New York Employment Lawyer Blog

Are you employed in Florida and wondering why you aren't getting overtime pay? Get in line. Florida led the nation in FLSA lawsuits in 2009 with over 2000 filed. That's 37 wage and hour lawsuits a week in the sunshine state. There's a number of different theories about why so many FLSA lawsuits are filed in Florida, but I haven't found any of them to be convincing. My theory is that since there is no state wage recovery statute in Florida the only remedy for employees deprived of wages is the federal court and the FLSA.

I recently spoke with another plaintiffs' side employment lawyer practicing in Florida about the increase in FLSA lawsuits in his district and he groaned. As it turns out, the federal bench in Florida has grown weary of these lawsuits and perceives most of them to be abusive. In fact, the Middle District of Florida requires all FLSA litigants to answer judicial interrogatories immediately following the filing of a lawsuit in an effort to quickly resolve these cases.

Another possible reason for the FLSA litigation explosition in Florida - timeshares sales. In a January 25, 2007 opinion letter, the Department of Labor determined that on-property timeshare salespeople are nonexempt employees under the FLSA and are entitled to overtime. There are thousands of timeshares sales employees in Florida who may have only recently become aware of their entitlement to overtime.

If you are one of the Florida residents cheated out of overtime, call us for a free screening to determine your rights.

Are employees in small companies protected by the FLSA and therefore entitled to overtime pay? Most busineses, even small businesses, are required to comply with the FLSA. The FLSA protects employees working for an "enterprise" which employes more than 2 people and makes over $500,000 in gross annual revenue. This brings most small compaines within its protection, including small mom and pop restaurants, grocery stores and pharmacies.

Lawsuits against smaller companies for unpaid overtime are on the rise. See this article for examples of this trend. Some smaller companies simply can't afford to pay employees overtime and willfully violate the law. Other companies are ignorant of the law and negligently misclassify workers. The former are subject to greater penalties for willful violations, but attorneys' fees can be assessed against either category of violator. If you are an employee at a small company and think you are being deprived of overtime compensation, you should call for a free screening to determine your rights.

Overtime pay theft is rampant with some reports saying 19 billion per year in overtime is stolen. What is the reason for this stunning statistic? Why are so many people losing so much money to overtime wage theft? The answer is simple. Companies know that the Department of Labor, the government branch that is supposed to protect workers, is a worthless do nothing government agency. Studies have found that calls for help are not even returned by the Department. In fact, as part of an investigation into the Department's neglect, a caller reported child labor abuses with children being forced to run saws in a meat packing plant during school hours. The call was not even returned. The government does not protect workers and that is why overtime is not paid. See this article explaining in more detail.

Since the government is broken, this means that the private sector has to do the job. It seems like every employment law firm is getting into the overtime pay business. More law firms are needed to help protect workers from overtime pay abuses. Our employment law firm has an office San Francisco and New York City to handle these cases.

Fed up with forced overtime work and no overtime pay?   Workers in Mexico decided to burn the factory down.   Read about it here.

We had an inquiry today from a commercial truck driver. For two years, he made interstate deliveries to a single retail store that sold the goods. The delivery required a 14-hour roundtrip that he made five days a week - for $220 dollars a day. I nearly hit the floor.

It's not easy being a commercial truck driver, and the overtime laws don't help matters at all. Basically, if you are a delivery driver and ship goods in interstate commerce, you are not entitled to overtime. In fact, if you are distributing goods from a warehouse to outlets in the same state, but the goods themselves originated out of state, you are also not entitled to overtime.

Based on my experience, there are only three situations where commercial drivers may be able to demonstrate an entitlement to overtime under the FLSA. First, if your truck has a gross vehicle weight of less than 10,000 pounds, you will be eligible for overtime whether or not you haul goods in interstate commerce. Second, if the goods you haul are manufactured and distributed in a single state, you will be eligible for overtime. This is an uncommon occurrence, but not totally unforeseeable, especially in large states such as California. Third, if you deliver out of state goods, regardless of the size of your haul, from an intermediate in-state storage point and distribute the goods to local retail outlets without a "fixed and persisting transportation intent" to deliver the goods to identifiable retail outlets from the time of out-of-state shipment, you will qualify for overtime. In other words, if you deliver out-of-state goods to an in-state storage warehouse and then distribute the goods to a local retailer, you will qualify for overtime if no fixed destination existed from the out-of-state origin of the goods. For example, if you are a parts runner for an automobile sales franchise that requests replacement parts and sends you to retrieve them from a local warehouse, you will qualify for overtime compensation even if the parts originated from out-of-state and they were not intended for any dealership in particular.

Whew.

