Archive for the ‘wage’ Tag

The Fair Labor Standards Act – a Formidable Opponent to Employers

Recently, a client approached us after losing his job as a cashier at a convenience store.  He contended that he had been terminated over religious differences with his boss and coworkers.  Our client was Hindu and his coworkers Muslim.  As a result, he felt that he was routinely given the worst tasks of all of the staff, and ultimately, that he was fired for complaining about the discriminatory treatment.

This client relied heavily on his steady income and was suffering from its sudden loss. We agreed to pursue a claim of wrongful discharge based on religious discrimination under Title VII of the Civil Rights Act.  In preparing a complaint and computing the damages to the client resulting from the loss of his job, we asked him more about his lost earnings – what was his hourly rate? how many hours did he work in a typical week?  It became Immediately apparent that, not only had the client been unlawfully terminated, but, working 60 – 80 hour weeks at a “straight time” rate of $10.00/hr, he had not been paid overtime (or “time and a half”) for all hours in excess of 40/week in accordance with his rights under the Fair Labor Standards Act (“FLSA”).   Suddenly, this client’s case became focused on the three years of unpaid overtime to which he was entitled – a clear, easily calculated claim which was not dependent upon proving the discriminatory mindset of the employer.

Once an overtime violation is alleged by an employee, the burden shifts to the employer to disprove the entitlement to overtime and/or back pay. For that reason, FLSA allegations are notoriously difficult to disprove, and such wage and hour claims allow the plaintiff to seek back pay, front pay, attorney’s fees and liquidated damages.

In our client’s case, the violations were so blatant (the pay records, of which our client had copies, clearly showed up to 80 hours of work per week paid at a straight time rate) and serious (thousands of hours of underpaid overtime), that the claim was settled within two weeks and before a complaint was even filed.  The resulting settlement to our client was substantial.

Employers provide slam-dunk FLSA cases for disgruntled employees when they

– fail to pay 1.5x the “regular rate of pay” for all hours worked in excess of 40 per week;

– incorrectly calculate of “regular rate of pay” (which is more complicated than it sounds);

– use “comp time” in lieu of overtime;

– incorrectly classify employees as “exempt” (“exempt”  means more than just “salaried and/or responsible”);

– make automatic deductions from pay for meals and breaks;

– permit, or require, “off the clock” work of any description;

– make deductions from pay for the cost of uniforms, damage to property, loss of property, violations of rules/policies;

– retaliate against an employee who complains of FLSA violations.

Employees who feel that their FLSA rights may have been violated should compile good records of their hours worked and pay received for the previous three years, before speaking to an employment lawyer.  Employers should be proactive in consulting an employment lawyer to confirm they are complying with the FLSA.

Jim Joedecke, Liz Clack-Freeman and Eadaoin Waller represent both employees and employers regarding compliance with Title VII, FLSA and in other areas.  By not limiting their practices to “one side,” they have a unique perspective to “both sides” of a claim or potential danger zone.

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Cost-Effective FLSA Compliance

Eadaoin Waller

We all know that under the Fair Labor Standards Act (FLSA), non-exempt workers should be paid for all work hours, including time spent on tasks which may be outside of their core employment obligations – such as training, meetings, education and travel between worksites.  A novel question on this topic cropped up in our employment practice recently, and we thought it worth sharing the answer we found.

A service industry client had been conducting in-house training for its non-exempt employees on a quarterly basis for years.  The training was related to the employees’ jobs – keeping their skills up-to-date and fresh.  However, these training sessions had always been unpaid.  Nobody had ever complained; indeed, the work-based training was viewed as a perk by most employees – an investment in their professional development.  However, it was clear that this would have to be corrected going forward, at a not-inconsiderable cost.  The question was how to minimize this new cost to the business.

There are several options for correcting a wage and hour issue like this one.  The first is to simply pay for the training hours going forward at each employee’s regular rate.  This option proved too expensive for our client.  The next option was to reduce each employee’s hourly rate, and compensate them for the training hours (paying them approximately the same amounts overall, on a quarterly basis, but with a reduced hourly rate of pay).  This would be a tough sell to existing employees, however, as it looks like a pay cut on paper.  It would also impact recruitment negatively.  The third option was to compensate all non-exempt employees for training hours at minimum wage.  Although unorthodox, this is permissible under the FLSA.  There is no requirement that all work be compensated at the same rate – less profitable tasks can be compensated at a lower rate, as long as overtime and minimum wage rules are observed and as long as the employee has notice of how each task will be compensated.

