with. Mortgage defaults are at record rates and the employment picture is particularly bleak in the industry. However, a series of recent rulings have opened the door to overtime eligibility for a broad number of housing/mortgage industry employees, including mortgage underwriters and loan officers. In 2009, the Second Circuit Court of Appeals in Whalen v. J.P. Morgan Chase held that underwriters responsible for approving loans did not engage in exempt administrative work. Earlier, the Department of Labor had reached a similar conclusion with respect to "typical" mortgage loan officers, reasoning that loan officers were primarily engaged in the sale of financial products and therefore protected by federal overtime law. Since much of the industry is misclassified, and since the Department of Labor is actively pursuing employers, employees should be particularly cautious of retaliation should you chose to raise the matter with management.

What is Overtime Pay?

Overtime pay is the compensation paid to an employee for the time worked over 40 hours in a single work week.  For example, if an employee works 50 hours in a week, he should receive overtime pay for those ten extra hours worked in that week.

Are all Hourly Workers Entitled to Overtime Pay?

Hourly workers are typically entitled to overtime pay.  There is one exception for highly paid computer employees, but otherwise most all hourly workers are entitled to overtime pay.

Does New York Law Require Overtime Pay?

Yes, the New York Labor Law requires that all "non-exempt" employees be paid overtime.   If you are not paid overtime, the New York Labor Law provides penalties equal to 100% of the amount due in overtime in addition to legal costs and fees incurred in suing your employer to recover your overtime.  For example, if you are owed $20,000 in unpaid overtime, you are entitled to recover double the amount due ($40,000) plus legal fees and costs.

What is the Hourly Overtime Pay Rate?

Overtime pay must be paid at a rate of one and one-half (1.5) times the regular rate of pay.

For example, an hourly employee who is normally paid $20.00 per hour would earn $30.00 per hour for all overtime hours worked.  Here is the formula:

Regular Hourly Rate x 1.5 = Hourly Overtime Pay Rate

When Should I Get Paid for my Overtime Hours?

Employees who work overtime must be paid at the same time they received their regular pay check.  Overtime must be paid in the same pay cycle as regular pay.    For example, if you are normally paid every other Friday, your overtime pay must be included in your regular paycheck.   If your overtime pay is delayed, the New York Labor code allows for penalties.

What Should I Do if my Employer will Not Pay me for the Overtime Hours I Worked?

You can report your employer to the New York Department of Labor.  They have a task force and they may investigate your employer and order them to pay you.   Or you can find an employment law firm like our firm that specializes in bringing overtime pay cases.   Most of these law firms do not charge their clients until the end of the case and the payment comes from the amount recovered in settlement or verdict.   Please feel free to contact us at 866-571-5010.

If you are employed as an unlicensed Junior, Associate, Senior or Consultant Accountant at one of the large accounting firms, or if you are a junior accountant or accouting clerk in any corporation, your employer may be violating the FLSA and state overtime laws by not paying you time and a half for all hours worked over 40. In Kress et al. v. PricewaterhouseCooper, Judge Karlton in the Eastern District of California preliminarily certified an FLSA collective action comprised of Associate and Senior Accountants who were not licensed as Certified Public Accountants. This fact bodes well for those at other accounting firms who are employed in similar positions and are contemplating bringing suit for unpaid overtime. Also, many large corporations violate the FLSA by employing closely supervised "financial accountants" who are not CPAs, perform mostly clerical accounting, and who earn a salary without eligibility for overtime compensation. These violations are particularly egregious given the long hours these accountants are known to work. Also, since the law is developing in favor of paying these employees overtime, it will be difficult for employers to argue that violations are not willful and therefore subject to additional penalties under the FLSA.

Most companies that offer severance packages are willing to increase the offer to those who ask.  Here are 7 ways to increase your severance package:

1.  Do Not Deal with Human Resources

Human Resources has one goal - to have you exit as efficiently and inexpensively as possible.  The Human Resources Department will tell you that severance packages are non-negotiable and that it is a "take it or leave it deal".  It is far better to deal directly with someone who knows you - your direct boss or even better is someone even higher up the chain of command who will help you.

2.  Get the Company to Agree that they Will Not Contest your Claim for Unemployment Benefits

Unemployment benefits can be a big help when you lose your job.   Most states make unemployment benefits available only to people who were not fired for cause.   Companies frequently contest unemployment claims by former employees because companies ultimately pay more if they have more claims.  If your company offers you a severance agreement, ask them to make it clear that they will not contest your claim for unemployment benefits - few companies deny this request.   It will give you peace of mind.

3.  Try to Stay Employed by the Company as Long as Possible

It is much easier to find a job if you have one.  Do all you can to stay with the company in some capacity so that you can tell job prospects that you are currently employed.  Unemployed people have a much harder time getting a job.   Avoid that.   Be creative - ask to be transferred to any other open position on a temporary basis, ask to be a consultant on open projects you were working on, volunteer, be a freelancer.   We have negotiated arrangements for our clients that allows them to still use company email and company voicemail while they work on projects from home or simply agree to consult as needed.

4. Ask for a Pro Rata Bonus

Many people today get a big part of their compensation in the form of a bonus.  Companies usually do provide bonuses to people who are terminated before the year ends and bonus payments are rarely included in severance agreements.   But if you worked for the company for part of the year, then you should get a pro rata share of your bonus.  For example, if you worked six months of the fiscal year before being terminated, then you should ask the company for 50% of your bonus.   In certain cases, employees are legally entitled to a pro rata share of their bonus, especially if their bonus makes up the bulk of their income.

