Archive for the ‘FLSA’ Category

DOL Sues Employer for Unpaid Pre- and Post-Shift Work

by HDlawblog Posted: Monday, 7/11/2016

The Department of Labor (DOL) filed a lawsuit against Five Star Automatic Fire Protection in the Western District of Texas on July 7th, alleging the company failed to properly compensate its workers for labor they performed prior to and following their standard shifts. The DOL is seeking $321,000 in back pay and damages—a sharp reminder that the Fair Labor Standards Act (FLSA) requires employers to fully compensate their employees for all the work they do, including work done before and after they are on the job site.

The DOL’s attempted application of the rule is not new or even surprising, but it should grab employers’ attention, because it is a prime example of the type of wage and hour practices that put an employer on the wrong end of a costly lawsuit.

According to the DOL complaint, Five Star required its workers to begin their day at its office, where they loaded materials into a company vehicle before driving to the job site. After they were done at the jobsite for the day, Five Star required them to return the company vehicle to the office. The DOL has filed a complaint because it alleges Five Star did not compensate employees for this pre-shift and post-shift work.

FLSA requires employers to pay employees for all hours worked. Generally, any activity performed for an employer, whether it is done on the job site, at the office, or even off work premises, counts as time worked if the employer knows or has reason to believe work is being done. Activities such as preparing materials integral for work—the kind of pre-shift and post-shift work performed in this case—must be compensated as work. Even if Five Star did not intend to purposefully shortchange its workers, that fact alone will not shield it from liability. Remember: An employer must pay workers for all hours the employer knew or “should have known” the employee worked, and for hours that exceed 40 in a workweek, the employer must pay time-and –a-half. The unpaid pre-shift and post-shift hours, if properly counted, most likely cause the employees’ hours worked to exceed 40, and therefore the failure to pay for both the hours and overtime hours worked may be deemed a significant violation.

Employers can avoid placing themselves in Five Star’s position by ensuring that all hours are recorded accurately and that employees are not performing work outside of the time they are clocked in. Contractors can give their employees an option of riding to the jobsite in a company vehicle but employees cannot be allowed to perform any work before they arrive at the jobsite—or they will be in the same position as Fivestar is in this case.  If you have any questions about travel policies or any other FLSA issues, please contact us at Harmon & Davies, P.C.

This article is intended to provide general information, not a specific legal opinion or advice. Any particular questions should be directed to your legal counsel. If you do not have legal counsel, please feel free to contact Harmon & Davies, P.C.

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SCOTUS Denies DOL Deference: Will it do the same for EEOC?

by HDlawblog Posted: Friday, 6/24/2016

On June 20, 2016, in Encino Motorcars, LLC v. Navarro, the Supreme Court decided not to defer to a US Department of Labor (DOL) rule that declared car dealerships’ service advisors eligible for overtime pay under the Fair Labor Standards Act (FLSA). Instead, in a 6-2 opinion, the Court found that the DOL did not provide a sufficient explanation as to why it departed from its long standing position that service advisors were ineligible for overtime under FLSA. The Court found the DOL’s scant rationale for its rule change impermissibly “conclusory” and sent the case back to the Ninth Circuit, leaving it to that court to determine, without deferring to the DOL rule, whether the FLSA overtime exemption covers service advisors.

As Justice Ginsburg noted in her concurring opinion, this ruling does not change the state of the law. Federal agencies have long been required to provide an “adequate reason” to justify a change in policy. However, the Court’s enforcement of that requirement serves as a potent reminder that it will not rubber stamp every new rule or interpretation an agency passes down.

The Court’s willingness to defer to an agency may very well become the central issue in the continually escalating dispute over whether Title VII and Title IX’s bar on sex discrimination includes discrimination on the basis of gender identity and sexual orientation.

