Non-payment on payday is a FLSA violation

The federal ninth circuit has held that late payment of wages to an employee constitutes a minimum wage violation. Rother v. Lupenko, et al., Nos. 11-35922, 11-35953. (April 12, 2013). For purposes of the federal minimum wage requirement, late payment of wages after payday is a failure to comply with the minimum wage requirements of the FLSA. I'm pretty sure this result would be hard to replicate in the Fifth Circuit, and that a reasonable delay in payment would likely be a de minimis violation not subjecting the employer to a finding of a violation under the FLSA.

Are interns employees?

Whether interns are employees subject to the Fair Labor Standards Act was decided in the affirmative by a federal district court in New York. Unpaid internships have proliferated in recent years. In this case the interns worked in the film industry. The inquiry as to whether an intern is an employee for purposes of the FLSA is a fact driven one, but employment status is defined very broadly to include anyome who the employer "suffers or permits to work."

Hurricanes and paying enmployees

What options exist for paying employees when a hurricane forces an employer to close?

• Non-exempt employees must be compensated only for hours actually worked. If the employer cannot, or does not provide work to those employees due to a natural disaster, it is not required to compensate them for hours not worked. An exception to this general rule exists where there are employees who receive fixed salaries for fluctuating workweeks. These are non-exempt employees who have agreed to work an unspecified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.

• As for other exempt employees, if they choose not to come to work due to transportation difficulties or other storm issues, but the employer is open for business, the employer may require the employee to use paid time off or vacation pay, or may choose to place the employee on unpaid leave. Any required use of PTO should be in full day increments., if the employee worked a partial day, then the exempt employee is entitled to full pay for that day.

• The employer will be required to pay an exempt employee’s full salary if the worksite is closed  or unable to reopen for less than the complete work week due to storm reasons. When the facility is closed for more than a complete work week, the employer is not required to pay exempt employees for any complete work week closure caused by the storm related closure.

It is also possible to require exempt employees to make up time missed. Issues regarding compensation are fact driven. Employers should consult with their employment attorney for specific advice. 

Member of L.L.C. not FLSA employer

The Fifth Circuit in Gray v. Powers becomes the first federal circuit to squarely address the liability of an individual member of an L.L.C. for FLSA wage claims of an employee of the L.L.C. The court rejected liability based solely on membership status and affirmed that operational control by the member is required to impose liability. The Court noted that it employs the economic reality standard for assessing operational control, and in this case, no reasonable jury could have concluded the Defendant possessed the power to hire and fire, ability to supervise, power to set wages, and/or maintained employment records.

Arbitration rejected

In Carey v. 24 Hour Fitness USA, Inc., the Fifth Circuit affirmed a trial court refusal to order arbitration of a FLSA claim because the employer retained the right to modify the arbitration agreement retroactively.

Conundrum

Sometimes its hard to tell who is the player and who is getting played. An 8 year employee of Target claims his discharge was because he complained about not receiving uninterrupted breaks. Under federal wage hour laws employees who are called back to duty during a supposed break are entitled to compensation for the break which is interrupted. The federal lawsuit claims retaliation for complaints about breaks being interrupted in this manner is the real motivation for the discharge.  The irony is his discharge was ostensibly because he worked through a lunch break off the clock. Many employers have a policy preventing employees from doing just that. The basic reason for the policy is to discourage unauthorized work which may lead to overtime. If the employee works, he is entitled to compensation under the FLSA, even when the work was unauthorized and in violation of company policy. So the employer's remedy is limited to discipline for violating the policy. The employer may not refuse to pay the employee. One interesting fact in this case is the time clock prevented an employee from clocking back in within 30 minutes of clocking out. While one can understand the employers objective, this approach likely will result in the trier of fact assuming the employer's time clock does not accurately reflect time worked

FLSA retaliation claim by applicant dismissed

The Fourth Circuit, in a divided opinion, holds an applicant for employment who is denied employment  after the prospective employer learned that she had sued her former employer under the FLSA is not an employee subject to the anti-retaliation provisions of the FLSA. A strongly worded dissent by Judge King relies upon, Robinson v. Shell Oil Co., a Title VII decision in which the Supreme Court held employers who retaliate against former employees who engaged in protected activity stated a Title VII retaliation claim. In both cases the issue was whether the statute extended protection in a context where the adverse action was taken against a non-employee. Given the Supreme Court's handling of recent retaliation cases, I think this one might get a look-see.

No FLSA retaliation claim available to prospective employees

The Fourth Circuit, in a divided opinion, holds the retaliation protections of the Fair Labor Standards Act apply only to current and former employees of an employer, not prospective employees. In Dellinger v. Science Applications International the majority finds this result compelled by the statutory language. Relying on Robinson v. Shell Oil Co., 519 U.S. 337 (1997) which held a former employee can state a retaliation claim under Title VII for conduct occurring after termination of the employment relationship, the dissent argues the Plaintiff states a claim. Money quote after the jump.

Gimme!