5.  Ask for Early Vesting of Stock or Options

If you receive stock or options as part of your compensation, they are probably granted to you on a vesting schedule.   If your termination date is close to a vesting date, then ask our employer to accelerate the vesting of those stocks or options.

6.  Extend Your Health Benefits

COBRA payments can be expensive.   Try to stay on the company health plan as long as possible.   If you are offered four months of severance pay, ask to stay on the company health plan for four months as well.   If they deny this request, then ask them to make the first four months of COBRA payments for you.

7.  Ask for More Money

The last and most important thing to do is ask for more severance pay.  If the company has offered you three months of severance pay, ask for six months.  Be prepared to explain why you should get more severance pay.   Point out the results of your work or company loyalty or explain hardships such as kids in college, just bought a house etc.    The point is to just asking often puts more money in your pocket.  Do it politely.

When you need help from an experienced employment law firm, please give The Ottinger Firm, P.C. a call at 866-571-5010.

Overtime pay cases are often brought as class actions.   If you are thinking of bringing an overtime pay class action, you should understand what is involved.  In this post I will explain some of the basics.

Why are Overtime Pay Cases Brought as Class Actions?

Most overtime pay cases are brought as class actions.  Class actions are used in overtime pay cases because each employees case by itself is often too small to justify the expense of a law suit.   By grouping a bunch of people with similar claims together in one case, the value can be substantial and it makes the case economically viable for the law firm.   The law firms typically do not charge their clients for any of the work they do on such a class action.   Instead, the law firms are paid at the end of the case out of the money obtained by settlement or verdict.  The lawyers' fee is usually determined by the judge but the fees typically range from 25% to 33% of the amount recovered.  The overtime pay class actions are beneficial because they provide a way for lawyers to represent large groups of people with common claims without charging them any upfront costs.  Many people with overtime pay issues are unable or unwilling to pay a lawyer by the hour and the contingency class action makes it possible for people to obtain legal services.

What is Needed to Bring an Overtime Pay Class Action?

A class action cannot be filed without a class representative who has a viable claim that is similar to the claims of others working for the same company.  The class representatives are the people who start the case and put their names on the law suit.   In many cases, the class representatives are people who have left the company and therefore are not worried about retaliation.   At the end of the case, the class representatives are often paid a bonus or bounty that can range from $5,000 to $20,000 or more in certain cases but this is just a broad estimate of payments that I have seen - payments can be lower or higher.   The point is that the law rewards people who come forward as class representatives.

How Does an Overtime Pay Class Action Work?

The first step is to file the case as a class action.   Even though the case is filed as a class action, it is not really deemed a class action until it is certified as a class action by the court.   After the case is filed, the lawyers for the employees will try to obtain evidence from the company that can be used to convince the judge that the case should be certified as a class action.   This process is often called pre certification discovery.   The lawyers will want to find out how many people were denied overtime pay, how much overtime pay is owed, what job descriptions were involved and how the employees were organized at the company.   This information is needed to demonstrate that the claims are similar and that it makes sense to group everyone together into one case as a class action.

Once the pre certification information is obtained, the lawyers will then file a motion to have the case certified as a class action.   The company will file a brief arguing against certification.   It is not uncommon for a case to settle before the judge decides the motion because the company does not want the case to be certified as a class action.   If the case does not settle and the judge certifies the case as a class action, the case will then move to the next phase.   During the second phase, the lawyers will be focused on obtaining evidence and figuring out how to bring a large case to trial.   Often creative techniques must be developed to present evidence efficiently.   If the case involves hundreds or thousands of people with very similar claims, some kind of statistical sampling is often used to prove the case and establish the amount that class members lost in unpaid overtime.  Taking class actions to trial is complicated and the various techniques used are far beyond the scope of this post.

How are Overtime Pay Class Actions Resolved?

Overtime pay class actions occasionally go to trial, but most of the time they settle.  Since these cases involve many people and complicated procedural issues, the cases are often resolved with the help of an experience wage and hour mediator.  Mediation is a voluntary process that is nothing more than an assisted negotiation process.   The mediator does not decide the case or even take sides.   The mediator is a neutral and helps the parties find common ground.   Usually the mediation takes place at the mediator's office and the parties are in different rooms and the mediator goes back and forth between the rooms - similar to shuttle diplomacy.   Mediation sessions can take an entire day or more.   I recently had a class action mediation session go from 9 a.m. to 2.a.m. and it took several more days of back and forth phone calls to finally resolve the matter.   But that is typical - the cases are complex with lots of moving parts and people so it takes time and patience to resolve them.

How Long Does it Take for an Overtime Pay Class Action to be Resolved?

Most of the overtime class actions that I have handled have been resolved within a year or two.   A rough average is a year but that can vary.   However, if the case goes to trial, then the case will take much longer.   But once the case is settled between the parties, then the settlement has to be approved by the court and that can take several more months.   Most courts will hold a fairness hearing to make sure that everyone received a fair settlement and then the money has to be divided up and sent to all of the class member.   All of this takes more time.   So it could be 18 months to two years before you receive your unpaid overtime.

If you have questions about an overtime case, please give us a call and we will help evaluate your potential case.   There is no charge or obligation.

Many employees with job titles such as "manager," supervisor," "associate manager," and "assistant manager" are entitled to overtime pay in New York even though they are salaried.   A true manager who actually spends most of his time managing other people is not entitled to overtime pay, but many people with managerial titles spend little to no time engaged in management and those people are entitled to overtime pay.  The key to an employee's right to overtime pay is their job duties - not their job title.  Court's focus on what a person actually does at work - not their title.

