Atlanta Overtime Lawyers Blog

Directory Assistance Company kgb USA, Inc. Must Pay $1.3 Million In Owed Minimum Wage To Wrongly Classified “Independent Contractors”

Published on: February 12, 2013 | by Martin & Martin, LLP

Federal Judge Gardner of the United States District Court for the Eastern District of Pennsylvania ordered kgb USA, Inc. to pay $1.3 million in minimum wage for violations of the Fair Labor Standards Act (“FLSA”). Kgb USA is the world’s biggest provider of directory assistance which hired workers to respond to text messages from the company’s customers. The workers worked out of their homes throughout the United States.

The federal court found that the company misclassified the home workers as independent contractors rather than employees. As employees, the workers were entitled to at least minimum wage of $7.25 per hour. However, the investigation found that the company paid the workers on a piece rate basis based upon the amount of text messages to which they responded regardless of the number of hours they worked. When the workers’ hourly rate was calculated, it was discovered that the company was not providing the workers with at least $7.25 per hour in violation of the FLSA.

Acting Secretary of Labor Seth Harris stated that “misclassification of workers as independent contractors is a serious threat to their livelihood. Misclassifying workers also undercuts responsible employers who must compete with unscrupulous employer who do not obey the law.”

Frequently Asked Question No. 1: What Is The Statute Of Limitations For Overtime Claims?

Published on: January 29, 2013 | by Martin & Martin, LLP

One of the most asked questions our firm receives is what is the statute of limitations for overtime claims or how far back can an employee seek unpaid overtime? The answer is that depends on the case. Employees can automatically seek damages for the previous 2 years. However, in some cases, the FLSA allows employees to go back 3 years for unpaid overtime.

Two Year Period: All overtime cases allow an employee to seek unpaid wages for the previous 2 years. This means that from the date you file your overtime lawsuit, you can seek unpaid wage for the 2 years prior to the date of filing the lawsuit.

Three Year Period: The FLSA extends the statute of limitations from 2 years to 3 years for cases in which the employer’s violation is willful. A court will find an employer’s violation is willful if the employer knew or showed reckless disregard for whether its conduct was prohibited under the FLSA. Two specific examples include:

Judgments Require Restaurants To Pay Over $1 Million In Back Wages

Published on: January 26, 2013 | by Martin & Martin, LLP

As part of the Department of Labor’s (“DOL”) continued focus on restaurant employees, a chain of three restaurants in New York have been ordered to pay over $1,000,000 in back wages including minimum wage and overtime. The DOL’s investigators found that the restaurant employees employed as servers and kitchen staff were not paid wages of at least hourly minimum wage and not paid proper compensation for overtime. The investigation also revealed that the restaurants kept inaccurate and incomplete records pay and hours of the employees.

Under the federal Fair Labor Standards Act (“FLSA”), restaurant employees must be compensated at least minimum wage of $7.25 per hour and one and one-half times this rate for overtime hours – all hours over 40 in a workweek. Under the FLSA, restaurants are also allowed to pay tipped workers $2.13 per hour plus tips. However, their tips must be high enough to allow the workers to make at least $7.25 per hour.

Restaurant employees are regularly underpaid for their work and their recovery under the FLSA can be substantial. Restaurant employees (servers, waiters/waitresses, hosts/hostesses, bartenders, bussers, barbacks, kitchen staff, etc.) can learn about their rights to pay under the FLSA by contacting Atlanta overtime attorneys.

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.

Overtime Lawsuit Filed On Behalf Of Mortgage Loan Modification Processors Paid On A “Piece Rate” Basis.

Published on: January 3, 2013 | by Martin & Martin, LLP

On December 1, 2012, the law firm filed an overtime lawsuit on behalf of mortgage modification processors who were not paid overtime. The complaint alleges that the loan processors were paid a set fee for each stage the file was in as of payday but that they were not compensated an additional amount for hours worked over 40 in a workweek in violation of Section 216(b) of the Fair Labor Standards Act of 1938 (“FLSA”).

For example, the processors were paid $100 for each file that was approved for mortgage modification by the lender, $20 for each file that was denied for modification by the lender, $50 for each file for which the lender postponed a foreclosure, etc. However, although the processors allege that they worked well over 40 hours each week, their pay did not change to compensate for overtime hours.