If you are a commercial driver and suspect you are getting the shaft, call for a free screening. The law is still very unclear and employers will likely exploit the ambiguity.

An interesting ruling out of the Third Circuit this past week clarified the boundaries of the FLSA's "learned professional" exemption in a decision involving the classification of pilots. The opinion follows a confusing non-opinion opinion issued by the U.S. Department of Labor which articulated a "nonenforcement position" with respect to the exempt status of pilots. The Third Circuit Court of Appeals in Philadelphia in Michael G. Pignataro; Thompson R. Chase vs. Port Authority of New York and New Jersey affirmed a New Jersey federal judge’s decision granting summary judgment in favor of the pilots holding that they were not exempt employees under the professional exemption. Since the pilots’ knowledge and skills were acquired through experience and supervised training as opposed to intellectual, academic instruction, they did not qualify as "learned professionals." According to the DOL, recognized "professional" occupations include law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, pharmacy, various types of physical, chemical, and biological sciences. A bit of intellectual hogwash? Maybe. But if you're a pilot and now $87,000 richer following reimbursement of unpaid overtime, it may not matter.

And how are theologians paid, anyway? When exactly is a theologian off the clock? Sounds like a tough case for an employer.

I have screened plenty of calls from the recently terminated, and by far the most common inquiry involves a separated employees’ right to accrued vacation pay. My answer – it depends. If your employer has a monthly vacation accrual policy, you are entitled to a prorated share of your annual entitlement based on the number of months worked prior to your termination. However, many employers include disclaimers which nullify the benefit upon termination. Look closely for these policies – if they are in your employment manual, you don’t get anything.

This is not a matter of pocket change. Some generous employers allow for rollover of vacation days, and employees can accumulate a substantial reserve of accrued vacation days. I have a friend who made a down payment on an apartment with his accrued vacation cash out. Don’t leave any money on the table. Accrued vacation time should be the first benefit you seek in your severance payment negotiation, followed by any unpaid overtime wages.

One of the dirtiest tricks out there is the so called “overtime waiver.”   Some sleaze bag companies have their employees sign an agreement giving up their right to be paid overtime pay.   It looks legal and sounds legal.   Hey, it is a contract so it must be valid – that is what everyone thinks.  But don’t be fooled.  That agreement is a sham – bogus – practically criminal.

The law is clear – an employee CANNOT waive his right to overtime pay.   If your company had you sign one of these overtime waivers then you are probably working for a sleazy company.   Ignore that waiver – burn it – it means nothing.   You have the right to overtime.  

Just so you know, we see these waivers all the time.  Companies do it a lot – why – it works.   Most employees get tricked into thinking that they do not have the right to overtime pay.   Pretty slimy.   Don’t fall for it. 

Yes, in New York your employer can require that you work overtime.   In fact, your employer can even discipline you if you refuse to work overtime.   The law only requires that you be paid time and half for each hour of overtime that you work, but you do have to work overtime if asked.    You can refuse to work overtime, but then your employer is free to fire you.  If your employer requires overtime from you, you either have to do it or risk being fired.   If you don’t want to work overtime, your best bet is to find another job – one that will not require overtime.  

Yes, salaried employees are often entitled to overtime.   People frequently assume that overtime pay is only for hourly employees, but this is wrong.   Being paid a salary is not a factor – what matters most is the kind of work you do. 

A salaried employee, like an hourly employee,  must be paid overtime unless they meet the test for exempt status as defined by federal and New York state laws.   So – the easy answer to this common question is that being paid a salary is not a factor.   Do not assume that you are not entitled to overtime pay just because you are paid a salary.   You may be entitled to overtime pay. 

Yes, New York law requires that employers pay overtime, whether authorized or not.  The overtime rate must be one and one-half times the employee's regular rate of pay for all hours worked in excess of 40 hours in a workweek. 

An employer, however, can discipline an employee if he or she violates the employer's policy of working overtime without the required authorization.  So the bottom line is that you must be paid overtime even if your company did not approve it.   But, your company can discipline you for doing this.  

Tom works for a company in Brooklyn that is struggling financially. Tom is being asked to work 15 to 18 hours a day and also on weekends. He is exhausted and his wife called and wanted to know if there was a limit on how many hours a person can be asked to work.

She was amazed when I told her that there is no limit. The law does not provide any limit on how many hours a person can work in a day or a week. The only real regulation that controls are the overtime laws and these do not limit how long you work, it just provides for extra pay for long hours. Under the New York and Federal overtime rules, a person must be paid time and half for each hour worked in excess of 40 hours per week.