Do You Actually Manage other Employees?

The test for overtime pay eligibility is whether or not an employee actually manages other people.  In order to be considered a true manager, two or more full-time employees must report to you for daily oversight of their work and to obtain work assignments.   To be a manager, you would also need to have the power to hire and fire or at least contribute to the decision to hire and fire or to reward or discipline the employees who report to you.

Does Your Employer Dock your Pay if you miss Work?

A genuine salaried manager will be paid in full even if they miss work.   If your employer docks your pay for missed work, then you are not being treated as "salaried" employee and therefore you are entitled to overtime pay.

Are you Paid by the Hour or by Salary?

If you are paid by the hour, then you are entitled to overtime pay no matter what.  Anyone paid by the hour is entitled to overtime pay - it is that simple.  If you are paid by a salary, your right to overtime pay depends on your job duties.

Do You Spend Most of Your Time Performing Management Duties or Doing other Work?

Many people with managerial job titles don't spend much time managing people.   In order to be considered a manager for overtime pay purposes, you must spend at 80% or more of your time working on management duties such as supervising people.  However, if you spend most of your time doing other things such as stocking shelves, preparing food, cleaning, running a cash register or any similar work, then you are entitled to overtime pay.  A common corporate ploy is to give an employee a title such as "assistant manager,"  pay them a salary and have this person work many hours of overtime doing non-managerial work such as filling in for other hourly employees and never pay them any overtime.   Remember - you are entitled to overtime pay unless you spend 80% or more of your time actually managing two or more full time employees.

Duties of an Actual Manager who is Not Entitled to Overtime Pay

A genuine manager who is exempt from overtime pay, should be spending most of their time:

• Directing the daily work of at least two full-time employees
• Determining the work schedules of other employees
• Engaged in the hiring and firing of employees and/or contributing to the decision to reward or discipline employees

If you want to determine if you are entitled to overtime pay, please feel free to contact us and we will go over your job duties with you to help make this determination.   There is no cost or obligation and no credit cards required.

Not everyone is entitled to overtime pay in New York.  There is a notion that certain high level and well paid employees should not be entitled to overtime pay.  In order to effect this goal, the overtime pay laws have carved out certain "exemptions."

The Executive Exemption

In order to fall within the executive exemption, an employee must meet each criterion listed below.  If they do not meet one of the elements, then they are not exempt and they are entitled to overtime pay.

(1) The employee must be paid on a salary basis at a rate not less than $455 per week or $23,660 per year;

(2) The employee’s primary duty must be managing the company or a department or subdivision within the company;

(3) The employee must regularly supervise two or more full-time employees or an equivalent group of part-time employees; and

(4) The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

If an employee meets each of the four elements above, then they fall into the executive exemption and they are not entitled to overtime pay in New York.

To summarize, an employee is not entitled to overtime pay in New York if they are paid a salary of at least $455 per week ($23,660 per year), they manage some part of the business like a department or a store, they supervise at least two full time employees and they can hire and fire people or have input into the process.

Be aware that many companies give employees false titles like "assistant manager" and pay them a salary in order to trick the person out of overtime pay.  Do not be fooled by your job title because titles do not matter.   All that matters are the 4 elements listed above.  If you don't meet each one of those elements, then you are entitled to overtime pay in New York even if you have a manager's title.

If you have any questions about your right to overtime pay, please give us a call for a free consultation.   We have been helping employees in New York for over ten years and we can help you

IT and high tech workers are often entitled to overtime pay, even if they are highly paid salaried employees.  IT employees who provide technical support to the company by repairing, maintaining, installing, moving, and supporting the operation's computer systems have recovered overtime pay.

Job titles at companies vary widely and the title alone does not determine eligibility to overtime pay.  However, people with the following job titles have been awarded overtime pay:

• Network Engineers
• Help Desk Workers
• Systems Analysts
• System Administrators
• Web Administrators
• Business or Systems Consultants
• Database Administrators
• Information Technology Consultants or Specialists

The ultimate decision about an IT workers right to overtime pay comes down to the kind of work that is performed.   IT workers who perform support functions and who are closely supervised, perform routine, repetitive tasks and who are required to follow company procedures and protocols in doing their work are entitled to overtime pay.  These IT workers often perform specific tasks such as updating and installing software and configure settings for existing systems and applications, and maintain, set up, move and otherwise configure computer hardware.

IT workers who typically are not entitled to overtime pay in New York engage in higher level or creative work.  Generally, these IT workers operate independently without close supervision and address new problems each day or design and select new systems. Their work regularly involves designing or creating new systems or applications and they exercise significant independent discretion and have authority to make significant changes to the companies systems.

If you are an IT or high tech worker and have a question about your right to overtime pay, please contact us for a free consultation where we will analyze your position and help you determine if you are entitled to overtime pay.

It is easy to calculate your overtime pay in New York.

First, determine if you're paid by the hour or by salary.

Hourly Employees

1. Determine your overtime pay rate by multiplying your regular hourly pay rate by 1.5.   For example, if you are normally paid $30.00 per hour, multiply this by 1.5.  In this case, the result would be 45 (30 x 1.5 = 45).  This is your overtime pay rate, often referred to as "time-and-a-half."
2. Determine your weekly overtime hours by subtracting 40 from your weekly total.  For example, if you worked 52 hours, you have 12 overtime hours (52 - 40 = 12).
3. Determine your total overtime earnings for the week by multiplying your overtime pay rate by your overtime hours. The calculation in our example is:  12 hours x $45/hour = $540.

