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There have been a number of cases and settlements throughout the country over the last few years involving healthcare workers who are required to work through lunch breaks but whose employer automatically deducts time for lunch each day. Pursuant to the Fair Labor Standards Act, in order to deduct time from an employee’s time records for a lunch break, the break must be uninterrupted – meaning that the employee is not performing any work. As nurses and other employees with direct patient care responsibilities will tell you, uninterrupted lunch breaks are difficult if not impossible.

One fairly recent settlement involved a hospital in Wisconsin. The settlement totaled over $1,000,000 to compensate all non-exempt professional/technical employees employed by St. Elizabeth Hospital from February 10, 2012, until February 9, 2014, with direct patient care responsibilities whose scheduled hours included an automatic deduction for unpaid meal breaks and who worked in the following departments:

• East Region Nursing Float Pool

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Nowadays, many employers use an automatic 30-minute meal period deduction in its time keeping program that automatically deducts 30 minutes of time per shift. Sometimes, employees do not even realize that their employer is deducting 30 minutes from their time cards each day. However, what happens when an employee continues to work through these 30 minute meal breaks? While federal courts have ruled that automatic meal break time keeping programs do not per se violate the Fair Labor Standards Act (“FLSA”), the burden remains solely on the employer to maintain accurate records of its employees’ hours.

Federal courts have held that where an employer knows or has reason to believe that an employee is continuing to work through the meal break, the time must be considered working time. Where an employer knows or has reason to believe an employee is working through meal breaks, the employer cannot stand idly by and allow an employee to perform overtime work without proper compensation – even if the employee does not make a claim for the overtime compensation.

Employees should carefully review their time records to make sure the records accurately show the hours that they worked. If their employer is automatically deducting meal breaks from the time records and the employee is not actually taking a break, the employee could not only be entitled to lost wages and overtime pay but also liquidated damages (“double damages”) and attorneys’ fees and costs.

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The Tampa District Office of the Department of Labor Wage & Hour Division found that the restaurant, Hibachi Buffet, failed to properly pay its servers and kitchen workers under the Fair Labor Standards Act (“FLSA”). The investigators found that the restaurant violated the overtime, minimum wage, and record keeping requirements of the FLSA. The restaurant did not pay its kitchen employees overtime pay for the hours worked beyond 40 in a workweek and did not compensate its servers beyond tips, room and board.

The restaurant agreed to pay 12 employees over $48,000 in back wages plus an equal amount in liquidated damages for a total of over $97,000. Under the FLSA, employers can be required to not only pay back wages but also “liquidated damages” which are also call “double damages” because they double the damages entitled to employees.

The DOL stated that “[u]nderpaying and improperly paying workers cheats them out of their hard-earned income and puts those responsible employers, who play by the rules, at a competitive disadvantage. We strongly encourage workers who may be in similar situations, where their employer is not paying overtime after 40 hours of work in a workweek or paying the correct minimum wage pay, to contact us with the knowledge that the information they share is kept confidential under the maximum extent of the law.”

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The administrative exemption of the Fair Labor Standards Act (“FLSA”) is one of the most litigated areas of overtime law. Because the administrative exemption regulations can be confusing, it provides a prime opportunity for employers to violate the law. One of the elements of proving the administrative exemption is evidence that the employee exercised discretion and independent judgment with respect to matter of significance.

In order to establish the narrowly construed affirmative defense of the administrative exemption, employers must also show, with clear and convincing evidence, that the employee’s primary duty involved the performance of exempt work involving “the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200. Such work is defined as involv[ing] the comparison and evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.” 29 C.F.R. § 541.202(b). Additionally, the following factors should be considered when determining whether an employee exercises the requisite discretion and independent judgment:

whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects the business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances. 29 C.F.R. § 541.202(b).

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On July 6, 2015, the United States Department of Labor announced it proposed rule to update and increase the salary requirement for an employee to be classified as exempt from overtime. Currently, the executive, administrative and professional exemptions to the FLSA require that the employee make at least $23,660 a year to qualify for the exemption. However, the DOL stated that this would fall below the poverty line for a family of four. The DOL stated that as it stands, “a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more … and not receive a dime of overtime pay.” The proposed rule would increase the minimum salary from $23,660 per year to $50,440 per year. Thus, there is a significant need to increase this minimum salary requirement to protect hard-working Americans.

The DOL’s proposed rule change states:

The Fair Labor Standards Act (FLSA or Act) guarantees a minimum wage and overtime pay at a rate of not less than one and one- half times the employee’s regular rate for hours worked over 40 in a workweek. While these protections extend to most workers, the FLSA does provide a number of exemptions. The Department of Labor (Department) proposes to update and revise the regulations issued under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. This exemption is referred to as the FLSA’s “EAP” or “white collar” exemption.