The client issued a notice to all non-exempt employees, stating that from that point forward,  all training hours would be compensated at minimum wage.  Although this did not correct the compliance issue entirely (in order to do that, the employer would have to issue two years’ back-pay [at the employees’ regular rate of pay] for training hours).   However, with that that solution being cost prohibitive, the prospective solution chosen by the client was a perfectly reasonable “next best thing”.

Keep in mind, though, that a good knowledge of the applicable regulations is necessary to navigate the facts in any situation, and just because this solution worked for this client, it may not work for you.  If you are facing a situation like this one we urge you to obtain legal counsel to ensure compliance.

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Eadaoin Waller is a Georgia attorney, focusing her practice in corporate law.

Her firm, Andersen, Tate & Carr, P.C., works with all manner of clients in business and personal matters, providing “big firm” sophistication with suburban law firm attention and service.

Website: www.atclawfirm.com

Blog: www.andersentatecarr.wordpress.com

 Copyright © 2013 Eadaoin Waller & Andersen, Tate & Carr, P.C.

Paying Employees for Jury Duty   7 comments

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The rumors surrounding employers’ obligations to pay employees for time spent away from work, serving on a jury, abound. Many employers assume that they are responsible for paying employees during such absences. Many assume that they cannot owe employees their salaries or wages for time which is not spent actually working. Many pay employees for jury duty, but deduct the amount of the daily stipend received by the employee from the court. So, which approach is correct? And how should an employer react when an employee arrives back from court with a vague letter, dating back to 1989, from the Attorney General’s office, advising employers that employees are entitled to receive their salaries for time spent on jury duty?

Unfortunately, the answer is not straightforward. To deal, first, with salaried, exempt employees – employers should be aware that the Fair Labor Standards Act (FLSA) prohibits deductions from an employee’s weekly salary for time spent on jury duty. An employer may, however, deduct the amount of any stipend received by the employee, from the salary check. The applicable federal regulation is 29 CFR 541.602(c), which provides that

“While an employer cannot make deductions from pay for absences
of an exempt employee occasioned by jury duty, attendance as a witness or temporary military leave, the employer can offset any amounts received by an employee as jury fees, witness fees or military pay for a particular week against the salary due for that particular week
without loss of the exemption.”

However, the general FLSA rule that exempt employees do not have to be paid their salaries for any week during which they perform no work, still applies. An exempt employee who absent from work from Monday through the following Monday, is not entitled to any pay for the full week of jury duty.

The FLSA does not require employers to pay non-exempt employees for time spent on jury duty or as witnesses at court.

However, the FLSA’s positions on both exempt and non-exempt employees are complicated in Georgia by the existence of a 1989 Attorney General’s Opinion Letter, which is being distributed to jurors in certain counties by the courts. This Opinion Letter provides that “an employee is entitled to be paid his or her salary while missing work to serve on jury duty.” This letter is not law, but it is persuasive authority that employers should compensate all employees (exempt and non-exempt, whether or not they are absent for more than one week) for jury duty. As yet, it appears to have gone unchallenged in court, and certain judges have suggested that employers who do not comply with the directive of the letter may be brought before the court to explain themselves. The point was made, at a recent employment law seminar which I attended, that judges do not have authority to legislate in this manner – but who wants to challenge them?

Until there is some decisive legislative action or litigation on this point, the most conservative position for employers in Georgia, especially those operating in jurisdictions where the Attorney General’s 1989 Opinion Letter is being distributed to jurors, is to pay employees (hourly and salaried) for time spent on jury and witness duty. Statistics indicate that 82% of employers in Georgia are doing this already. If you are in the other 18%, or you have questions about your rights with respect to jury or witness duty (either from an FLSA or a State law perspective), an employment attorney will be able to help.

By Eadaoin Waller, a senior associate in our Corporate Department

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