Salaried Employees

Many salaried employees are entitled to overtime pay.

Here is how to determine your overtime pay if you are salaried:

1. Determine your weekly salary.  If your salary is annualized, simply divide your annual salary by 52. For example, if your annual salary is $50,000, divide this by 52 (50,000/52 = $961.53 per week).
2. Determine your premium rate.  Your overtime premium rate is the extra amount that is added on to your regular hourly rate.  This is a two step process.  First, determine your regular hourly rate by dividing your weekly salary by the number of hours worked that week.  In our example, the weekly salary is $961.53 and if 50 hours were worked that week, divide 961.53 by 50 (961.53/50 = 19.23).  $19.23 is the regular hourly rate for that week.   Your hourly rate will change each week based on the hours worked.  Second, divide your regular hourly rate in half.  In our example, 19.23/2 = 9.61.  The overtime premium rate in our example is $9.61 per hour.
3. Determine the total overtime pay due for that week by multiplying your overtime premium rate by the number of overtime hours worked.   In our example, 50 hours were worked that week and this means that 10 of those are overtime hours (50 - 40 = 10).   The total overtime pay earned that week is  $96.10 (10 x $9.61 = $96.10).

If you have questions about overtime pay, please give us a call or use our FREE OVERTIME CASE REVIEW.

The Second Circuit is favoring the prompt production of contact information for putative class members in FSLA actions.  First, a little background on how these cases are handled in the Second Circuit.   This summary comes from the excellent three page decision by J. Sand in Whitehorn v. Wolfgang Steakhouse, Inc. 2010 WL 2362981 (S.D.N.Y.)

In the Second Circuit, courts follow a two-stage certification process for collective actions filed under the Fair Labor Standards Act seeking overtime pay, minimum wage payments and related relief.   The first stage is conditional certification and it requires only a "modest factual showing" that the putative class members were victims of a common plan or scheme that violated the FSLA.

If the plaintiff can make this initial showing, the court will conditionally certify the collective action and permit notice to be sent to the putative class members.  The employer can later move to decertify the class if the evidence shows that the claimants are not similarly situated.

In pre-certification discovery, plaintiffs typically seek the names and contact information of the putative class members.   Employers oppose these requests for various reasons.   Some employers argue that releasing the contact information of it's employees will violate the employees' right to privacy, others argue that such information should not be produced until the plaintiff can make a showing that the claims have merit or the existence of similarly situated individuals.  Courts in the past have come to different conclusions with some denying the requests and others granting them.

In Whitehorn v. Wolfgang Steakhouse (June 2010), the court stated that the weight of authority in the Second Circuit requires the prompt disclosure of this information because it will be helpful in defining the class and in establishing that the action should be conditionally certified.  The court also cited cases from other jurisdictions (Texas, Illinois and Kansas) that also require the early release of employee contact information.

This policy is rooted in a USSC decision, Hoffman-La Roche, Inc. v. Sperling, stating that "the broad remedial goal of the FSLA should be enforced to the full extent of its terms"  and pre-certification discovery is appropriate to enable plaintiff to define the class and identify similarly situated employees.   The Whitehorn court noted that early disclosure of employee contact information is needed so that putative class members can opt in early and stop the FSLA's statute of limitations from running - it continues to run until the opt in form is filed by the employee.

Whitehorn is a good case for plaintiffs who want to move quickly and pre-certify the class.   It also makes it clear that last known telephone numbers must be provided.

Yesterday, the Court of Appeals for the D.C. Circuit relied upon the U.S. Supreme Court's Ledbetter decision to reverse a district court's finding that an FSLA overtime claim was time barred.  The court ruled that each faulty pay check amounted to a new violation of the FSLA.

In that case, Figueroa v. District of Columbia Metropolitan Police Department, a group of police officers sued the Metropolitan Police Department (MPD) for unpaid overtime under the FSLA.  The officers argued that they should have been classified as detective sergeants under the District of Columbia Code and paid additional amounts of overtime under the FSLA.

The MPD argued on summary judgment that the overtime suit was time barred because the subject classification decision was made more than three years before the officers filed suit.  The district court agreed and dismissed the officer's case.

The Court of Appeals reversed the trial court citing Ledbetter v. Good Year Tire & Rubber.   Ledbetter held that "it is well established that the statute of limitations for violations of the ... overtime provisions of the FSLA runs anew with each paycheck."  550 U.S. at 641.   The Court of Appeals held that a new separate cause of action accrues ... on the payday for each workweek in which the employee has worked and has not been paid ... overtime compensation.

The Ledbetter decision created controversy when it held that a new Title VII cause of action did not accrue each a time a new discriminatory pay check was issued.   So why did the Ledbetter Court treat FSLA claims differently than Title VII discrimination claims?  The Court explained the distinction between Title VII claims and FSLA claims is that the FSLA does not require proof of specific intent to discriminate while Title VII  does.  A Title VII plaintiff had to prove that each paycheck was issued with specific discriminatory intent and an FSLA overtime plaintiff does not bear this burden.   The Lilly Ledbetter Fair Pay Act subsequently removed this burden for Title VII plaintiffs.

Bottom Line: This opinion simply restates what should already be well known.  The SOL for FSLA overtime claims does not start ticking when the classification decision is made.   Instead a new cause of action accrues with each paycheck.

