Articles Posted in Overtime

One way some employers will attempt to avoid the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA) is by classifying employees as “independent contractors”. This practice is more common in certain industries than others, industries such as construction.

Recently the United States department of Labor obtained a judgment for $380,000.00 against an employer who had classified more than 300 employees working as drywall installers as “independent contractors” and failed to pay them overtime. The press release from the Department of Labor stated as follows:

“”The issue here-misclassifying employees as independent contractors to avoid paying required wages and benefits-is a critical one. Misclassification impacts not only employees and their families, but entire industries,” said Mark Watson, regional administrator for the Wage and Hour Division in the Northeast. “This case sends a clear message that the Wage and Hour Division will use every tool available to protect workers and to ensure a level playing field so that law-abiding employers are not put at a competitive disadvantage.”

The employees, who worked throughout central New York and the Northeast, put in as many as 60 to 70 hours per week with regularity and were paid straight time for hours worked beyond 40 in a workweek.”
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The amount of overtime pay violations occurring in this country is staggering. In our office we refer to these cases as “wage theft” cases. In other words, they involve people that have worked hard for their employer yet they are cheated out of wages that they have earned. This can come in the form of working the employee off the clock or failing to pay the employee overtime wages for working over 40 hours per week. Recently, I was interviewed about common overtime myths that we see in our office. You can watch the interview below:

 
//www.youtube.com/watch?v=B-Kg62A-CC4
 
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Overtime- Am I Exempt? The Computer Professional Exemption
Under the Fair Labor Standards Act (FLSA) employees are presumed entitled to overtime pay. That is, employees are entitled to receive one and one half their regular rate of pay for every hour worked over 40 in each workweek. This is true whether or not the employee is “salaried”.

There are however certain exemptions to the overtime law. These exemptions are based on the particular job duties of the employee not on whether or not the employee is paid hourly or is salaried. Courts routinely hold these exemptions are to be construed liberally in favor of the employee in determining whether an employee is in fact exempt from overtime pay.

One of these exemptions is the “computer professional” exemption.

In order for an employer to classify an employee exempt as a “computer professional”; the employee must meet both a compensation and job duties test.

The compensation test
In order to meet the compensation test, the employer must be able to show that the employee either received:

1. A minimum of $455.00 per week if salaried OR 2. A pay rate of $27.63 per hour if paid hourly
If an employee does not receive these minimum amounts in pay; then the exemption will not apply.

The job duties test
In order to meet the job duties test, an employer must show the employee is a “computer systems analyst, computer programmer, software engineer, or other similarly skilled worker” whose primary duty involves:

1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

2. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; [or]

3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems;

The term “primary duty” under the FLSA means the employee’s “principal, main, major or most important duty.” 29 C.F.R. § 541.700
Note that the actual job title of the employee does not determine if the job duties test has been satisfied; it is the actual job duties listed above that will determine if the employee is in fact exempt from the overtime requirements of the FLSA. Just because an employee works in “I.T.” does not mean they are exempt.

For the computer professional exemption to apply, an employee’s primary duty must require ‘theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering’ not merely ‘highly-specialized knowledge of computers and software.’ Chicca v. St. Lukes Episcopal Health Sys., 858 F. Supp. 2d 777, 784 (S.D. Tex. 2012)

Factors considered by the courts in determining whether an employee fit the exemption include, but are not limited to:

• the volume of data and the number of users the employee supports;
• the type and complexity of the problems handled by the employe;
• the layers of assistance below the employee to handle lower-level or simple problems, including whether there was a helpdesk below the employee to handle routine issues;
• the skill level of the employee, including certifications held, and the relevance and importance of those skills and certifications in the execution of the job;
• the level of initiative or creativity used in the execution of their job;
• the priority of the employee’s work relative to the overall work of the company.

Sethi v. Narod, 2013 U.S. Dist. LEXIS 141485, 42-43 (E.D.N.Y. Sept. 30, 2013)

The sixth circuit has held an employee will NOT be exempt if they do not engage in computer programming, software engineering, or perform systems analysis. “These job duties involve making actual, analytical decisions about how a computer network should function. Installing and upgrading hardware and software on workstations, configuring desktops, checking cables, replacing parts, and troubleshooting problems are not job duties which would fall under the exemption as they are all performed to predetermined specifications in a system design created by others.” Martin v. Ind. Mich. Power Co., 381 F.3d 574, 580 (6th Cir. Mich. 2004)

Other courts have followed the lead of the sixth circuit in this approach. (Systems analysis involves making actual, analytical decisions about how a computer network should function.” Karna v. BP Corp. N. Am., 2013 U.S. Dist. LEXIS 37517, 50 (S.D. Tex. Mar. 19, 2013)) (The mere fact an employee performs some tasks considered “consulting,” “analysis,” or “testing” relating to computers does not mean they fall within the ambit of a provision designed to exempt computer programmers, network designers, and software developers. Hunter v. Sprint Corp., 453 F. Supp. 2d 44, 52 (D.D.C. 2006))

There is undoubtedly a relatively small amount of case law interpreting the “computer professional” exemption; however it is clear one of the most important factors to consider is whether an employee is performing “help desk” or support type of job duties or actually performing work programming, developing software, or designing/creating computer networks.

