Articles Posted in FLSA

Lev Craig

Last week, on September 13, 2017, the U.S. District Court for the Eastern District of Pennsylvania denied Uber’s motion for partial summary judgment in Razak v. Uber Technologies, Inc. This decision allows a putative class of Philadelphia-based Uber drivers to move forward with claims against Uber for failing to compensate them for “on-call” time they spent logged into the Uber app, but not driving customers.

The Fair Labor Standards Act (FLSA) requires employers to compensate employees for all hours worked, including on-call time: hours worked where “the employee is required to remain on the employer’s premises, or […] although not required to remain on the employer’s premises, finds his time on call away from the employer’s premises is so restricted that it interferes with personal pursuits.” The recent rise of gig economy work— individual projects and tasks picked up at a worker’s discretion, often using apps like Uber and TaskRabbit—has presented a challenge to the existing model of on-call time, as courts are asked to consider what constitutes compensable on-call time for workers who may never report to a central place of employment or who are, at least to some degree, able to work whenever they choose.

Edgar M. Rivera, Esq.

In McKeen-Chaplin v. Provident Savings Bank, FSB, the Ninth Circuit ruled that mortgage underwriters employed by a bank were entitled to overtime compensation for hours worked in excess of 40 in a work week.  The Ninth Circuit held that, because the mortgage underwriters’ primary job duty did not relate to the bank’s management or general business operations, they did not fall under the administrative exemption to the overtime requirements of the Fair Labor Standards Act (FLSA).

To show that an employee qualifies for the FLSA’s administrative exemption, an employer must demonstrate that the employee’s primary duty involves office or “non-manual work directly related to the management policies or general business operations” of the employer or its customers. This requirement is met if the employee engages in “running the business itself or determining its overall course or policies,” not just in the day-to-day carrying out of the business’ affairs. Said otherwise, “an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment.”

Owen H. Laird

If you are a regular reader of this blog, you are undoubtedly aware of the multi-year effort to raise the salary threshold for the purposes of overtime exemption under the Fair Labor Standards Act. If you are not a regular reader, then the previous sentence may not have made much sense.

To refresh: the Fair Labor Standards Act (FLSA) is the federal law that provides for minimum wage, overtime pay, and other wage-and-hour rights. The FLSA requires employers to pay their employees overtime pay – that is, pay at one-and-a-half times their normal rate – for all hours worked above forty (40) per workweek. However, the FLSA creates a number of exemptions to the overtime pay requirement: categories of workers who are not entitled to overtime pay, even if they work more than forty hours in a workweek. For example, employers are not required to provide overtime pay to certain “exempt” employees: people with professional degrees, managers, executives, artists, administrators, and many tech workers, to name a few. However, in order to qualify as exempt, an employee needs to earn as much or more than the “salary threshold,” which is currently $455 per week, or $23,660 per year. In other words, a manager who earns less than $455 a week would be entitled to overtime pay, while a manager who earns more than $455 a week would not, even if their job duties are identical.

Lev Craig

On May 2, 2017, the Republican-majority U.S. House of Representatives passed H.R. 1180, or the “Working Families Flexibility Act.” The bill, which will now move to the U.S. Senate for consideration, would amend the Fair Labor Standards Act (FLSA) to enable employers to offer employees accrued paid time off for overtime hours worked, in place of cash wages.

The act would amend § 207 of the FLSA to add a provision stating that “[a]n employee may receive, […] in lieu of monetary overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required.” In other words, the law would allow employees to choose between receiving overtime premium pay and accruing compensatory time off, or “comp time,” for any hours worked over 40 in a work week. According to the terms of the bill, employers cannot force employees to accrue comp time rather than receive overtime pay, and the employer and employee must enter into a written agreement in order for the employee to use the comp time option. Employees’ accrued comp time would be capped at 160 hours, which the employee would be allowed to cash out for its monetary value at any time, and employers would be required to pay employees the cash value of any unused time at the end of the year.

Lev Craig

Last week, a Texas federal district court granted a temporary injunction in State of Nevada v. U.S. Department of Labor, blocking the implementation of a new Department of Labor (DOL) overtime regulation that was previously scheduled to go into effect today, December 1, 2016.

The new regulation was developed in response to a 2014 directive from President Obama to the Secretary of Labor, instructing the DOL to revise federal regulations for executive, administrative, and professional overtime exemptions, aiming to ensure that the salary threshold for these exemptions—i.e., the minimum annual salary an employee must make before they could possibly be considered “exempt” from overtime requirements—more accurately reflected current income distribution.