Champ, that sad looking mascot in the picture is hanging his head for good reason.   He has been putting in 80 hour weeks and not being paid for all that hard work.   He stopped cheering for the team and now is suing them in federal court for overtime pay.

The man inside of that mascot outfit was Brian Bonner.   Bonner claims that he was paid a salary of $22,000 to be the mascot but wound up putting in 80 hour weeks doing random work for the team.  He thinks that he should have been paid overtime for those extra hours of work.

Bonner argues in his suit that the team misclassified him as a "manager" in a bogus attempt to avoid paying him overtime.   If Bonner was a genuine manager, meaning that he actually managed employees, he would not be entitled to overtime pay.  But most real managers do not jump around in furry costumes on baseball fields - so I think Mr. Bonner might have a good case.

But Bonner claims that he was not a manager, instead he was just a mascot who was made to do various random team work when he was not cheering the team on the baseball field.

The Scranton Yankees are going to have an uphill battle convincing a court that their mascot was actually a bone fide manager.   The Yankees most likely are guilty of misclassifying Mr. Bonner as a manager when in reality he was just a mascot who did odd jobs when he was not being a mascot on the field.   Misclassifying employees is a common schemed used by companies around the country to cheat employees out of overtime pay.

In order to determine whether Bonner was legally entitled to overtime pay, the court will apply the "duties" test.   The court will examine Bonners actual job duties to see if he really was a manager.   In order to be a manager, Bonner must have regularly directed the work of two or more other full-time employees and have management as his "primary duty".

But in this case, it is pretty clear that Mr. Bonner's primary duty was being a mascot and not a manager.   But we will have to wait and see what evidence the Scranton Yankees can produce to show that their mascot really is a manager.

I just read a post by Mark Tabakman of the Wage & Hour - Development & Highlights blog. His post criticizes the DOL's plan to increase the enforcement of wage laws. I was surprised that a lawyer would criticize an agency that intended to enforce its laws. That is like criticizing the police department for trying to decrease the crime rate.

The DOL is hiring more investigators and developing a referral network of lawyers who can help the victims of wage theft. These efforts are intended to protect more employees who claim to have been underpaid. But Tabakan says he is amazed that "a government agency, which is supposed to be a neutral ... institution, would actively facilitate employees suing their employers for overtime monies alleged to be due." Maybe Mr. Tabakan missed the fact that the DOL exists in order to enforce these laws and protect employees who lose money due to wage law violations. The DOL is doing its job.

I understand Mr. Tabakan's frustrations though because the DOL used to be a toothless organization that quietly turned a blind eye to the epidemic of wage theft. The Obama administration changed that culture and the DOL is now actively trying to protect employees. Mr. Tabakan and his clients no doubt miss those times when companies could routinely deprive employees of their wages without fear of prosecution.

These laws need to be enforced because they are routinely broken. Recent studies have shown that employees lose billions each year in wage theft. The DOL should not be criticized for trying to help employees, rather this change is long overdue. Millions of employees each year are not properly paid and they need help. In fact, most employees who lose their wages to unscrupulous employers never get any help.

The New York State Legislature just passed the Wage Theft Protection Act and it will become law once Governor Patterson signs the bill. This new law will provide New Yorkers with greater protection from overtime pay and minimum wage violations. Under the Wage Theft Protection Act, an employer can be forced to pay wronged workers twice the amount that was due as well as other penalties and legal fees.

New York is not the only state on the bandwagon against wage piracy. Last summer Illinois passed a similar law and Washington State, Massachusetts and New Mexico have toughened their wage theft laws.

Why are these laws being passed? Why suddenly do politicians care about these long standing employee abuses? The reason is that governments are now strapped for funds and these wage violations also short the government on tax revenues. By forcing companies to pay all that is due to workers they also increase tax revenue.

A recent study has also helped raise awareness. The study showed that each week New York workers lose 18.4 million in unpaid overtime pay and minimum wages or about one billion a year. Worse, the average low wage worker loses $2600 a year in unpaid overtime pay or about 15 percent of their yearly income. Moreover, 75% of those who work overtime are not paid the required overtime pay premium equal to time and a half and 69% of workers don't get meal breaks.

New York's new Wage Theft Protection Act sounds like a good solution but don't be fooled. Remember, laws are just words on the books - they don't really mean anything unless they are vigorously enforced. For example, employment discrimination has been illegal since the 1960's but employment discrimination is still rampant. In my view, the laws need to be dramatically improved in favor of workers so that the unpaid overtime pay is immediately taken from the accused employer and held in trust for the worker until the case is concluded. Companies need to feel the pain immediately. Now, these cases linger for years and the company is allowed to keep the unpaid wages while the case plods on. Worse, the amount owed is usually negotiated down during the process such that the employer often gets off paying less than what was owed and they get to keep the unpaid wages for years. I am glad that NY has passed the Wage Theft Protection Act, but it is not enough.

There is momentum now in Albany to push through a Wage Theft Bill that will protect workers from overtime pay and minimum wage violations. Recent studies reveal that low wage workers in New York are being ripped off. One study showed that over 300,000 people a week are paid less than the minimum wage. Another study showed that workers who earn $20,000 a year lose an average of $3,016.00 in unpaid wages per year. Not only are workers getting hit, but the wave of wage violations deprives New York State of $427.9 million in unpaid premiums for workers compensation, unemployment insurance and taxes.

Both workers and tax payers are losing money because employers are cheating workers out of overtime pay and earned wages with impunity. Employers can afford to ignore the overtime pay and minimum wage laws now because the penalties are so light - it actually makes good business sense to underpay employees and refuse overtime pay premiums.