There is no doubt however, each case will require a detailed look into the particular job duties the employee actually performed in determining whether the exemption applies.
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Workers at Murfreeboro’s Amazon facility who had filed suit against the company last month based on unpaid time spent on security screenings have recently accepted a settlement offer from the employer. The employer had forced employees at the facility to complete security screenings after workers had clocked out. These security screenings, sometimes lasting between 10-15 mintues, were used to prevent theft from the facility. Some Amazon employees were spending approximately 45 minutes each week on the required screenings without being paid. Obviously, this amount of unpaid time can add up to a significant amount of time spent on the job without being paid. This amount can also affect the amount of overtime pay that a worker is owed depending on the amount of time worked each week.

The employees of the Amazon facility had alleged that Amazon had violated the Fair Labor Standards Act (FLSA) by not paying the workers for their time spent during the security screenings. The FLSA is a federal statute that establishes minimum wage, overtime pay, and other requirements for employees across the country.

The lawsuit had been filed in the U.S. District Court for the Middle District of Tennessee. The suit settled fairly quickly. The workers were offered settlements in the form of payments ranging from $252 to $5,808 depending on how long each worker had been employed at the facility.
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Workers in Murfreesboro’s Amazon facility have filed a lawsuit in federal court to recover for unpaid time spent on required security screenings that often occurred during breaks and at the end of scheduled shifts. The security screenings are used by Amazon to make sure that employees are not stealing items from the facility. The suit claims that these required screenings can take more than 10 to 15 minutes a work day. This amount can total up to 40 minutes of unpaid time each week.

Filed in the U.S. District Court for the Middle District of Tennessee, three plaintiffs working at the facility requested the court to inform both current and former workers of their right to file for unpaid wages. The plaintiffs hope to bring awareness of the situation to fellow workers who also may have not been paid for all of their time worked.

In a similar case, the U.S. Court of Appeals for the Ninth Circuit ruled that an Amazon facility in Nevada had to pay workers for the time spent at security checkpoints at the end of the day upon leaving work. The lower court had originally ruled that the employer did not have to pay the employees who had to stand in line up for approximately 25 minutes before leaving work. However, the Court of Appeals reversed the lower court’s decision reasoning that the purpose of the security check was to prevent theft and was beneficial to the employer. The court found that this fell under the employees’ work related duties and were compensable.

The plaintiffs in this case are seeking to recover lost wages, including any overtime pay, rightfully earned under the Fair Labor Standards Act (FLSA). Enacted in 1938, the FLSA established a national minimum wage, a standard workweek of 40 hours, and guaranteed overtime payments of “time-and-a-half” to those qualifying under the statute.

However, there are certain employees who may be exempt from overtime pay under FLSA. There are three tests to determine whether an employee may be eligible for overtime pay including an employee’s salary level, salary basis, and job duties. The salary level test exempts those earning more than $23,600 per year or $455 per week from being paid overtime. The salary basis test requires that an employee receive a guaranteed minimum amount of money each work week in which he or she performs any work to be considered exempt. Finally, the job duties test exempts employees who perform certain job duties typically including executive, professional, and administrative tasks.
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The Fair Labor Standards Act (FLSA) is a federal employment law that has been around for nearly 75 years. Although the law has been around for a long time, there are still many aspects that are unclear to many employers and employees alike including those in the dental field.

One of the most basic aspects of the law requires that any non-exempt employees to be paid at least the minimum wage for any hours that they work and that they be paid 1.5 times their regular pay rate for any hour worked over 40 hours in a workweek. Although this may seem like an easy determination, many employers have a difficult time determining who exactly is eligible for overtime and who is exempt.

Although the law provides guidelines as to the types of employees that are exempt, an employee’s actual job duties determine whether he or she is indeed exempt. Whether deliberately or inadvertently, many employers have made the mistake of misclassifying or labeling certain employees as exempt under the FLSA. Employers may do this to avoid having to pay overtime. Employers may title a job position a certain way or highlight certain job descriptions. However, these factors are irrelevant.

