Employment Law Instructor Neilson 11/10/2010 1 Fair Labor Standards Act 29 U.S.C. §201 et seq Overview Has large economic impact on US What employers must comply? • Annual gross volume over $500,000 OR • Hospital, businesses providing medical or nursing case, school/preschool, federal state or local govt agency OR • Employees or enterprise regularly involved in interstate commerce Independent contractors are not covered, but note: Employer‘s classification can be rejected 11/10/2010 2 FLSA What does FLSA address? Minimum Wage Maximum hours of work Overtime pay Regulation of Child labor Record-keeping 11/10/2010 3 What is required for minimum wage? Nonexempt workers must receive: $5.15/hour Federal $2.15/hour for workers who receive tips • Washington: $7.63 currently • Employer can‘t take any deductions (ex: for work clothing) that would result in a minimum wage violation 11/10/2010 4 What are Overtime Requirements? Over 40 hours a week (not counting any holiday, vacation, or sick time) must be compensated at 1.5 times the usual rate Employer may not average Employer may not offer ‗comp‘ time instead of overtime Employer must compensate based on average hourly rate from all earnings if ee earns more than salary Include any activity controlled or required by employer and for benefit of employer‘s business (ex: short rest periods, waiting time (where ee is unable to use time for own purposes) • E.g.: Donning protective clothing and walking to meat-packing warehouse is compensable time. 2005 SCT case, IBP v. Alvarez 11/10/2010 5 Recordkeeping Requirements Employer must keep records for each nonexempt employer (hours worked, pay rate, total earnings, deductions from earnings, date of payment and period covered by payment) Employee should not keep own time (they will be treated as valid unless good reason exists to doubt credibility of such records) 11/10/2010 6 FLSA Mythbusters The Wage and Hour law does not require: vacation, holiday, severance, or sick pay, meal or rest periods, holidays off, or vacations, premium pay for weekend or holiday work, pay raises, or fringe benefits, a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees, pay stubs 11/10/2010 7 Exemptions from Overtime and Minimum Wage Rules Categories of Exempt Employees: Executive (salary of at least $455/week, primarily manage & direct work of 2+ other F-T ees with power to hire/fire) Administrative (salary of at least $455/week, exercises discretion and independent judgment re: significant matters relating to employer‘s general business operations) Professional (salary of at least $455/week, has advanced knowledge and consistently exercises discretion; this includes Employees in certain computer- related occupations paid at least $27.63 an hour) • Outside sales employees • EE‘s of certain seasonal amusement or recreational establishments, small newspapers, seamen on foreign vessels, employees engaged in fishing operations, employees engaged in newspaper delivery, some farm workers, casual babysitters and person employed as companions to elderly/infirm 11/10/2010 8 Illustrations of Exempt Highline instructor (professional) Paralegal if salaried (professional) Attorney (potentially all 3) 11/10/2010 9 Illustrations of Nonexempt Receptionists Secretaries File clerks Technicians 11/10/2010 10 Exempt from Overtime Only Certain commissioned employees of retail or service establishments; auto, truck, trailer, farm implement, boat or aircraft salesworkers, or parts clerks and mechanics servicing autos, trucks, or farm implements, who are employed by nonmanufacturing establishments primarily engaged in selling these items to ultimate purchasers. Employees of railroads and air carriers, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans Announcers, news editors, and chief engineers of certain nonmetropolitan broadcasting stations Domestic service workers living in the employer‘s residence (―Fran‖ in ―The Nanny‖), Employees of motion picture theaters Farmworkers 11/10/2010 11 Exemptions • Just because… someone is paid a salary does not mean the person is exempt! Salary can only compensate for straight-time pay • Just because … someone has excellent job skills doesn‘t mean he or she uses the ―independent judgment and discretion‖ used to rate an exemption • Just because… someone has a college degree doesn‘t mean that person rates an exemption • Just because… the person is called ―Manager‖ doesn‘t mean he or she performs the supervisory duties or discretion required for 11/10/2010 exempt status 12 Remedies Report claim to DOL -can assess civil money penalties up to $1,000 for repeated/willful violations; injunction, attys fees, liquidated damages (back wages), possible criminal sanctions for egregious conduct (they may not take action) File lawsuit —double back wages going back 2 years before suit brought and going forward until case is resolved; (can often go back 3 years if company knowingly disregarded FLSA); out of pocket litigation expenses, attorneys fees No class actions but other ee‘s can join suit once filed 11/10/2010 13 Example of suits In Connecticut, a federal court recently held that a computer ―help- desk‖ technician who claimed that he and ―a few thousand‖ other techs were entitled to overtime pay for the past three years could proceed with his class action claims. A federal court in New Jersey recently approved a class action brought on behalf of all former and current janitors who performed work for Wal-Mart since January 2000. The workers claim that they were forced to work at least 60 hours per week without overtime or other benefits. In November, a federal court in the District of Columbia permitted nine telecommunications engineers to proceed with a collective action against their employer for unpaid overtime since a reorganization in 2003. 11/10/2010 14 Examples of suits, continued The DOL recently announced that after a Wage & Hour investigation, 431 garment workers received $238,460 (approximately $530 apiece) in back wages and the employer was fined $25,000 for missing a payday and failing to pay overtime to its workers. The DOL also announced a grocery wholesaler in New York agreed to pay 102 employees $237,052 (approximately $2,200 apiece) in back wages after it admitted to misclassifying non-managerial employees as being exempt from overtime requirements. An Atlanta-based construction company was ordered to pay $350,000 in back wages, plus a $60,000 fine for FLSA violations, including failure to pay overtime and failure to keep proper employment records. In a related case, a sub-contractor was also ordered to pay $350,000 in back wages, in addition to $700,000 in liquidated damages as a penalty. 11/10/2010 15 Equal Pay Act (1963 Amdt to FLSA) Employee must pay female employees the same rate as male employees for the same work. ―Equal‖ means jobs require equal skills, effort, and responsibility and performed under similar working conditions Deviation permitted only for: Seniority Merit System based on quantity or quality of production or Any differential factor other than sex • See p. 74 • Bring EEOC charge or sue privately – back pay times 2 (with 2d back pay as liquidated damages) 11/10/2010 16 Child Labor Minimum age for employment is 16 years 16-18 year olds cannot work in occupation that secretary of labor deems particularly hazardous (e.g. coal-mining, logging, roofing) Driving is fine! 11/10/2010 17 Quiz 11/10/2010 18 For Next Class: Read Chapter 4 11/10/2010 19
"Paralegal Exempt Employee New York"