The new Wage Theft Bill is intended to increase penalties so that employers will be forced to follow the minimum wage and overtime pay laws. For more on this subject see the article in Todays Workplace, Huffington Post.

One common trick used by employers is to misclassify employees as independent contractors and then not pay them overtime, minimum wage or provide benefits. These new law contemplated now in Albany would prohibit these tricks and the fines and penalties hopefully will be tough enough to do the job. We will have to wait and see what the law looks like when it is actually passed.

The Wage & Hour blog by Fox Rothchild recently reported that a New York federal court has given the OK to strippers who filed a class action suit for overtime pay against the Penthouse Executive Club in New York City. The strippers claim that they were not paid the minimum wage and that they were denied overtime pay. The dancers also alleged that the owners illegally skimmed their tips by exacting a 20% "service charge."

The Penthouse Executive Club tried to convince the court that the case should not be certified as a class action because all of the dancers were treated differently. Companies often try to defeat class actions by contending that each employee or claimant has a unique claim and therefore the claims are not "common" enough to warrant class actin status. But in this case, the judge did not buy that argument because he found that all the strippers did the same work, were paid under the same overtime pay procedures and all had their tips skimmed.

So far the dancers case looks promising. They brought their overtime pay and minimum wage claims under the Fair Labor Standards Act and New York State Labor Law. They also seek reimbursement for their "uniforms."

The Wage & Hour Defense Blog recently published a good post that explained why two federal appellate courts reached different conclusions over the exempt status of pharmaceutical sales representatives. David W. Garland, the author of the post, honed in on the one key factor that seemed to make the difference. According to Mr. Garland, the outcome of these cases turns on the amount of discretion that the sales representatives enjoy. If sales representatives are tightly controlled and supervised by management, then they do not exercise sufficient discretion and do not fall within the administrative exemption and must be paid overtime. On the other hand, if the sales representatives are not closely supervised and run their own sales territory on their own, then they are operating independently and do fall within the administrative exemption and are not entitled to overtime pay.

The administrative exemption can be difficult to apply and that is why courts often come out with conflicting decisions. According to the Department of Labor, all of the following tests must be met in order for the administrative exemption to apply:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

This definition is vague and makes it difficult for companies to determine which employees are exempt from overtime pay. This is why pharma sales reps in New Jersey were determined to be exempt from overtime pay, while pharma sales reps across the river in New York are entitled to overtime pay.

A frequent question from clients seeking advice on negotiating severance is whether or not severance payments effect unemployment benefits eligibility. In New York, a claimant is usually eligible for unemployment insurance benefits while receiving severance payments. However, a claimaint will not be eligible for benefits if he or she continues to receive the full salary and exactly the same benefits that he or she received while working, with the understanding that the salary and benefits will stop if he or she becomes employed elsewhere. In other words, the method your employer chooses to pay your severance could impact your eligibility for benefits. If your severance is paid as salary, and if it is subject to forfeiture in the event that you find employment during the severance period, you will not be eligible for unemployment benefits.

A New York City judge has held that two beauty salon workers can sue their employer for retaliating against them after they complained about overtime pay. The Court held that prior rulings to the contrary were wrong. See the article entitled NY Court Permits Retaliation Action Based on Overtime. In a separate federal case back in 2007, Higueros v. New York State Catholic Health Plan, 526 F. Supp. 2d 342 (SDNY), the court expressed the same view that retaliation claims under the NY Labor Code are viable. While it possible that the cases could be reversed, it seems unlikely. I suspect that retaliation claims will be allowed in overtime pay cases in NY. It only makes sense that an employee should be able to sue if they are retaliated against for requesting overtime pay. Moreover, retaliation laws are being strengthened and expanded as the courts see these laws as a vital part of the overall employment law framework.

At our law firm, we frequently talk to employees who are upset because their employers refuse to provide overtime pay. Most everyone we talk to is afraid of retaliation as most people depend on their jobs to survive. They cannot risk getting fired for asking about overtime pay. Fear of retaliation is probably one of the reasons that overtime pay violations are so widespread - people are afraid to complain. Wage violations are so common that the Obama administration has made overtime pay one of its causes and increased the staff at the Department of Labor.

This ruling in NY allowing retaliation claims in overtime cases is long overdue and hopefully the appellate courts will agree.

I

Nursing assistants, licensed practical nurses, janitors and cooks “are particularly vulnerable to wage violations,” said an official for the U.S. Department of Labor. As reported in the NY Times, the U.S. Department of Labor is cracking down on what it perceives as an industry wide practice of wage violations in the health care industry. See the article, Pay Practices in Health Care are Investigated. The article cites several recent settlements such as 1.7M for 4000 health care workers in St. Louis, 2.7M for employees of Partners Health Care System in Boston, and 7.25M for hundreds of registered nurses who worked for Kaiser Permanente in California.

Our law firm just filed a class action against Cigna for its practice of not paying overtime wages to disability clinical case managers. It our contention that these employees are entitled to overtime pay. An article on our case was published yesterday in Law360, a newswire for business lawyers.

The Overtime Adviser Blog issued a good post on computer help desk workers this month. At our law firm, we have a number of cases that concern this issue. Help desk workers are vital to most companies because they keep people working. Because help desk positions are so demanding, many help desk workers put in a lot of overtime. But, many companies do not pay help desk workers overtime pay.

