Hourly Employees

Paycheck Deductions: What Type of Deductions Can an Employer Make from an Employee’s Paycheck?

Published on: August 17, 2022 | by Martin & Martin, LLP

The wage & hour attorneys at Martin & Martin routinely receive telephone calls from employees asking whether it is legal for their employer to deduct work items from their paycheck. There are certain items that an employer may deduct from an employee’s paycheck. However, not all deductions are legal. The first question an employer must ask prior to making payroll deductions is whether the employee is paid minimum wage. If the employer compensates the employee at minimum wage, the employer may not make payroll deductions for things like uniforms, equipment, cash shortages, etc. because those deductions would reduce the employee’s pay to below minimum wage which violates the federal Fair Labor Standards Act (FLSA).

For employees whose wages are above minimum wage, an employer may make deductions for the cost of uniforms, equipment, cash shortages, and breakage. However, again, the employer must ensure that after the deduction, the employee’s hourly rate is at least minimum wage or time and a half for overtime hours. For example, if an employee is paid $10 per hour and worked 10 hours during the relevant week, their wages equal $100. If the employer deducted $30 for a cash register shortage and breakage, the employee’s final pay of $70 is less than minimum wage for the 10 hours and therefore, the employer would be in violation of the FLSA.

Related to payroll deductions, this month, the Department of Labor issued a press release about a large recovery of back wages for employees at several Wing Stop locations. The operator of these Wing Stop restaurants charged the employees for their uniforms, safety training, bacground checks and cash register shortages. The DOL recovered over $100,000 for the employees after an investigation into the pay practices. The DOL found:

Silk-Screening Contractor For Britney Spears, Lady Gaga & Ariana Grande Agrees to Pay Overtime Wages to Workers

Published on: May 16, 2022 | by Martin & Martin, LLP

Untitled-design-4-232x300 A California silk-screening company agreed to pay over $100,000 in unpaid overtime wages and an equal amount in liquidated damages to workers. “Celebrities, retailers and manufacturers profit from T-shirts sold for $40 or more, while the low-wage workers who produce the merchandise work overtime to meet consumer demand and become victims of wage theft” said the DOL. In this case, the company provided official merchandise for artists including Britney Spears, Lady Gaga, and Ariana Grande with shipments set for sale at retailers including Aeropostale, Footlocker, Kohl’s, Target, and Urban Outfitters. The company failed to pay its workers time and one-half for overtime hours — all hours over forty (40) in a workweek in violation of the Fair Labor Standards Act (FLSA).

Additionally, the DOL investigated manufactures of “hot goods” which are products produced by workers whose legal rights have been violated. The DOL said “[a]ll parties, from the entertainers to the distributers and wholesalers, should ensure their profits aren’t supported by workers in sweatshops, many of whom are immigrant women supporting families.”

If you are a worker who is not paid time and one-half for all overtime hours, Martin & Martin will be happy to speak with you to determine whether you are entitled to unpaid overtime and liquidated damages (double damages). An employer may not retaliate against a worker seeking to protect their right to overtime pay.

Illegal Tip Pool Costs Restaurant to Pay Back Wages to Employees

Published on: May 12, 2022 | by Martin & Martin, LLP

“Restaurant industry employers must know and comply with federal requirements to claim the tip credit,” says the Department of Labor (DOL). The DOL recently found a restaurant in violation of the federal tip pool regulations that protect tipped employees’ earnings. In the case, the restaurant required the tipped employees to share their tips illegally which invalidated the restaurant’s claim to a tip credit.

Untitled-design-5-232x300 Restaurants are permitted to claim a tip credit for its tipped employees. This means that a restaurant may pay a tipped employee $2.13 per hour plus tips. However, there is a federal regulation on how the tips are distributed to other restaurant employees. If a restaurant requires a tipped employee to share their tips with non-tipped employees like back of house employees or management employees, it invalidates the tip pool and tip credit. This means the restaurant owes the employee minimum wage (minus the $2.13 already paid) and overtime pay.

Unfortunately, illegal tip sharing, invalid tip pools, etc. are very common in the restaurant industry. Restaurants illegally use the money to pay other workers’ wages. The DOL noted that the restaurant industry struggles to find workers to fill jobs. However, it needs to recognize that it must follow the law with respect to tipped employees and protect their wages from illegal wage theft through forcing them to share their tips with non-tipped workers.

