fair labor standards act

Courts Rule Alien Workers Have Rights Under FLSA

In March, 2013 Eleventh Circuit Court of Appeals held that “there is nothing in the [Fair Labor Standards (“FLSA”)] that would allow us to conclude that undocumented aliens, although protected by the Act, are nevertheless barred from recovering unpaid wages thereunder.”  Lamonica v. Safe Hurricane Shutters, Inc.  An undocumented alien’s “ability to recover unpaid wages under the FLSA does not depend upon his immigration status.” Four months later, on July 29, 2013, another federal appellate court, the Eighth Circuit Court of Appeals ruled that, “aliens, authorized to work or not, may recover unpaid and underpaid wages under the [Fair Labor Standards Act].”Lucas v. Jerusalem Cafe, LLC.

The United States Department of Labor’s policy was and is to enforce the FLSA “without regard to whether an employee is documented or undocumented.”

Although it is still unclear to the exact extent that these rulings will affect illegal alien workers, one thing is clear: the FLSA protects alien workers from being underpaid or unpaid.

Business Owner Found Personally Liable, Employment Law Case Study

The ruling issued by the US Court of Appeals for the Second Circuit against John Catsimatidis is an eye-opener to employers and business owners across the US. By holding Gristedes Supermarket owner, John Catsimatidis, personally liable for a Fair Labor Standards Act class action suit, the Court fundamentally redefined the meaning of ‘employer’ under FLSA guidelines. This ruling sets a new precedence that broadens the interpretation of ‘employer’ and District Courts may now apply this analysis in other contexts, which could have a significant impact on future cases.

Qualifying as an 'employer'

The Catsimatidis case originally began in 2004 as a class action lawsuit against various Gristedes Supermarkets’ corporate and individual defendants by several manager and co-managers working in the supermarket. The plaintiffs in the case claimed they were misclassified as exempt under NYLL and FLSA and were wrongfully denied overtime. Two years of litigation led to a settlement agreement of $3.5M by the supermarket to the plaintiffs in the case with $425,000 paid initially and following with 27-month installment payments thereafter. The defendants in the case defaulted on their settlement obligations and the plaintiffs subsequently sought enforcement of the settlement against Catsimatidis, Gristedes Supermarket owner, personally. The Court found that Catsimatidis qualified as an ‘employer’, and thus, held him personally liable.

The Appeal

Catsimatidis appealed this ruling, stating that he was merely a high-level executive and made only general corporate decisions. Catsimatidis argued that the FLSA defined an ‘employer’ as one who exercises day-to-day decision making within the business and that his role in the company did not qualify under that interpretation. To determine Catsimatidis’ capacity at Gristedes Supermarket, the Court endorsed a ‘totality of circumstances’ versus ‘operational control’ test and found that Catsimatidis exercised decision-making which directly affected the conditions of the employees’ employment and made general managerial decisions, including the responsibility for decisions in respect to employee wages.

What The Decision Means

Although this decision is quite notable because of its broadening definition of ‘employer’ under the Fair Labor Standards Act, this is still a case where circumstances played a significant role in the outcome. Had the corporate defendant not defaulted on their payment obligations, Catsimatidis would not have been held personally liable. Nonetheless, the ruling by the US Court of Appeals for the Second Circuit does prompt much food for thought.

If you think your rights have been violated or have questions about a potential case contact our New York City Employment Lawyers today.

FLSA Basics

I.          Misclassification as Exempt Under the federal Fair Labor Standards Act ("FLSA") some employees are exempt from receiving (or are not entitled to) overtime pay.

However, unless you qualify for one of the overtime exemptions, it is likely your employer should be paying you one-and-one half times your regular rate of pay for any hours you work in excess of forty hours per work week.  If you work more than forty hours per work week but do not receive overtime pay, and you do not qualify for any of the following exemptions, you may be misclassified and could be entitled to up to three years of unpaid overtime.

A.        Executive Exemption

In order to qualify for the FLSA's executive exemption, the following four tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
  • You must customarily and regularly direct the work of at least two or more full-time employees or their equivalent; and
  • You must have authority to hire or fire other employees, or your suggestions and recommendations as to hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

If your employer has classified you as exempt from the FLSA's overtime requirement under the executive exemption, but you do not meet all four tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

B.        Administrative Exemption

In order to qualify for the FLSA's administrative exemption, the following three tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be the performance of office or non-manual work directly related to the management or general business operations of your employer or your employer's customers; and
  • Your primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.

If your employer has classified you as exempt from the FLSA's overtime requirement under the administrative exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

C.        Professional Exemption

There are two types of professional exemptions under the FLSA: (1) the learned professional exemption; and (2) the creative professional exemption.