In New York, employees are not entitled to be paid for holidays, sick time or vacations. Also, there is no rule requiring extra pay for working on a holiday. Some companies, however, have policies that provide employees with pay for holidays, sick time and even vacation pay. If your company has such a policy, you then have the right to be paid according to its terms. But, under the law in New York, you are only entitled to be paid for the time that you actually work and for overtime pay for each hour worked in excess of 40 per work week.

Lately we have had a few managers contact the firm to ask if they are entitled to overtime pay.   Here is the answer. 

First, someone who is truly a manager is not entitled to overtime pay – they are exempt from the law that requires overtime pay. 

The real question then is when is a manager really a manager?  Companies routinely label people as managers just to avoid paying them overtime.   So be careful – you might be entitled to overtime pay even if your title includes the word “manager.”   Here is the rule.   A person is truly a manager if:

1.  You are paid at least $23,660 a year or $455 per week

2.  Your main job is to manage some part of the company

3.  You supervise/manage at least two full-time employees

4.  You actually do the hiring and firing of the people you manage or play a major role in those decisions. 

If any one of the above is missing from your job, then you are not a manager and you are therefore entitled to overtime.  If you have the title of manager, but do not meet the criteria above, you may have the right to recover unpaid overtime.  

I recently was involved in hiring a nanny and spent the better part of two days trying to structure her compensation. Ok, my wife did. I was eating cookies and playing with my kids.

Bottom line for parent employers - Don’t take nanny employment issues lightly. The FLSA is a minefield when it comes to “domestic service” employees, most of whom are nonexempt and entitled to minimum wage and overtime (not to mention unemployment and workers’ compensation insurance). Just ask Darcy Snodgrass. Her nanny sued her and her husband for breach of contract and failure to pay overtime under state and federal law. Aside from alleging some very unflattering facts about Ms. Snodgrass (repeatedly harassed plaintiff to the point of vomiting), the Plaintiff maintained that the Snodgrass family could not challenge her overtime entitlement accounting because they failed to maintain time records of her employment. Never thought of that, huh? Yes, you might want to think about putting up a punch-card time clock in your living room.

What happens if you are a prevailing party entitled to attorneys’ fees under the FLSA, but the defendant company is hiding assets or otherwise avoiding a judgment? Fraudulent conveyances to avoid a judgment are not uncommon in FLSA cases. If a company is willing to violate the FLSA to lower the bottom line, they probably won’t have a problem hiding assets to avoid a subsequent judgment.

While most statutory fee shifting provisions are interpreted as compensating only services performed up to the time of judgment, a recent opinion from the District of Oregon interprets a similar provision in the FLSA to include post-judgment collection efforts. The Court noted that “without such an award, a judgment is a hollow victory for a plaintiff who was improperly paid.” Deadbeat companies, be warned. The defendant company in the aforementioned case was up to its eyeballs in debt – over $200,000. The Court had little sympathy and piled the fees on top of the outstanding debt.

If a company classifies an employee as salaried or managerial, the employee is not entitled to overtime, right? Wrong. Many companies exploit a common misunderstanding that salaried managers are exempt from overtime by fraudulently labelling employees as "managerial" when they perform mostly non-managerial tasks. In these instances, the company is liable for unpaid overtime wages and an equal amount in damages.

Often, companies leave evidence of their intent to violate the FLSA, in which case a larger class can be certified, and more penalities assessed. A recent lawsuit filed by misclassified AT & T managers sheds light on the tracks a company may leave after they violate the FLSA. According to the allegations in the complaint, Bell South originally paid so-called "First Level Managers" overtime before the AT & T takeover two years ago. The only changed circumstances was AT & T's desire to avoid paying overtime to administrators - they simply changed their titles and classified the newly minted managers as exempt.

Managerial employees should assess their duties and determine if they actually perform managerial tasks, such as hiring and firing employees, rather than clerical or administrative tasks. Do not rely on your employer's classification of your FLSA status, especially in those instances where the status changes suddenly without adequate explanation.

In March 2009, State Labor Commissioner M. Patricia Smith announced a record settlement with nine Asian restaurants in New York City which required owner Tsu Yue Wang to pay $2.3 million in minimum and overtime wage underpayments. In response to the allegations, Mr. Wang claimed that he was not the owner of the restaurants despite clear evidence that he maintained control.

According to a recently filed lawsuit, the hip and prestigious are not immune from the restaurant industry’s notorious defiance of wage and hour obligations. On December 21, 2009, Cipriani's event, catering and restaurant enterprise was sued for wage and hour violations. Specifically, the plaintiffs allege that Cipriani unlawfully retained service charges paid by customers to the waitstaff and shaved time from records in order to pay workers for fewer hours than they actually worked. Aside from failing to pay overtime, unlawful tip pooling and time shaving are two of the most common restaurant industry wage violations.