While Title VII protects employees from discrimination and Title IX protects students, the laws are so similar that courts often look to rulings on one to help interpret the other. For that reason, although the highest appellate court decision on the gender identity issue, G.G. v. Gloucester County School Board, is a Title IX case, its eventual resolution may provide guidance as to the validity of the EEOC’s recent positions that discrimination on the basis of sexual orientation, which it has alleged in two recent suits, and on the basis of gender identity, a position the EEOC first enforced back in 2012, amounts to impermissible sex discrimination under Title VII.

Gloucester County School Board indirectly supports the EEOC’s positions. Applying the Auer doctrine, which instructs courts to give deference to an agency’s interpretation of its own ambiguous regulations unless the interpretation is unreasonable, the Fourth Circuit Court of Appeals determined that it owed the US Department of Education’s (DOE) interpretation of Title IX “controlling weight.” The DOE’s interpretation defined sex discrimination as inclusive of discrimination on the basis of gender identity, which contradicted the School Board’s policy of separating bathrooms by birth sex.

The School Board has announced its intention to appeal the Fourth Circuit’s decision to the Supreme Court. How the Court would rule is far from obvious: Though the Encino decision suggests the Supreme Court is not always amenable to deferring to an agency, the Court did recently pass up the opportunity to hear a case in which it could have overturned Auer. In the end, the Court may choose not to rule on an issue as decisive as the expansiveness of sex discrimination under Title VII and IX until it has regained a ninth justice. In the interim, expect the EEOC to continue enforcing its own interpretation.

For more information, contact an attorney at Harmon & Davies, P.C.

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Posted in FLSA, Labor & Employment, Sex discrimination, Sexual orientation discrimination | Comments Off on SCOTUS Denies DOL Deference: Will it do the same for EEOC?

Word to the Wise: Steer Clear of Overtime Violation Claims

by HDlawblog Posted: Monday, 4/8/2013

The $20.9 million settlement between Rite Aid Corp. and assistant managers and co-managers for overtime pay violations under the Fair Labor Standards Act and various state laws, which settlement was approved by the U.S. District Court for the Middle District of Pennsylvania earlier this year, should serve as a stark reminder that employers need to be ever vigilant in their efforts to properly classify and pay employees.

The attorneys at Harmon & Davies are here to assist employers with all of their labor and employment related needs, including their overtime and break policies and the proper classification of employees.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Pennsylvania Employers Can’t Use Fluctuating Workweek Method to Calculate Overtime

by HDlawblog Posted: Friday, 2/8/2013

A federal court recently held that Pennsylvania law does not allow for the fluctuating workweek method of paying overtime, which means that Pennsylvania employers who compensate non-exempt employees pursuant to this method shoudl revise their practices ASAP.  If they don’t, such employers might find themselves embroiled in overtime class action claims.

Here’s what employers need to know.  Wage and hour requirements are mandated at the federal and state level.  The federal government sets threshold wage and hour requirements, but states can enact more stringent requirements.  For employers, this means that you have to constantly monitor whether you are in compliance with federal wage and hour requirements and state wage and requirements.  For example, the federal minimum wage rate for non-exempt workers is $7.25 per hour.  It just so happens that Pennsylvania’s minimum wage rate is also $7.25 per hour,  but California employers have to pay non-exempt employees more because California’s minimum wage rate is $8.00 per hour.

On the federal level, the Fair Labor Standards Act (“FLSA”) dictates overtime and minimum wage requirements.  The FLSA’s state law equivalent in Pennsylvania is the Pennsylvania Minimum Wage Act (“PMWA”).  The FLSA and PMWA are similar, but not identical.

For example, under the FLSA an employer may compensate non-exempt employees pursuant to the “fluctuating workweek” method of overtime compensation.  Under this method, an employee receives a guaranteed fixed weekly salary for all straight-time earnings, regardless of the number of hours worked, and an additional one-half of the employee’s regular rate for all hours worked over forty in the workweek.  This method lets the employer divide an employee’s weekly salary by the number of hours actually worked to determine the regular rate.  As long as the regular rate is more than the minimum wage, FLSA regulations allow the employer to compensate any hours worked beyond 40 with not less than one-half the regular rate.  Here’s how the fluctuating workweek method works:

Gerald is an exempt employee who receives a weekly salary of $400 dollars.  In week 1 Gerald works 41 hours.  Gerald’s rate of pay for week 1 is 9.76 per hour ($400 divided by 41 hours).  Since Gerald worked one hour beyond 40 in week 1, the employer is only required to pay Gerald $404.88 ($400 plus half of $9.76).  In week 2 Gerald works 50 hours.  Gerald’s rate of pay for week 2 is $8.00 per hour ($400 divided by 50 hours).  Since Gerald worked 10 extra hours in week 2, the employer must pay Gerald $440.00 ($400 plus (10 times half of $8.00).  The advantage to employers is that so long as the regular rate is more than the minimum wage, the employer only has to compensate any hours worked beyond 40 with not less than one-half the regular rate.  So, the more hours the employee works beyond 40 per week, the cheaper the labor rate becomes for the employer.

 

However, in Foster v. Kraft Food Grp. Inc. a federal court recently held that contrary to the FLSA’s regulations, the PMWA’s regulations do not allow payment of only an additional one-half of the regular rate for overtime hours pursuant to the fluctuating workweek method.  Instead, Pennsylvania employees compensated under this method must receive an additional one and one-half of their regular rate for overtime hours.  For example, using the same example used above, in week 2 Gerald would have to be compensated $520 for the week ($400 plus ((1.5 x $8.00) x10).

On the heals of this decision, Kraft Foods Inc. agreed to pay $1.75 million to resolve two proposed class actions filed by employees who alleged that Kraft’s use of the federal fluctuating workweek method to calculate overtime violated the Pennsylvania Minimum Wage Act.  Because wage and hour claims can expose employers to costly class actions, employers should pay careful attention to how they calculate overtime payments.

The attorneys at Harmon & Davies are well versed in wage and hour requirements and routinely defend employers in wage and hour actions.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Another Employee Fails in Her Attempt to Pursue an FLSA Claim Involving Expressing Breast Milk at Work

by HDlawblog Posted: Friday, 12/28/2012

The passage of the Fair Labor Standards Act (“FLSA”) provision requiring employers to provide mothers a reasonable break time and private place to express breast milk has created fodder for a few lawsuits, one of which I blogged about not too long ago.  In another recent case (Miller v. Rosche Surety & Cas. Co.), the 11th Circuit, a federal court, held that a female employee who was fired after she sent a company executive an email asking where she could express breast milk, while temporarily working at a different office, did not have a viable retaliation claim under the FLSA because no reasonable jury could interpret her email as a protected complaint.  Allow me to explain:

The FLSA protects employees who engage in protected activity from retaliation by their employers.  A clear example of a protected activity would be a written complaint to an employer informing the employer that the employee believes his/her rights under the FLSA are being infringed upon and calling for protection of those rights, but rarely are complaints to employers so straightforward.  Therefore, to determine whether a complaint constituted a protected activity, the law asks whether a reasonable jury could interpret the complaint as protected activity.  And, according to a Supreme Court ruling in 2011 (Kasten v. Stain-Gobain Performance Plastics Co.) the highest court of our nation has even said that an oral complaint may trigger the FLSA’s anti-retaliation provision.  However, even an oral complaint has to have some degree of formality in order to give the employer fair notice that an employee is lodging a grievance.  Indeed, a complaint needs to be clear and detailed enough to put a reasonable employer on notice, considering the context and content, that an employee is asserting rights provided by the FLSA and calling for protection of those rights.

In the Miller case, a female employee who worked for a Florida bail bond company simply sent an email to a company executive asking about where she could use her breast pump while working somewhere other than her usual place of work.  The 11th Circuit held that this inquiry could not reasonably be construed as an FLSA complaint because the email did not put the employer on notice that the employee was lodging a grievance.  The 11th Circuit also held that the employee could not raise a triable issue regarding whether the employer violated the FLSA provision that requires employers to provide employees with a private place to express milk because the employee testified that she was given necessary breaks for this purpose and had access to a private place to do so while at her regular office.