In the dental field, there is some debate as to whether a dental hygienist should be exempt under the FLSA statute. A number of employers have considered dental hygienist as falling under the statute’s “professional” exemption. However, there are a number of stipulations that the hygienist must meet before falling under this “professional” exemption. Only those hygienists who have completed a four year academic study in an accredited school may qualify for this exemption. Similar to other “white collar exemptions,” the hygienist would also have to be paid by salary and receive at least $455 each week for the exemption to apply.

Another potential mistake made by employers is the miscalculation of overtime pay for any employees who are not considered to be exempt under FLSA. Although many of the employees that do receive overtime payment are paid hourly, the FLSA does not require the employees to be paid hourly in order to be eligible for overtime. Many employers wrongly assume that any overtime paid must be paid at a rate that is 1.5 times an employee’s hourly rate. However, the overtime rate should be paid at 1.5 times the employee’s regular rate. This regular rate of pay includes all payment for the employment including any commissions, incentive pay, and even some bonuses. In calculating the amount of overtime pay, employers should not leave out any payment included in that calculation.
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Recently a lawsuit was filed against a local favorite, The Standard Candy CO. This Tennessee company is famous for making Goo Goo clusters. But the latest news is not about how great its candy taste. The latest news involves allegations that the company did not pay their employees for the time they spend putting on their safety gear. Big deal? Well it can be a big deal. Although this may not seem like much if you look at it based upon the damages to an individual employee when you take this time and multiply times hundreds of employees the back wage claims can add up quick.

I was recently interviewed about this case. You can watch the interview below:

 

 

Our Tennessee Overtime Pay Attorneys have handled many cases very similar to this one. In our experience the fight in this case will come down to a few key points. Is it really safety gear that the employees are putting on or is it just a simple uniform. The law requires an employer to pay for the time it takes employees to put on safety gear but not clothing. Strange but I think they assume that clothing is easier and quicker. If it is safety gear the next big fight will be how much time it takes. This will involve experts from both sides recreating the events to see how much time is involved.
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Growing up in Nashville, Tennessee you can’t help be a fan of the Goo Goo Clusters. However, as a member of a Tennessee Overtime Pay and Employment Law Firm I am greatly disappointed in my beloved candy making company if a recently filed wage theft lawsuit turns out to be true. The lawsuit filed says that the Nashville based Standard Candy Company failed to pay the employees for time they were required to spend preparing for work. Specifically, it is believed that the company did not pay for the time it took their employees to put on their gear like uniforms, boots, and other safety equipment. In the labor law world these cases are technically known as “Donning and Doffing” cases. Donning and Doffing refers to the action of putting on or taking off protective gear, uniforms, etc
Okay, so what it is the big deal? It may just take a few minutes to put on the gear. What is that, a few dollars per day? Well here is the big deal. If a company that has hundreds or thousands of employees does this the nominal amount of wage theft from each employee can equal thousands or even millions of dollars. It is a way for companies to maximum their profits not by selling a better product but by taking advantage of its employees.

The courts have made varying rulings on whether the employee should be paid for the time of putting on their gear. The first examination is whether the employee is putting on “clothing” or is it “protective gear” . If the Court determines it to be clothes then the Fair Labor Standards Act is clear that employee do not get paid of that time. However, if it is safety gear then the employees may get paid. If it is safety gear the court will then look to see whether the time required to put on the gear is significant or does it take so little time it is not worth getting paid for. Often this comes down to experts that will recreate the time it takes to put on all of the equipment.

So it will be interesting to see how this particular Tennessee Overtime Lawsuit will develop against The Standard Candy Company. What type of gear were these employees putting on? How long did it take them? How many employees are involved? These cases can take years to resolve but regardless we hope that it results in a better working environment of all employees.

These types of cases make every employer examine their policies and procedures. Would it really be asking too much to allow your employees to clock in and then to put on their safety gear? Every penny counts to the working men and women of our state. What would these companies do if an employee asked them to pay for time while they were with their family? Obviously, they would think the employee is crazy. So why isn’t it just as crazy for the employer to require the employee to be at work and to change into their work gear for free?
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If you have ever waited tables then you know, that the Fair Labors Standards Act(FLSA) allows an employer to pay an employee a lower hourly rate if they receive enough tips to put them over the minimum wage amount. This can work great for both the employer and the employee if it is a restaurant/bar with good tippers. However, we have handled numerous cases over the past years where greedy employer try to skirt the law to make it even better for them. Some of the most common tip pool violations we see are:

1. Making the employee share their tips with managment and traditionally non-tipped employees
2. Employee does not make enough tips to reach an average of minimum wage
3. Paying the server the tip wage for non-tipped work. (ex. you have to clean the restaurant after close).

4. Not paying more for overtime work.
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