I suspect that part of the problem is the computer employee exemption in the Fair Labor Standards Act. There is wide spread misunderstanding of this exemption. People seem to think that all computer related work is exempt from the overtime pay rules. The reality is that most all computer related work is not exempt - most all computer related work is subject to overtime pay and all of those help desk workers are entitled to overtime pay.

The computer employee exemption is narrow in scope. It only applies to higher level computer employees who design, create, program and engineer software or computer systems. The computer employee exemption, for example, would cover a network engineer who actually designs computer systems but it would not cover an employee who maintains computer systems. The computer employee exemption would cover an employee whose primary duty is to design and create computer programs. The normally day-to-day maintenance, installation and repair of computer systems and software is not covered by the computer employee exemption and that covers most computer works.

The Department of Labor issued a regulation which limits the reach of the computer employee exemption:

The exemption for employees in computer occupations does not
include employees engaged in the manufacture or repair of computer
hardware and related equipment. Employees whose work is highly
dependent upon, or facilitated by, the use of computers and computer
software programs (e.g., engineers, drafters and others skilled in
computer-aided design software), but who are not primarily engaged in
computer systems analysis and programming or other similarly skilled
computer-related occupations identified in Sec. 541.400(b), are also
not exempt computer professionals.

We have a number of cases pending against companies that do not pay their computer and technology employees overtime pay. Some of the companies just do not pay it. Others try to avoid the overtime issue by hiring so called "independent contractors" to do the computer work. True independent contractors are not entitled to overtime pay. But often the independent contract label is inaccurate and the workers are entitled to overtime pay.

If you are one of the thousands of medical case managers, or disability case managers, working for large health plan companies throughout the US, you should keep close tabs on the case of Ruggles v. WellPoint, Inc., No. 08-cv-00201, because the case is likely to have an enormous impact on the industry, your profession and, if the plaintiffs prevail, your own pocketbook. Ruggles and the putative class are seeking to certify a class of misclassified nurse case managers who work in call centers collecting documents and data requested by claims adjusters. According to the Ruggles complaint, the nurse case managers receive a salary and are misclassified as exempt from overtime requirements under federal (FLSA) and NY state law (NYLL).

Often, registered nurses are hired for these positions since their nursing experience is useful for interpretting medical data, but they do not provide "traditional" direct medical services to patients, render an opinion or make any medical diagnosis (which is prohibited by state law). Traditionally, registered nurses qualified for the “learned professional” exemption to FLSA overtime requirements under 29 C.F.R. § 541.301(a). According to the regulations, to qualify for the exemption, an employee’s primary duties must require consistent discretion and judgment. See id. § 541.301 (b). The regulations further state “[r]egistered nurses who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption.” See § 541.301(e)(2). The central inquiry in Ruggles is whether or not nurse case managers who are, for all intents and purposes, not using traditional nurse skills and training still qualify for the exemption. Certain Wage and Hour opinion letters suggest that registered nurses who are not expected to utilize "traditional" nursing skills and instead rely on company manuals to perform administrative services, or who do not need a nursing degree or license to qualify for employment, do not exercise independent judgment and do not qualify for the exemption. Our firm intends to file a complaint next week against one of the largest health care companies in the US seeking to certify a class of disability and medical case management nurses for overtime violations. According to our client, a social work degree and other non-nursing degrees are suitable qualifications for employment as disability or medical case manager. Also, our client was urged by her managers to perform case management services in states other than those she was licensed in as a nurse. If you are in a similar situation, call for a free screening. This appears to be the next big thing in overtime litigation - the big defense firms are already issuing scary "client alerts" to notify (i.e. frighten) potential management clients of the litigation timebomb that awaits them if they don't rapidly retain counsel and reform their policies. This is a telltale sign that a massive wave of litigation is on the horizon.

I was recently reprimanded by my wife for checking my work email at a wedding. She said it was rude and she was right.

As if on cue, my wife, who is also a lawyer and works for a low-tech government office which only allowed for external email four years ago, was issued a blackberry last week by her supervisor. Now she is one of many lawyers carrying two smart phones. My poor manners aside, there are virtually no social limitations on smart phone usage, including usage of smart phones for professional purposes.

Should you be paid for the time spent on your blackberry? Of course. Check out this NPR article on blackberry usage and overtime. Under the FLSA, time spent communicating with your employer or otherwise working on your crackberry is compensable. If you are a non-exempt employee who spends a tremedous amount of time on your blackberry and feels...well...instinctively undercompensated, you're probably right. Don't rest on your hunch, call for a free screening.

I have screened hundreds of overtime cases. In my practice, the following three categories of nonexempt employees under the FLSA are the most blackberry dependent, misclassified and undercompesated (i.e. abused):

1. IT employees, including help desk employees and systems engineers;
2. Pharmaceutical sales representatives;
3. Staffing recruiters (incredibly long hours and hard work - hats off to these employees - case law says you should be getting OT if you aren't involved in project management and post-recruitment supervision).

Smart phones are embedded in the culture. My 3 year old is adept with my iphone; she knows how to find the games she likes and will undoubtedly be asking for one before she is 10. Frightening. There's no turning back. However, you should not let your employer abuse the popularity of these phones by discounting the time you spend on them. Use your blackberry to call for a free screening.

New York pharmaceutical sales representatives won a victory this week in a decision that granted them the right to overtime pay. The sales representatives worked for Novartis and their job was to visit doctors to promote the companies drugs. Novartis did not pay them overtime pay even though the sales representatives worked long hours and sometimes would not return home until 10 p.m. after wining and dining the doctors.