On October 26, 2006, the Department of Labor issued an opinion letter which had a massive impact on California’s IT community. Resolving a long standing dispute, DOL stated that employees who provide computer help desk support are not exempt from overtime under the “administrative” white collar or computer exemptions.

The industry has responded slowly to the DOL opinion, and many companies remain unaware of the implications of misclassifying tech workers as exempt. Jackson West with Valleywag notes that the practice of misclassifying nonexempt IT professionals as exempt is “endemic in California,” particularly at start-ups where long hours are common. One year ago, Kent Blake of Redmondmag.com, an online magazine which follows issues impacting the Microsoft IT community, characterized the scope of the problem as “the help desk overtime bomb.” Is the bomb ticking or has it exploded? Ask Apple and IBM. They have both been sued for misclassifying help desk employees and network engineers, with IBM settling their lawsuit in November 2008 for $65 million dollars.

If you are a computer professional in a tech position, your entitlement to overtime depends on whether your duties involve systems analysis and the application of programs, or implementing specifications developed by someone else for the purposes of troubleshooting customer or employee problems.

Paralegals are entitled to overtime pay (time and half for each hour over 40 per week).  But Renata Magnoni was not paid overtime by her law firm and she sued them to recover her pay.  The law firm argued that Magnoni was not entitled to overtime because she fell into the “highly compensated employee” exception.  

The highly compensated employee exception provides that anyone who earns over $100,000 a year is not entitled to overtime.  (This is a broad summary – the rule is slightly more complex.)  Magnoni earned over $100,000 a year, but about a third of that came through a company she owned.  

She was only paid about $66,000 a year in salary by the law firm, but her company was paid another $50,000 a year by her law firm.   Her company performed filing services for her law firm and several other law firms.  

Magnoni’s employer argued that they paid her over $100,000 a year and therefore she was not entitled to overtime as a highly compensated employee.   But the Court disagreed and held that the money paid to Magnoni’s company did not count because it was not compensation paid to her as an employee.  

Since Magnoni earned less than $100,000 a year as an employee, she was entitled to overtime and the law firm will be forced to pay her for the upaid wages plus possible penalties and related costs.  See Magnoni v. Smith & Laquercia, LLP. 

“What can brown do you you?”  A group of 660 big brown delivery drivers are ready to tell the  company what it can do for them – it can pay them 12.5M.  UPS just agreed to settle an overtime class action brought by delivery drivers who were misclassified as independent contracts.  

The drivers claim they were deprived of benefits that regular employees receive because they misclassified as independent contractors.

The settlement was reported by law.com last week.  According to the article, the parties settled after a multi day mediation with JAMS mediator Ronald Sabraw. 

Companies can save money by classifying workers as independent contractors because contractors typically do not get benefits such as health insurance.  Independent contractors are not entitled to overtime either. 

Certain strict requirements need to be satisfied in order for workers to be properly classified as independent contractors and companies often misclassify to reduce costs.   But the reality is that companies usually do not get caught misclassifying employees so it usually pays off, unless they get sued.  Here, UPS got caught.  

Have you ever noticed that people with lofty job titles are almost always paid on a salary basis?   There is a reason for that.   People who are “Professionals” are not entitled to overtime pay.   Companies often misclassify employees as professionals in order to avoid paying them overtime and a fancy title is good cover. 

For example, in Young v. Cooper Cameron, the company did not pay its “engineers” any overtime pay.   The “engineers” were all paid salaries and were not pay extra for overtime because the company classified the engineers as professionals.   This was a mistake.

The title of engineer was a little misleading.   None of the engineers had any college training.  They were all high school graduates.   Under the law, In order to be properly classified as a “professional” and exempt from overtime, you generally need a college degree or even an advanced degree. 

The workers in Young were misclassified as professionals and they should have been paid overtime.   No wonder, the title of engineer does sound professional, but a title alone is not enough.  Don’t be fooled by a title.  You might be entitled to overtime even if you have a title such as manager, engineer or the like.   For a more detailed discussion of the Young case, see our prior post below or the always insightful Waist a Second! blog.  

The California Workforce Resource Blog has a post lamenting the recent decision in Davis v. J.P. Morgan Chase & Co. In Davis, the court held that Chase erroneously classified its loan officers as exempt administrative employees. The court held that the loan officers were nothing more than financial production workers churning out the bank’s lending products and therefore were entitled to overtime. The bank had erroneously classified these workers as administrative employees who were salaried and exempt from overtime.