Investigators at the U.S. Department of Labor Allege Chemical Contract Packager Violated Overtime and Minimum Wage Rules of the Fair Labor Standards Act

Published on: February 22, 2016 | by Martin & Martin, LLP

On February 09, 2016, the U.S. Department of Labor (DOL) filed a federal lawsuit in the U.S. District Court for the Northern District of Georgia, against Apollo Industries and individually against the plant supervisor alleging that they failed to pay employees at least minimum wage ($7.25 per hour) and legally required overtime. The DOL alleges that the company only paid workers “straight time” for hours worked beyond 40 in a workweek as opposed to time and a half of their regular hourly rates of pay. The DOL also alleges that for some of the hours that the employees worked, the company failed to compensate the workers at least $7.25 per hour.

In filing the federal FLSA lawsuit, the DOL is seeking to recover unpaid minimum wage and overtime compensation for over 190 employees since February 10, 2012 and an equal amount of liquidated damages. Liquidated damages are also referred to as “double damages” because, if awarded, the Court can double the amount that is owed to the employees.

For more information about the FLSA, minimum wage or overtime, contact us. Additionally, for more information on the Apollo Industries case, see the DOL’s recent press release.

Macy’s Department Store Cleaners Granted Class Certification In Failure To Pay Case

Published on: December 10, 2015 | by Martin & Martin, LLP

Like many companies, Macy’s Department Stores use outside cleaning companies to clean the stores after hours. In Minnesota, a federal court granted the cleaning crew members’ request for class certification against one of these outside cleaning companies so that other crew members could join the failure to pay and overtime lawsuit. The cleaners allege that the cleaning company routinely failed to pay them minimum wage and overtime as well as failed to pay for time worked through meal breaks. One employee alleged that one of her paychecks resulted in pay of just over $4 per hour. The cleaners also alleged that the cleaning company allotted a set amount of time to clean each store and if the cleaners took more time than allotted they were not paid for the extra time.

While the federal court has yet ruled on whether the cleaning company is liable for unpaid wages and overtime, it did rule that the case could proceed as a collective action and other employees would be permitted to join the case. The court stated:

The FLSA authorizes employees to bring a collective action against employers for minimum wage and overtime violations. Courts have discretion, in “appropriate cases,” to facilitate the opt-in process by conditionally certifying a class and authorizing court-supervised notice to potential opt-in plaintiffs. To proceed with a collective action, plaintiffs must demonstrate that they are similarly situated to the proposed FLSA class. Determining whether plaintiffs are similarly situated to the proposed class requires a two-step inquiry. First, the court determines whether the class should be conditionally certified for notification and discovery purposes. The plaintiffs need only establish at that time a colorable basis for their claim that the putative class members were the victims of a single decision, policy, or plan. Determination of class status at the notice stage is granted liberally because the court has minimal evidence for analyzing the class.

Overtime Lawsuit Filed Against Adams Tile & Terrazzo, Inc. and its Owners for Failure to Pay Overtime to Their Floor Installers

Published on: July 19, 2015 | by Martin & Martin, LLP

On February 23, 2015, the firm Martin & Martin filed a collective/class action against Athens, Georgia based company Adams Tile & Terrazzo, Inc. and its owners Reuben Adams and Scott Adams. The Complaint alleges that the company’s floor installers were required to work more than forty hours per week and were not paid at a rate of one and one-half times their regular rate. The Complaint states that the company would assign a group of workers to a particular project and the workers traveled to the customer’s location and installed the flooring. Jobs typically ranged from between five to seven days. The Complaint alleges that the company compensated the floor installers on an hourly basis and required them to work more than forty hours per week but did not pay the floor installers time and one-half for all hours over forty.

The employees seek to recover unpaid wages, liquidated damages (“double damages”), and attorneys’ fees and costs. If you worked for Adams Tile and were not paid for your overtime work, contact us immediately. The statute of limitations continues to run until you join the case.

Are Per Diem Payments Included In The Calculation Of An Employee’s Hourly Rate For Overtime Purposes?

Published on: February 25, 2015 | by Martin & Martin, LLP

The Fair Labor Standards Act (“FLSA”) mandates that companies compensate their non-exempt employees at an overtime rate of one and one-half times their “regular rate.” Section 207(e) of the FLSA requires companies to include “all remuneration for employment” in calculating the employee’s overtime rate. The calculation of an employee’s “regular rate” can be simple for employees who work at a straight hourly rate without any additional compensation. However, what happens when employers also compensate their employees with a per diem? Is the employee permitted to use the per diem amount to raise his regular rate and thus raise his overtime rate?

The Department of Labor (“DOL”) says that there are situations in which an employee is permitted to include his per diem payments in calculating his overtime rate. The DOL regulations state that employers may be required to include the per diem into the overtime calculation when it compensates employees a per diem that is tied to the number of hours worked by the employee or for expenses on a flat rate per day/week basis regardless of whether the worker incurred the expenses versus a per diem that reasonably approximates an employee’s expenses, e.g. a per diem that specifically covers an airline ticket or lodging.