Under the federal FLSA overtime laws, being paid per file or per job is called “piece rate” pay. Compensating employees on a piece rate basis is allowed under the FLSA. However, employers must still pay piece rate employees for overtime work. These employees are entitled to one-half of the regular rate of pay for each overtime hour plus the amount of their regular piece rate pay. This means that if an employee who is paid on a piece rate basis works 50 hours in a workweek and earns $500, their regular hourly rate amounts to $10. Therefore, the piece rate employee would be entitled to an additional $5 per overtime hour or a total of $50 for that week.
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Court Grants Conditional Certification For Overtime Case In Behalf Of Assistant Store Managers Of Burlington Coat Factory

Published on: December 23, 2012 | by Martin & Martin, LLP

Recently, a United States federal district court granted employees’ request for conditional certification in an overtime case filed by assistant store managers (“ASM”). The ASM filed an overtime collective action alleging that Burlington Coat Factory failed to pay them overtime wages for the hours they worked over 40 in a workweek. The ASM asserted that their employer misclassified these salaried employees as exempt from overtime but, in fact, the ASM were nonexempt and entitled to overtime. The employees sought permission to send notice about the lawsuit to all other similarly situated employees so that they could join.

The Fair Labor Standards Act (“FLSA”) requires employers to pay its employees overtime pay for all hours worked over 40 in a workweek. There are some exemptions to the FLSA overtime rules, including an exemption for executives. However, although the ASM in the Burlington case were called “managers,” they argued that they were entitled overtime because their job requires little skill and their duties and responsibilities do not include any real managerial responsibilities or the exercise of independent judgment. The managers also argued that they did not have authority to hire or fire other employee and that they spent the majority of their time performing work typical of the other employees like working on the sales floor, opening boxes, ticketing merchandise, stocking shelves, cashiering, unloading trucks, and cleaning the bathrooms.

The federal district court hearing the case agreed with the ASM to conditional certify the overtime case as a collective action pursuant to the United States Supreme Court case Hoffman v. La Roche as well as the legislative purpose of Section 216 of the FLSA. This means that the employees will be permitted to send notice of the lawsuit to other managers about their rights to join the lawsuit and seek their overtime pay.
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Department Of Labor Targets Illegal Pay By Restaurants

Published on: December 20, 2012 | by Martin & Martin, LLP

This year, the Department of Labor (“DOL”) focused on restaurants to determine whether restaurant employees were properly paid. The response was a resounding statement that the restaurant industry is vulnerable for minimum wage and overtime violations under the Fair Labor Standards Act (“FLSA”).

One problem is that restaurant employees do not know that their rights are being violated. Restaurant employees are some of the lowest paid employees in the nation and are paid even less when restaurants violate the FLSA when paying them. It’s important that restaurant employees learn how they should be paid under the FLSA. Hourly restaurant employees must be paid at least $7.25 per hour and one and one-half times this hourly rate for all hours over 40 in a workweek. The FLSA allows restaurants to compensate tipped employees just $2.13 per hour plus tips as long as their regular rate is at least minimum wage. Also, the federal regulations allow restaurants to require their tipped employees to participate in tip pools. These tip pool regulations are very specific and only allow certain employees to participate in the tip pools.

As part of the DOL’s restaurant investigation, Pancho’s Mexican Restaurant I, II and III – and Papa’s and Beer Mexican Restaurant agreed in October to pay 85 employees $485,913 in back wages due to minimum wage and overtime FLSA violations. The federal violations included paying kitchen staff a set salary without regard to the number of hours the employees worked and not providing additional compensation to tipped employees whose $2.13 per hour plus tips did not always equal at least minimum wage for each hour worked.

Bank Owes More Than $1 Million In Overtime Pay

Published on: December 18, 2012 | by Martin & Martin, LLP

The First Republic Bank is paying over $1 million in overtime pay to 392 bank employees who were wrongly classified as exempt from overtime. The employees are a mix of bank administrative and professional employees whose job duties do not meet the Fair Labor Standards Act’s (“FLSA”) exemptions from overtime. The bank employees in California, Connecticut, Massachusetts, New York, and Oregon are entitled to one and one-half times their regular rate for all hours worked over 40 in a workweek making the bank pay out over $1 million in back wages.