Novartis did not pay them overtime because it relied on the "outside sales" exemption under the Fair Labor Standards Act. Under this law, outside sales representatives are not entitled to overtime pay. The sales representatives succeeded in court by arguing that they were not really sales people because they did not actually sell the drugs, rather they just promoted the drugs. The actual sale of the drugs took place at the drug stores when the patients would pick up their prescriptions. The sales representatives had nothing to do with the actual sale of the drugs because it was illegal for them to sell the drugs themselves. All the Novartis reps could do was visit the doctors and persuade the doctors to prescribe the drugs to their patients.

The court found that the "outside sales" exemption did not apply to the Novartis sales reps because they did not sell anything. Under the FSLA, an outside sales person must actually sell a product or service in order to fall within the exemption. The exemption does not apply to promoters, marketers or other sales support people who do not actually cause the sale to take place.

In this case, the court strictly and narrowly construed the law and limited the scope of the exemption. According to the court, a true outside salesperson has to be more like a door to door salesman who sells the goods himself. A door to door vacuum salesman would qualify as a true outside sales person if he actually produced sales himself by obtaining orders for vacuum cleaners. But if he did not actually solicit and obtain orders and instead just promoted the product and only asked the prospects to consider using his companies vacuum cleaners, then he would not be an outside salesperson. The bottom line here is that overtime pay must be provided to everyone who helps promote or market a product and only people who actually consumate sales are exempt from the overtime pay requirements. For more on this case and access to a copy of the decision, please see the Connecticut Employee Rights Blog.

Many people who are paid on a salary basis believe that they are not entitled to overtime pay. We get calls all the time from workers who assume that overtime pay is not an option since they are on a salary. Salaried employees, however, are presumed to be entitled to overtime pay.

A salaried employee must be paid overtime unless they meet the test for an exempt employee under the Fair Labor Standards Act. The Fair Labor Standards Act is probably one of the most confusing and poorly drafted laws on the books. However, over the years, the courts have courts have carved out certain exemptions. The exemptions exclude certain kinds of jobs from overtime pay. The broad idea is that certain higher level positions are not entitled to overtime pay. Here are the main exemptions:

1. Executive - a person who is employed as an executive is exempt from overtime pay. An executive is generally any person who manages the business or part of the business and who also manages two or more employees, has the power to hire and fire employees and who regularly exercises independent judgment.

2. Administrative - a person who is employed in a higher level administrative position is exempt from overtime pay. This is one of the more challenging exemptions as the definition is vague and tends to change over time. In any event, an administrator is someone who helps run the operation of a business such as an accountant or a human resources director. They have to help keep the business running and they also have to regularly exercise independent judgment and not operate under close supervision or engage in clearly defined tasks or work.

3. Professionals - highly educated types with fancy degrees are exempt from overtime pay. This includes doctors, lawyers, scientists, researchers and the like. They are not entitled to overtime pay.

4. Outside Sales - Salespeople who spend the majority of their time outside of the office visiting clients are exempt from overtime pay.

5. Union Employees - employees who are covered by a valid collective bargaining agreement are exempt from overtime pay.

These are the more common exemptions from overtime pay. Many people who are paid on a salary do not fall into any of the above exemptions and are therefore entitled to overtime pay. If you think that you are entitled to overtime pay, you should call an experienced employment law firm. We would be happy to help. We answer these kinds of questions for free as do many other firms.

In New York, it is assumed that all employees are entitled to overtime pay, even if the employee is paid a salary. It does not matter how a person is paid. There are exceptions, but it is the employers burden to prove that an employee is exempt from overtime pay. In New York, an employee is entitled to overtime pay for each hour worked over 40 in a workweek. An employee must be paid "time and a half" for each hour of overtime worked. "Time and a half" means a 50% increase in pay. For example, if an employee's normal pay rate is $50 an hour, her overtime rate will be $75 an hour. This is a steep increase in pay and this is why many companies try to avoid paying their employees overtime pay.

As mentioned above, some employees are "exempt" from overtime pay. This means they don't get paid an increased rate for overtime. Here is a general summary of the common overtime pay exemptions:

1. Highly Compensated Employees - if an employee earns more than $100,000 a year, then they may be exempt.

2. Managers - employees who manage more than two full time employees and spend most of their time managing these people may be exempt.

3. Professionals - employees with advanced degrees such as doctors, lawyers, and scientists are exempt from overtime pay.

4. Administrators - employees who exercise independent judgment and discretion regarding matters of substantial importance to the employer are exempt. To fit within this exemption, the employee's work must involve running the companies business and not involve producing the goods or services provided by the company. Also, support functions are not exempt. In addition, the employee's work must be free from close supervision, not routine, repetitive, or governed by established procedures.

There are a number of other more specific exemptions, but the four listed above are the more common exemptions. Remember, it does not matter how an employee is paid. The fact that an employee is paid a salary is irrelevant. A person is presumed to be entitled to overtime pay unless their position fits within an exemption.

Our law firm, The Ottinger Firm, recently filed a class action suit against Goldman Sachs for overtime pay violations. The law suit alleges that Goldman Sachs improperly classified certain IT employees as independent contractors and then failed to provide them with overtime pay. The misclassification of employees as independent contractors is a common corporate scheme to lower costs. By classifying employees as independent contractors, a company avoids overtime pay, health benefits, workers compensation insurance and even certain tax obligations. In this case, the IT employees did not fall into the category of independent contractors because they were treated like Goldman Sachs employees - they were not actually independent contractors. The case was filed in federal court in New York City.