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If an employer fails to pay an employee overtime under the Fair Labor Standards Act (“FLSA”), the question turns to how to calculate damages. Non-exempt employees are entitled to time and one-half for all hours over forty in a workweek. Under the FLSA, the statute of limitations permits an employee recover two years’ worth of overtime plus liquidated damages (“double damages”) and attorneys’ fees and costs.

An employee, however is allowed to recover three years’ worth of overtime if the employee can prove by a preponderance of the evidence that the employer “willfully” violated the FLSA or show reckless disregard for the law. Reckless disregard can be shown by the employer’s failure to make adequate inquiry into their pay practices. In the 11th Circuit Court of Appeals, the question of willfulness and good faith presents a related inquiry, and “the judge and jury answer what is essentially the same question for two different purposes.” (citation omitted). First, the “willfulness or good faith question is answered … by the jury to determine the period of limitations….”

For an employer to avoid liquidated damages a/k/a “double damage,” the employer bears the burden of establishing both the subjective and objective components of that good faith defense against liquidated damages. “Subjective good faith means the employer has an honest intention to ascertain what the FLSA requires and to act in accordance with it.” “Objective good faith means the employer had reasonable grounds for believing its conduct comported with the FLSA.”

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On February 2, 2015, a former employee of Golden Homes Services in Atlanta, Georgia filed a lawsuit alleging that Golden Homes violated the Fair Labor Standards (“FLSA”) by failing to pay time and one-half overtime to its Certified Nursing Assistants (CNA). The former CNA alleged that Golden Homes was a staffing company that placed CNAs in its client’s assisted living facilities and similar type facilities.

The former employee alleged that the CNAs saw a number of patients per day at these facilities and worked more than forty hours per week. The former employee alleged, however, that Golden Homes did not compensate the CNAs at a rate of time and one-half for all hours over forty and therefore, owed its CNAs unpaid overtime, liquidated damages, and attorneys’ fees and costs. After the filing of the overtime complaint, the case between the former CNA and Golden Homes settled.

Under the FLSA, hourly employees must be paid time and one-half for all hours over forty in a work week. If you were not paid overtime, you not only are entitled to back pay but also liquidated damages a/k/a double damages that double the amount of your back pay. Additionally, you are entitled to attorneys’ fees and costs. For more information, contact us.

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One area of the Fair Labor Standards Act (“FLSA”) that can confuse employers and employees is the on-call rules. The question is whether the employee is actually working while they are on-call or so restricted from using their time for their own use. The general analysis looks to whether the conditions placed on the employee are restrictive or non-restrictive.

Restricted conditions restricts the employee from effectively using the time for personal use. For example, the FLSA regulations state that if the on-call nurse was burdened with calls from the employer such that the calls prevent free use of time, or the conditions impede the nurse from using the time effectively for personal use, then the on-call time could be considered hours worked and entitled to compensation. 29 C.F.R. § 785.17.

On the other hand, non-restricted conditions permit an employee to use time effectively for their own personal use while on-call. For example, an employee may be required to carry a cell phone and return to the employer’s premises within thirty minutes after being called, but the employee is free to do what he wants to do during that time, e.g. hang out with friends, run errands, sleep, etc. If the employee is able to use the on-call time effectively for their own purposes the on-call time is not considered work time. 29 C.F.R. § 785.17.

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The Fair Labor Standards Act (“FLSA”) is the law that governs employee’s pay including minimum wage and overtime. One question that frequently arises is whether under the FLSA, an employee is entitled to meal or rest breaks and the answer is “no.” However, employers typically offer these breaks to its employees and the FLSA governs whether and how the time spent on these breaks is considered work time.

Short breaks of less than 20 minutes are compensable and count as work time towards calculating pay. Additionally, federal law states that while longer breaks are not counted towards overtime, the breaks must be a “bona fide” break. This means that the employee must be completely relieved from their job duties. They cannot speak to customers, answer the phone, use their computer for work purpose, meet with co-workers about work, etc. If an employee continues to work during their break then the time must be counted towards overtime.

If you are working through your breaks, contact us for an immediate, free consultation.

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In April, 2015, Martin & Martin filed a lawsuit against a nursing staffing company alleging that the company did not properly pay its staffing coordinators. The employees allege that as staffing coordinators they were required to work on-call hours filling open shifts and ensuring appropriate coverage of clients. The Complaint alleges that the staffing coordinators worked at least forty hours per week at the office Monday through Friday and then were required to handle on-call shifts covering after hours during the week and all day and night during the weekends responding to calls regarding caregiver issues.

The Complaint alleges that the company did not include the on-call time in the calculation of hours worked by the employees violating the Fair Labor Standards Act (“FLSA”) for failing to meet the requirements for any of the exemptions from application of the overtime compensation requirements of the FLSA under 29 U.S.C. §§ 207 or 213. The staffing coordinators seek unpaid overtime, liquidated damages (“double damages”) and attorneys’ fees and costs.

For more information about this lawsuit, contact us.