Purdham v. Fairfax County Sch. Bd., (4th Cir. Mar. 10, 2011) is an interesting FLSA case involving a public school golf coach who also was employed by the school as a safety and security assistant. The coach claimed he was entitled to overtime for his services as a golf coach. The court determines his duties as a coach were not a condition of continuation in his "day job" and accordingly he was properly deemed a volunteer coach, not an employee. Former Justice Sandra Day O'Connor participated in the unanimous decision.

Formality rejected

In a divided opinion, (Breyer) the Supreme Court has decided that a written complaint is not a necessary prerequisite to a retaliation claim under the Fair Labor Standards Act. The Court refused to decide whether the complaint must be filed with  a court or the government, (as dissenters Scalia and Thomas urged) because the Employer did not raise the issue in its Petition for Certiorari. Nevertheless, much of the reasoning in the majority opinion would support the position that an internal complaint would also be protected by the anti-retaliation provisions.

Res judicata does not bar subsequent retaliation claim

The 11th Circuit just decided an interesting FLSA retaliation case. The plaintiffs filed suit  concerning overtime violations. Subsequently, after the initial suit was filed, the plaintiffs filed a second suit alleging retaliation occurring after the filing of the original claims. Because there was no amendment or subsequent pleading asserting the second claim in the first suit, disposition of the first suit did not bar the second suit as res judicata.

Minimum wage and job loss

Does an increase in the minimum wage cause a reduction of minimum wage jobs? In the past some studies suggested there is a job loss associated with increases in the minimum wage. But a new study, reported here, using comparisons between counties in different states with different minimum wages suggests neither short term nor long term negative effects on jobs occur as a result of increases in minimum wage requirements. Video here

Senate candidates think minimum wage laws unconstitutional

Two Senate candidates have claimed regulation of the workplace by Congress is unconstitutional. This despite a unanimous Supreme Court upholding the validity of the Fair Labor Standards Act in 1941.

Employer loses FLSA appeal-Per Diem payments part of regular rate

An employer's use of a per diem rate did not insulate it against an employee's claim under the Fair Labor Standards Act (FLSA). The employer's contract with an experienced aircraft painter, specified a $5.50 hourly rate and a $20.00 overtime rate. The employee also received a per diem of $12.50 for every hour worked up to 40 in a work week. A year into the contract the employer announced a $1.00 and hour raise. Plaintiff's $5.50 straight time rate was not changed, the per diem was raised $1.00. The Fifth Circuit, in Gagnon v. United Technisource, Inc. et al, No. 09-20098 (May 27, 2010) affirmed summary judgment to the employee. More after the jump.

Unpaid interns

The New York Times reports the DoL intends stepped up investigation of unpaid internships. Nancy Leppink, Deputy Administrator of the Wage Hour Division of the federal Department of Labor issued a guidance letter concerning workplace training. At page 8 she underscores the criteria for excluding interns from coverage under the Fair Labor Standards Act. More after the jump. 

Independent contractor status determined by economic reality

A recent Fifth Circuit opinion reverses summary judgement in favor of the employer against the claims of cable splicers who asserted they were not paid overtime as required by the Fair Labor Standards Act [FLSA]. The district court granted summary judgement after finding the cable splicers to be independent contractors, not employees. The per curium opinion concluded that cable splicers who worked on a steady and reliable basis over a substantial period of time exclusively with the defendant were sufficiently economically dependant upon the alleged employer to be employees, not independent contractors.

Wage/Hour study indicates exposure

We have noted a rise in wage/hour litigation in our offices. A lot of it is driven by belated investigation of contractors post-Katrina practices. But violations occur in many industries. A recent academic study indicates widespread violations in three major metropolitan areas - Los Angeles, New York and Chicago. The survey's advisory board includes both SEIU and UNITE locals. The focus of the survey is upon urban low wage workers. The study concludes more aggressive enforcement is needed to ensure compliance.  Bullet summary after the jump

• Fully 26 percent of workers in our sample were paid less than the legally required minimum wage in the previous work week.
• These minimum wage violations were not trivial in magnitude: 60 percent of workers were underpaid by more than $1 per hour. 
• Over a quarter of our respondents worked more than 40 hours during the previous week. Of those, 76 percent were not paid the legally required overtime rate by their employers. 
• Like minimum wage violations, overtime violations were of substantial magnitude. The average worker with a violation had put in 11 hours of overtime—hours that were either underpaid or not paid at all. 
• Nearly a quarter of the workers in our sample came in early and/or stayed late after their shift during the previous work week. Of these workers, 70 percent did not receive any pay at all for the work they performed outside of their regular shift.
• The large majority of our respondents (86 percent) worked enough consecutive hours to be legally entitled to at least one meal break during the previous week. Of these workers, more than two-thirds (69 percent) received no break at all, had their break shortened, were interrupted by their employer, or worked during the break—all of which constitute a violation of meal break law. 
• Of the tipped workers in our sample, 30 percent were not paid the tipped worker. In addition, 12 percent of tipped workers experienced tip stealing by their employer or supervisor, which is illegal.
• One in five workers in our sample reported that they had made a complaint to their employer or attempted to form a union in the last year. Of those, 43 percent experienced one or more forms of illegal retaliation from their employer or supervisor. For example, employers fired or suspended workers, threatened to call immigration authorities, or threatened to cut workers’ hours or pay.