In order to qualify for the FLSA's learned professional exemption, the following four tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week;
  • Your primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominately intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
  • The advanced knowledge, discussed under number 2, must be in a field of science or learning; and
  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

If your employer has classified you as exempt from the FLSA's overtime requirement under the learned professional exemption, but you do not meet all four tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

In order to qualify for the FLSA's creative professional exemption, the following two tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week; and
  • Your primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

If your employer has classified you as exempt from the FLSA's overtime requirement under the creative professional exemption, but you do not meet both tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

D.        Highly Compensated Employees

If you perform office or non-manual work and you are paid a total annual compensation of $100,000 or more, which must include at least $455 per week, you are most likely exempt from the FLSA's overtime requirement if you customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee, discussed above.

E.        Computer Related Exemption

In order to qualify for the FLSA's computer related exemption, the following three tests must be met:

  • You must be compensated on a salary basis at a rate not less than $455 per week or be compensated on an hourly basis at a rate not less than $27.63 an hour;
  • You must be employed as a computer system analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field; and
  • Your primary duty must consist of at least one of the following: (1) the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; (2) the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; (3) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (4) a combination of the aforementioned duties.

If your employer has classified you as exempt from the FLSA's overtime requirement under a computer related exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

Note: the FLSA's computer employee exemption does not include employees engaged in the manufacture or repair of computer hardware and related equipment.  If you are engaged in either of these activities, and you do not otherwise qualify for a different FLSA exemption, your employer most likely must pay you overtime.

F.         Outside Sales Exemption

In order to qualify for the FLSA's outside sales exemption, the following two tests must be met:

  • Your primary duty must be making sales or obtaining orders or contracts for services.
  • You must be customarily and regularly engaged away from your employer's place of business.

Unlike many other FLSA exemptions, you need not be paid a certain amount per week to qualify for the outside sales exemption.

If your employer has classified you as exempt from the FLSA's overtime requirement under the outside sales exemption, but you do not meet both tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

G.        Retail or Service Establishment Exemption

In order to qualify for the FLSA's retail or service establishment exemption, the following three tests must be met:

  • You must be employed by a retail or service establishment.  Retail and service establishments are defined as establishments 75% of whose annual dollar volume of sales of goods and/or services is not for resale and is recognized as retail sales or services in a particular industry;
  • More than half of your total earnings must represent commissions; and
  • Your total compensation divided by the number of hours you work or your regular hourly rate must be greater than one and one-half times (150%) the federal minimum wage.

If your employer has classified you as exempt from the FLSA's overtime requirement under the retail or service establishment exemption, but you do not meet all three tests above, you may be misclassified and could be entitled to up to three years of unpaid overtime.

H.        Other FLSA Exemptions

Although this list is not conclusive, if you qualify for any of the following less common FLSA exemptions, you may not be eligible to receive overtime pay:

  • You are employed by a seasonal amusement or recreational establishment.
  • You are engaged in fishing operations.
  • You deliver newspapers.
  • You are a farm worker employed on a small farm.
  • You are a casual babysitter.
  • You are an auto, truck, trailer, farm implement, boat, or aircraft salesperson employed by a non-manufacturing establishment that is primarily engaged in selling those items to ultimate purchasers.
  • You are employed by a railroad or air carrier.
  • You are a taxi driver.
  • You are a domestic service worker and you reside at your employer's residence.

II.          Preliminary and Postliminary Activities

Preliminary activities are activities which you perform before you begin your "principal" work activities.  Postliminary activities are activities which you perform after you end your "principal" work activities.  Principal activities are activities which you are employed to perform and also include all activities which are an integral (or essential) part of your employer's business.  Your employer must pay you for time spent engaged in principal, integral and essential activities.  Depending on the circumstances, time you spend in preliminary and postliminary activities may also be compensable.

Time you spend in the following preliminary and postliminary activities is not generally compensable:

  • Walking, riding, or traveling to and from the actual place where you perform the principal activities which you are employed to perform.
  • Activities that you perform either prior to or after the time that you end your principal activities.

There are two exceptions in which preliminary and/or postliminary activities are compensable:

  • Such time is considered hours worked pursuant to an express provision of a written or unwritten contract between you and your employer.
  • Such time is treated as hours worked according to custom or practice at the place where the work is performed.

III.          Calculating Overtime Pay

Under the Fair Labor Standards Act ("FLSA"), overtime compensation generally must be paid to covered employees (employees who do not qualify for an FLSA exemption) at a rate of at least one and one-half times their regular rate of pay for each hour worked in excess of 40 hours per workweek.  In addition, a covered employee's regular rate of pay must be equal to or greater than the federal minimum wage.  In most circumstances, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the overtime wages were earned.

Based on your employer's discretion, your workweek may begin on any day of the week and at any hour of the day.  However, your workweek must be a fixed and regularly recurring period of seven consecutive 24-hour periods.  Therefore, your employer cannot average your hours worked over two or more weeks to determine you hours worked per workweek.

In addition, under the FLSA, your employer is supposed to maintain records of the time you spend performing compensable work activities.  If you bring an overtime claim against your employer, but your employer has failed to maintain the required records, you are entitled to recover overtime compensation based on a good faith (reasonable and realistic) estimate of the time you worked over the past 2 to 3 years for your employer.