Edgar M. Rivera, Esq.

In Smiley v. E.I. DuPont de Nemours & Co., the Court of Appeals for the Third Circuit held that employers could not offset compensation given to their employees for bona fide meal breaks against required overtime.

Plaintiffs filed a putative collective action and class action against DuPont—the world’s fourth largest chemical company—seeking overtime compensation for time they spent donning and doffing their uniforms and protective gear and performing “shift relief” before and after their regularly scheduled shifts. DuPont contended that it could offset compensation it gave plaintiffs for meal breaks during their shift—for which DuPont was not required to provide compensation under the FLSA—against such required overtime. Under the FLSA, an employer must pay its employees for time worked, which does not include bona fide meal breaks.

Owen H. Laird, Esq.

As we have previously discussed, Uber, the multi-billion dollar company behind the eponymous smartphone taxi app, is in a long-term dispute with its drivers over benefits and pay.  This dispute stems from Uber’s classification of its drivers as independent contractors rather than employees.  Last week, a federal court in California threw out a proposed agreement between Uber and its drivers that would have allowed Uber to continue classifying them as independent contractors.

Drivers filed class action lawsuits in Massachusetts and California challenging Uber’s classification.  Earlier this year, Uber reached agreement on the settlement with the two groups of drivers.  Under the terms of the settlement, Uber could continue classifying its drivers as independent contractors, but was required to pay its Massachusetts and California drivers a total of $100 million, allow them to accept tips, and permit them to investigate forming driver collectives.

Edgar M. Rivera, Esq.

In Perez v. The City of New York, the Second Circuit analyzed what factors were relevant for a district court to determine whether an employer must compensate its employee for time spent putting on and taking off (“donning and doffing”) their uniforms.  Vacating the district court’s decision that donning and doffing of uniforms were not compensable activities under the Fair Labor Standards Act (FLSA), the Perez court found that it could not determine as a matter of law that the donning and doffing of uniforms were not “integral and indispensable to [plaintiffs’] principal activities.”  Plaintiffs, Assistant Urban Park Rangers, claim that defendants—the Parks Department and its Commissioner, along with the City of New York and Mayor de Blasio—provided inadequate compensations for their work by, among things, failing to pay wages for time spent donning and doffing their uniforms before and after each shift.

Assistant Urban Park Rangers are required to wear uniforms comprising both professional clothing and equipment.  The professional clothing includes “olive drab” pants and jacket, ranger-style hats, and various Parks Department insignias; the equipment includes a bulletproof vest and a utility belt holding handcuffs, gloves, a radio, a flashlight, a baton, a can of mace, a summons book, and a tape recorder.  The plaintiffs estimate that to don and doff those uniforms takes five to thirty minutes each day.

Owen H. Laird, Esq.

Anyone living in the United States at the moment is undoubtedly aware that the 2016 election season is in full swing. This week, the news has been dominated by the Republican National Convention in Cleveland. On Tuesday night, the theme of the Convention was – ostensibly – “Make America Work Again.” Despite the stated theme, the speakers rarely touched on economic policies or issues, instead preferring to resort to the same attacks against Democratic nominee Hillary Clinton ­– private email server, Benghazi, etc. – that were made the night before.

On the few occasions where the Convention speakers did touch on economic issues, they primarily bemoaned the state of the “middle class worker” in America. According to the speakers, the problem facing middle class American workers is that “regulation” is choking the economy and preventing American business owners from doing whatever they need to in order to create jobs.

Owen H. Laird, Esq.

For New Yorkers, both the Fair Labor Standards Act (FLSA) and New York Labor Law provide employees with rights to a minimum wage and, in many cases, overtime pay. However, many workers in New York still do not receive the pay to which they are entitled; for instance, employers may under-report employees’ hours, improperly withhold wages or tips, or simply pay a wage lower than the State minimum.

However, many employees choose to let these violations go because they are “minimal.” An employer might underpay an employee for by a half hour for each pay period, a loss that might only amount to a few dollars a month. The employee could hesitate to pursue those lost wages, afraid of upsetting things at work or doubtful that they can find a lawyer to pursue a smaller case. Despite these potential concerns, employees who believe they are being illegally underpaid should not be afraid.