Interestingly, the employee cited to a Family Medical Leave Act (“FMLA”) case to support her view than an employee’s “prospective request” that an employer comply with the FLSA is “protected activity” under the act.  However, the 11th Circuit distinguished the FMLA case in which it ruled that an employee’s pre-eligibility request for post-eligibility maternity leave was protected under the FMLA on the basis that the FMLA contains a provision making it unlawful for employers to “interfere with, restrain, or deny” an employee’s exercise, or attempt to exercise, any right provided by the FMLA while the FLSA lacks a comparable provision.

Finally, the employee unsuccessfully argued that because the employer monitored her email communications at work, an email that she sent to a friend under the subject line “Federal Law” that referenced the FLSA provision regarding expressing breast milk was akin to an FLSA complaint. The Court rejected this argument because the employee never showed the email to the employer and never told anyone at her company that she believed the company was violating the provision.  Therefore, the email to the employee’s friend did not effectively notify the company of her grievance.

Lesson for Employers:  Although this case ended well for the employer, employers should take issues surrounding expressing breast milk at work seriously.  In a case such as the one discussed above, the employer, knowing that the employee was pumping at work, might have chosen to proactively inform the employee where she could pump while working at the different location, which effort would have cast the employer in the best light possible.  For large employers, paying attention to the individual needs of each employee might not be possible, but larger employers might be able to designate lactation areas that eliminate the need for employees to inquire about suitable places to pump while visiting other offices or have written express breast milk policies that address how employees should handle pumping away from their regular place of work.  The attorneys at Harmon & Davies are here to assist employers with navigating issues surrounding expressing breast milk at work.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

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An Update for Employers on Employees’ Rights to Express Breast Milk at Work

by HDlawblog Posted: Tuesday, 12/4/2012

Not too long ago, the Patient Protection and Affordable Care Act (“PPACA”) amended the Fair Labor Standards Act (“FLSA”) to require employers to provide reasonable beak time for employees to express breast milk for nursing children and I immediately envisioned a slew of lawsuits related to this new requirement.  Under the PPACA, employers are required to provide employees with a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public.  For many employers this is easier said than done as many work environments present obvious challenges.  For example, where do employees pump when they are at construction sites, traveling in a car (particularly with a sales partner), or on a plane (think pilots and flight attendants)?

In Salz v. Casey’s Marketing Company, an employee working at a convenience store (a work environment not particularly conducive to pumping) returned from maternity leave and requested a private and secure place where she could express milk.   The employer allowed the employee to use a store office.  However, while expressing milk in the store office, the employee discovered that there was a functioning video camera in the room.  The employee alleged that she had never been told about the camera and she conveyed her discomfort about its presence.  According to the employee, the company failed to meaningfully respond to her complaint about the camera.  The company allegedly refused to disable the camera and simply told the employee to place a plastic bag over the video camera while she was pumping milk.

Thereafter, the employee was unable to relax with the camera in the office and experienced reduced milk production.  The employee alleged that when she complained, the company retaliated against her by reprimanding her for failing to fill an ice cream machine, failing to put hot dogs on the grill, and leaving dirty dishes.

Eventually the employee quit her job and filed a lawsuit in Iowa state court alleging that the company had denied her the right to express her milk in a secure and private place as required by PPCA’s amendment to the FLSA, that the company violated her common law right to privacy under Iowa law by installing and operating a camera in a room where the company knew she was expressing milk, and she asserted the company constructively discharged her in violation of the FLSA in retaliation for her complaints.  (Note: even though she quit, the law sometimes deems a company to have discharged an employee where it makes life for the employee so bad that the employee essentially has no other option but to quit).

The case was removed to federal court where the judge dismissed the employee’s claims for lactation rights on the basis that the PPACA did not create any private right of action against an employer that violates the requirement.  Rather, the PPACA gave the employee the right to file a complaint with the Labor Department, but not to initiate her own lawsuit.