A.        Employees Paid by the Hour

If you are paid by the hour, your employer must pay you at least one and one-half times your regular hourly rate for each hour worked over forty hours per workweek.

B.        Employees Paid on a Piecework Basis

If you are paid on a piecework basis, your regular rate of pay is obtained by dividing your total weekly earnings by the total number of hours you work in a particular workweek.  You are entitled to an additional one-half times your regular rate of pay for each hour you work over forty hours per workweek, plus full piecework earnings.

C.        Employees Paid a Salary for a Regular or Specified Number of Hours

If you are paid a salary for a regular or specified number of hours per workweek, your regular rate of pay is obtained by dividing your salary by the number of hours your salary is intended to compensate.  You are entitled to an additional one-half times your regular rate of pay for each hour you work over 40 per workweek, plus your salary.

D.        Employees Paid a Salary on Other than on a Weekly Basis

If you are paid a salary on other than on a weekly basis, your weekly pay must be determined in order to compute your regular rate of overtime pay.  If your salary is intended to cover a half-month, it must be multiplied by 24 and the product divided by 52.  If your salary is intended to cover an entire month, it must be multiplied by 12 and the product divided by 52.

E.        Weekend and Holiday Work

Under the FLSA, you are not entitled to an overtime premium solely because you perform work on a weekend or holiday.

F.         Overtime Pay May Not be Waived

The FLSA's overtime requirement cannot be waived by agreement between you and your employer.  In addition, an announcement by your employer that no overtime work will be permitted, or that overtime work will not be paid unless it is authorized in advance, will not impair your right to compensation for compensable overtime hours worked.

 

Learn your rights.  Contact us for a free initial consultation.  An attorney from our firm will get back to you within 24 hours.

Fast Food and Restaurant Workers and the FLSA

No matter what, people have to eat. And restaurant employees will always be there to serve them. There are over 7 million people employed in restaurants in the United States, a large percentage of whom work in fast food establishments.  These jobs are often very transient, and the fact is that many fast food workers don't realize that they have a number of rights under federal employment law.

Most large fast food restaurants are covered under the Fair Labor Standards Act. Any restaurant or fast food business with annual gross sales from one or more establishments that total at least $500,000 are subject to the FLSA.

Individually, any person who works on or otherwise handles goods that are moving in interstate commerce is subject to the minimum wage and overtime protection of the FLSA. For example, a waitress or cashier who handles a credit card transaction would likely be subject to the Act, according to a post by the Department of Labor.

One interesting question that comes up in restaurant employment is how a food credit is taken against wages. The law is that the employer may take credit for food which is provided at cost. This typically is an hourly deduction from an employee's pay. However, the employer cannot take credit or a pay deduction for discounts given to employees on food (menu) prices.

As most people know, waiters, waitresses, or other restaurant staff who receive tips are not subject to the federal minimum wage standards. They receive one- half of minimum wage. However, they are still subject to the overtime provisions of the law, and are required to be paid overtime at one and one-half times the applicable minimum wage, not one and one-half times the actual wage.

Buying uniforms is another issue that comes up a lot in restaurant work. There are a couple of different ways this situation can be handled. If uniforms are required by the employer the cost of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, such cost may not reduce the employee's wages below the minimum wage or cut into overtime compensation.

If you currently work in a restaurant or fast food place, or have recently left the food business, you may have rights under the law that you aren't aware of.  Contact us to learn about your rights.  An attorney will get back to you within 24 hours.

Am I Entitled to Overtime? Some Things to Consider...

The Fair Labor Standards Act entitles nearly every employee to time and a half for hours worked over 40 in a workweek -- including to people paid a salary rather than an hourly wage.  Although research suggests that 80% of employees are entitled to overtime, about 70% of employers are not properly paying employees. Please contact us if you believe you are improperly being denied overtime.

Below are some things to consider in deciding whether or not you are entitled to overtime:

  1. Salaried and hourly employees are entitled to overtime.  Whether or not an employee is entitled to overtime comes down to their duties, not how they are paid.  It is a common misconception that salaried employees are not entitled to overtime.
  2. If you work “off the clock” you are entitled to overtime pay.  If you come in early, work late, work through lunch, or work from home, you are entitled to compensation for all hours worked.
  3. Your employer cannot substitute “comp time,” “flex time” or “vacation time” for overtime.  You earned the money, and employer cannot offer up extra time off or other perks instead of paying you.
  4. You must be paid for overtime, even if the overtime is not approved.  Even if your employer instructs you not to work beyond 40 hours, you are entitled to pay for all time worked.  You may be disciplined for not following the orders of your employer, but you must be paid for all time worked.
  5. Employers must pay time and a half for hours over 40 in a week.  Some employers only pay straight-time for hours over 40.  This is illegal.
  6. Employers frequently misclassify employees as exempt.  Employers frequently misclassify employees and employees believe them.  Speak to one of our NY Overtime Attorneys to help determine whether or not you were misclassified.

Please also take a look at our prior posts on overtime issues, here, here, here, here, and here.