This decision means that thousands of wall street support personnel are likely being deprived of overtime.  Now, loan officers, brokers, analysts, account executives and many other positions are entitled to overtime. 

According to the Davis case, an employee qualifies for the administrative exemption under the Fair Labor Standards Act only if the employee’s primary purpose is devoted to the internal operations of the company such as human resources, accounting, or advertising.   These positions are considered administrative because they deal with the administration of the company itself and not with producing the goods or services of the company.  

In Davis, a group of loan underwriters were classified as administrative employees who were exempt from overtime.   The court held that this classification was wrong because the loan underwriters work was focused principally on producing the bank’s product, loans and not geared to the internal operation of the bank itself.   This ruling is likely to provoke a round of overtime lawsuits challenging wall street banks for misclassifying its employees. 

The Second Circuit decided Young v. Cooper Cameron on November 12, 2009. Andrew Young designed hydraulic power units for oil rigs. Young, like most of the other product designers at his company, never went to college. Instead, Young acquired expertise over his twenty year career in various engineering positions. His job required a fair amount of skill as he designed complicated pieces of equipment. Young’s employer, Cooper Cameron Corporation, categorized him as an exempt professional under the Fair Labor Standards Act and paid him a salary with no overtime.

Under the Fair Labor Standards Act, employees who are deemed “professional” are exempt from the overtime pay rules. Young challenged Cooper Cameron claiming that he was entitled to overtime pay because he was misclassified as a professional under the FSLA. The District Court agreed and found that Cameron Cooper misclassified Young and that Young was entitled to overtime pay. The Second Circuit agreed.

In order to qualify as an exempt professional under the FSLA, the position in question must customarily require an advanced academic degree. The regulations state that a professional is someone “[w]hose primary duty consists of the performance of [w]ork requiring knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study.” 29 C.F.R. § 541.3(a). Labels such as “engineer” and the like are not persuasive as the court noted that there are many engineers who do not hold advanced degrees.

In this case, none of the product design specialists employed by Cameron Cooper had advanced degrees. They were all high school graduates with no college training. Since the work of a product design specialist at Cooper Cameron did not customarily require a prolonged course of specialized intellectual study, the Court held that Young was misclassified as a professional and therefore entitled to overtime pay.

The Fair Labor Standards Act requires that employees be paid overtime (time and half) for all hours worked over 40 in a week. Seems like a simple concept, but it is not. Many employees are exempt from the overtime requirement and therefore are not entitled to overtime pay even if they work more than 40 hours per week. Employees who are considered “administrative” are exempt from the overtime requirement. The Second Circuit just issued a case, Whalen v. J.P. Morgan Chase & Co., which clarifies what it means for an employee to be deemed administrative under the FSLA.

The Whalen court focused on the difference between jobs that are” production” oriented as opposed to “administrative.” Employees who spend their time working on production activities are entitled to overtime pay, while those who work at administrative tasks are not entitled to overtime. The court never provides a solid reason as to why production employees are entitled to overtime pay and administrative workers are not. According to Whalen, a human resources associate is engaged in administrative work and not entitled to overtime pay, but a police detective is engaged in production work and therefore entitled to overtime. The court goes on for eighteen pages pointing out the differences between production and administrative jobs, but sadly a solid underlying reason for this distinction is not provided. Maybe that is because the rules that regulate the payment of overtime pay are not based on logic, but instead rooted in lobbying and politics. The next post will focus on the nuances that differentiate administrative and production employees under the FSLA.

The Iowa Employment Law Blog by Patrick Smith today reports on a potential new trend in employee overtime cases.
Many employees are required to have blackberries, iphones or other smart phones and find themselves tethered to work even at home or on vacation. For some, it feels like they are always at work. It turns out that employees might have the right to receive overtime pay for responding to the emails and other after work tasks required of them. See the Wall Street Journal Blog for more on these blackberry overtime cases.

If you are an employee who feels "shacked" to the office by a blackberry or other device, you might have the right to receive extra pay. The overtime laws can go back as far as six years in unpaid overtime, so some employees may be owed a lot of money. For people who are now out of work, the extra pay could not come at a better time.

According to an article posted on emediawire.com, an estimated 80% of employers are out of compliance with federal and state wage and hour laws. It is no wonder that my office receives so many calls from workers who are not receiving their fair wages.
According to the article mentioned above, between 2004 and 2006, the number of federal wage and hour cases increased by 86%, and the number of multi-plaintiff cases increased by 70%. The threat is so pervasive, many organizations are now including wage and hour violation fines as a fixed line item in their budgets.

With the increased exposure in recent years, it is my hope that employers begin to realize that these violations are very real and very actionable.