However, the court held that the employee could pursue her claim for retaliation because the FLSA protected the employee from being retaliated against for complaining about the lack of an adequate place to express milk, noting that once an employer discriminates or discharges an employee in relation to an employee’s complaint about the employer’s express breast feeding policy, they have violated the FLSA.

Lesson for Employers:  Although the court said that an employee may not pursue a private right of action for being denied a secure and private place in which to express breast milk, Employers should take this issue seriously.  This includes instituting an express breast feeding policy, providing employees with a secure and private place in which to express milk, and taking seriously any complaints from employees about the adequacy of the designated space.

 

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Employee’s Failure to Report Overtime Thwarts Her FLSA Claim

by HDlawblog Posted: Monday, 11/12/2012

In a split decision, the Sixth Circuit recently held that a nurse’s failure to follow her employer’s procedures for reporting time spent working during an unpaid meal break was fatal to her Fair Labor Standards Act (“FLSA”) claim.  In White v. Baptist Mem’l Health Care Corp., the majority of the court found that the trial court’s dismissal of the employee’s case before trial was proper because her employer could not have known or had reason to know that the employee was not receiving pay for missed meal breaks as the employee was not using the employer’s exception log to record the extra time that she worked.  Additionally, the employee offered no evidence that the employer discouraged employees from reporting meal break work or that it was otherwise notified that employees were not reporting such work.

By way of background, before being hired, the nurse signed a document stating that she understood that unpaid meal breaks would be deducted from her paycheck, but that any time spent working during meal breaks had to be noted in an exception log in order for the nurse to be paid for that time.  The nurse acknowledged that in instances when she and her entire nursing unit reported working during a meal break, the hospital compensated her for that time.  However, the nurse also alleged that there were instances in which the hospital did not pay her when she individually worked through a meal break and reported it on the log.  Although, the nurse notified supervisors about missed meal breaks, she never complained to supervisors that she was being unpaid when she worked through her meal breaks–a distinction the Sixth Circuit found quite important.  Eventually the employee stopped using the exception log because she claimed that reporting missed meal breaks just seemed like an “uphill battle.”

Given these facts and circumstances, the Sixth Circuit, relying on case law from the Eighth, Fifth, and Ninth circuits, said that an employer that establishes a “reasonable process” allowing employees to report unpaid work time will not be liable for nonpayment where an employee does not follow that process because when an employee fails to follow the reasonable time reporting procedure, she prevents the employer from knowing its obligations to compensate the employee and thwarts the employer’s ability to comply with the FLSA.  Thus, the court found that there was no way for the hospital to have known that the employee was not being compensated for missing her meal breaks.  As such, the court held that the employee’s claim failed.

In so holding, the Sixth Circuit distinguished this case from cases where employers prevented employees from reporting overtime or where the employers were otherwise notified of the employee’s unreported work.  In this case, however, the employee presented no evidence that the employer discouraged her or other employees from reporting on exception logs the time they spent working during meal breaks, or that the hospital was otherwise notified of the unreported work.

Interestingly, the dissenting opinion notes that an employer violates the FLSA if it had actual or constructive knowledge that an employee worked without pay regardless of whether the employee has properly reported the time.  The judge writing the dissenting opinion felt that the employee had raised a triable issue regarding whether the employer had actual knowledge because, among other things, the supervisors knew the employee was working through lunch and complaining about it, and should have responded to the employee’s complaints by asking her to make sure she signed the exception log.  As such, the judge authoring the dissenting opinion felt that a reasonable jury could view such acts as supervisor pressure for the nurse not to report her missed breaks, which would point to constructive knowledge of unpaid time.

Lessons for Employers:  There are several things that employers should take away from this case.  First, employers should establish a reasonable process for employees to report unpaid work time.  Second, even though the court ruled in favor of the employer, it was a split decision with the dissent indicating that the employer should have responded to the employee’s complaints about working through her meal breaks by asking the employee to make sure that she followed the reporting procedure.  Accordingly, to be on the safe side, employers should train their supervisors to provide such a response in the event that there are complaints about working through breaks or working overtime and, to be be on the extra safe side, to record such exchanges in writing.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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