The FLSA provides exemptions to overtime for some types of employees, i.e. outside sales, bona fide executive, administrative, and professional. However, employers regularly misclassified salaried employees as exempt when the employees do not actually met the exempt tests set out by the FLSA regulations. In order to determine whether a salaried employee is exempt from overtime is based on the employee’s job duties – not their job title.

The bank was also found to be in violation of the FLSA’s regulations that require employers to count bonus payments when calculating an employee’s overtime pay. In order to calculate overtime, an employer must calculate an employee’s regular rate – essentially, their hourly rate. However, the employer must include bonus payments, commissions, and incentive pay when determining this hourly rate which would raise the hourly overtime rate for non-exempt employees.

Can Restaurants Require Servers And Bartenders To Pay Credit Card Fees?

Published on: December 14, 2012 | by Martin & Martin, LLP

The federal tipped employee regulations allow restaurants to pay servers and bartenders $2.13 per hour plus tips as long as those tips bump up the worker to at least minimum wage per hour. A question that arises is whether restaurants are permitted to deduct anything from the bartenders or wait staff’s pay to cover credit card fees. In order to accept credit card sales, restaurants agree to pay the credit card companies a fee. This fee is usually between 1.5% – 3% of total credit card sales and restaurants are starting to deduct these fees from the pay of its wait staff and bartenders. Is this legal?

Federal courts have held that restaurants can deduct fees from waiters and waitresses’ tips, however, it can only deduct the amount of the credit card fee associated with the tip – not the sales – and it can only deduct fees from credit card purchases – not cash sales. This means, at the end of each shift, the restaurant would look at total amount of credit card tips received by a server and it may deduct 1.5% – 3% for the costs in converting the tip.

Many restaurants, however, charge the wait staff a fee that is based on the servers’ total credit card sales. This is illegal because it is not the servers’ responsibility to cover all of the credit card fees charged to the restaurant. If the fee with the credit card companies is 2%, federal district courts have ruled that a restaurant can only deduct 2% of the servers’ tips.

Are You A Server, Waiter, or Bartender Required To Participate In A Tip Pool?

Published on: December 10, 2012 | by Martin & Martin, LLP

The area of tip pool litigation is one that has gained a lot of attention over the last few years as restaurant employees learn how they are supposed to be properly paid under the Fair Labor Standards Act (“FLSA”). First, federal regulations allow restaurants to pay their tipped employees as little as $2.13 per hour plus tips as long they make enough tips so that their hourly wage is at least minimum wage ($7.25). In other words, if you add up the $2.13 per hour for the week plus the amount of tips received for the week and divide it by the total number of hours worked, you will find an hourly rate. This hourly rate must be at least minimum wage. Also, the FLSA requires that for all hours over 40 in a workweek, the hourly rate must be at least minimum wage and a half.

Second, federal regulations allow restaurants to require their wait staff and other tipped employee to participate in a “tip pool.” However, only certain types of employees may participate in the tip pool. The FLSA says say that the employees in the tip pool must be employees who “customarily and regularly receive tips.” This means only employees like servers, waiters, bartenders, barbacks, food runners, and host/hostesses may receive money from the tip pool. Tipped employees may not be required to share their tips with employees who do not customarily and regularly receive tips.

Sometimes employers will illegally include other employees in tip pools to help cover that employees’ hourly wage. For example, a restaurant violates the FLSA if it collects tips from the servers and bartenders and then distributes some of the tips to kitchen workers. Sometimes restaurants even collect tips from servers and bartenders and then deduct a portion of the tips to cover overhead expenses like uniforms, broken glasses, etc. This also violates the FLSA tip pool laws. ALL of the tips collected in the tip pool must be given to the tipped employees and cannot be used to cover restaurant expenses.

If a restaurant violates the FLSA tip pool rules, it could end up owing its employees the difference between $2.13 (which was paid) and minimum wage for every hour the employee worked. Employees may also be able to recover liquidated damages which are essentially double damages – courts will double the amount of an employee’s owed wages.
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