How would a per diem affect an employee’s overtime rate? An example would be if an employee’s hourly rate is $20 per hour and he receives no hourly or flat rate per diem, his overtime rate is $30 (time and one-half of the $20 regular hourly rate). Therefore, if the employee works 60 hours in a given workweek, he is entitled to a total of $1,400 (60 hours at $20 and 20 hours at $10 overtime premium). However, if the same employee works 60 hours and also receives a weekly flat rate per diem of $200, his regular rate jumps from $20 per hour to $23 per hour. While this may not seem significant, it can be when it is owed for a period of weeks, months, or years.

Class Overtime Lawsuit Filed On Behalf Spectrum Financial’s Accenture Contract Administrators

Published on: January 12, 2015 | by Martin & Martin, LLP

Our law firm has filed an overtime lawsuit against Spectrum Financial Services, LLC pursuant to the Federal Labors Standard Act (“FLSA”). The federal lawsuit alleges that Spectrum Financial, a national staffing company, hired individuals across the country to work for its client, Accenture, as contract administrators. The Complaint alleges that Spectrum paid these individuals an hourly rate but illegally failed to pay them time and a half for overtime hours (all hours over forty in a given work week). The Complaint also alleges that Spectrum classified some of its Accenture contract administrators as employees and illegally classified some of its Accenture contract administrators as independent contractors.

The Complaint was filed as a “class or collective action” on behalf of all Accenture contract administrators. This means that all other individuals who worked as Accenture contract administrators within the last 3 years may join the case — including those that Spectrum improperly classified as independent contractors.

The lawsuit seeks not only recovery of the unpaid overtime but also liquidated damages and attorneys’ fees and costs. Liquidated damages are known as “double damages” and permit successful individuals to double their unpaid overtime compensation.

One Year Until New Rules Start For Minimum Wage And Overtime Pay For Home Health Care Workers

Published on: November 19, 2013 | by Martin & Martin, LLP

This fall, the Department of Labor (“DOL”) announced that starting in January 2015 it would extend the minimum wage and overtime pay laws to home health care workers in all states. These workers, currently classified as exempt from minimum wage and overtime, provide care to the disabled and elderly populations with at-home tasks including taking prescriptions, bathing, and eating. The new minimum wage and overtime pay laws will apply to home health aides, certified nursing assistants, and personal care aides that work in the homes of the elderly or disabled. The new federal compensation laws, however, will apply only to home healthcare agencies and not to workers who visit the elderly for companionship and/or are employed directly by the individual/family needing the care. This means that direct care workers who perform medically-related work for which training is required who work through an agency will be entitled to minimum and overtime wages.

While these laws may be new to most states, as many as fifteen states already have state laws requiring that the state minimum wage and overtime rules apply to home health care workers and as many as six other states and Washington, D.C. require the application of minimum wage laws to home health care workers but not overtime. As of January 2015, however, health care workers across the country will be able to recover minimum and overtime wages. As a result of the new, higher wages, organizations like the AARP hope older Americans will receive better, more trained care.

Overtime wages for home health care workers will be calculated at one and a half times their regular rate of pay for all hours over 40 in a given workweek. This means that for hours 1 – 40 in a workweek, a health care agency will be required to compensate its workers at least minimum wage ($7.25) and for all hours over 40 in a workweek, the health care agency will be required to compensate its workers at one and a half times their regular hourly rate.

Detail And Car Wash Company To Pay $230,000 In Unpaid Minimum Wage And Overtime

Published on: January 24, 2013 | by Martin & Martin, LLP

After investigation, the Department of Labor (“DOL”) announced that current and former car wash and detail employees at a Texas car washing and detailing company that provides services to car dealerships would receive almost $230,000 in unpaid minimum wage and overtime pay. The DOL found that the company violated the FLSA’s overtime and minimum wage provisions by not compensating the employees all of the pay that they were entitled.

The car wash and detail company was found to have a timekeeping system that always rounded the employees’ time in the employer’s favor which resulted in employees not being paid for all hours worked violating the $7.25 per hour minimum wage regulations. Additionally, the car wash and detail company also failed to compensate employees at an overtime rate of time and one-half of their regular rate for all hours over 40 hours in a workweek.

The FLSA requires companies to compensate its hourly employees at least the minimum wage rate of $7.25 per hour and an overtime rate of at least time and one-half for all hours over 40. The FLSA also does not permit employers to use timekeeping systems that round an employee’s time so that it is always rounded in the favor of the employer. For example, if an employer’s timekeeping system consistently rounds its employees’ hours down, the employer could be found in violation of the FLSA for failing to pay its employees for all hours worked.