LegalMatch: Employment Law

Employers Must Provide On-Call Pay and Compensation for Sleep Time in California

Many professions require that an employee work on-call hours, in addition to that employee’s regular hours. Surprisingly, many employers have a policy of not compensating the employee at all during the on-call hours, even if working the on-call shifts is a strict condition of their employment. This has caused a lot of debate over whether these employers are violating state labor laws. Until recently, there were no on-point court decisions that prevented employers from taking advantage of their workers in this way.

However, in January of 2015, the California Supreme Court opinion found that in certain circumstances on-call employees must be compensated. Although, the case focused on security guards required to work on-call hours without pay, the decision will inevitably have wide-spread impact on other professions that frequently require their employees to maintain on-call hours for less pay or no compensation at all. Professions that may be impacted include:

• Group home workers, personal attendants, direct care staff
• Live-in domestic workers
• Agricultural employees
• Private contractors who patrol parks
• Cleanup workers after environmental disasters                  
• Ship engineers
• Utility workers
• Electrical technicians
• Tug boat pilots
• Midwives
• Information technologists
• Media personnel
• Pilots

The class action lawsuit, brought by 1,500 security guards, alleged that their employer’s policy regarding on-call compensation, as well as sleep-time rules associated with hours worked, violated California minimum wage and overtime laws. The guards were required to maintain on-call hours for 8 hours without pay, as well as actively patrol with pay for 8 hours, totaling a 16 hour work day. Additionally, on the weekends, the guards were required to patrol for 16 hours with pay and maintain 8 hours of on-call hours without pay, totaling a 24 hour work day. They were not permitted to count sleep-time as part of the 24 hour shift.

The plaintiff’s argument regarding on-call hours was based on the fact that the hours were mandatory and a guard could not leave the premises, even for a personal emergency. They were required to stay on-site in an employee designated trailer. There were many other restrictions the court considered, including a rule that children, alcohol and dogs are prohibited. Adult visitors were allowed only if approved by management. The guards received no compensation for the on-call hours they were forced to maintain.

The other allegation involved the employer’s policy that sleep-time hours were excluded from the required 24 hour weekend shifts. Thus, the employee could not count the hours they slept when considering the number of on-call hours they were forced to work without pay.

After the case working its way through the state courts, the California Supreme Court ended the seven year debate and ruled that both of the company’s policies were violations of minimum wage and overtime regulations. Therefore, the security guards were entitled to pay for the on-call hours they performed. Additionally, the security guards that worked overnight shifts for more than 24 hours must be paid for their sleep time, under certain conditions. Relying heavily on the amount of control the employer had over the employees’ movements, the following factors will be considered in any other case brought by employees against their employers alleging violations of labor laws:

• Whether there was an on-premises requirement
• Whether there were excessive geographical restrictions on employee’s movements
• Whether the frequency of calls was unduly restrictive
• Whether a fixed time limit for responses was unduly restrictive
• Whether the on-call employee could easily trade on-call responsibilities
• Whether the pager could ease restrictions
• Whether the employee had actually engaged in personal activities during on-call time

Continuing California’s trend of enforcing labor laws and protecting workers rights, this decision expands employment protections in California. Federal Law continues to afford fewer protections, but California has an absolute right to increase wage and labor law rights, as does any other state in the U.S. (although states must not decrease federal protections). Accordingly, any employee from the above professions, or any profession that involves on-call and sleep hour compensation, can now consider bringing a lawsuit and possibly being compensated for their employer’s abuse of the law.

Law on Tips and Gratuities in Restaurants

Tips are monetary sums that are added in addition to, or “on top of” the regular charges for services. For instance, in the restaurant industry, it is common for patrons to pay the waiter anywhere from 10-15% of the food bill, as a way of saying “thank you” and expressing gratitude for good service.

Tips are often associated with employees in the service industries, particularly waiters and bartenders. Other sectors that involve tipping include hotel services, taxis, salons, and golf courses. Federal laws require all employees who make over $20 in tips a month to declare their tip earnings, which will be included as taxable income. The Fair Labor Standards Act is the main federal law governing tip practices; state laws also apply.

Note: The law on tips and gratuities can differ drastically depending on the state; below are some general points and issues to consider when dealing with tips and gratuities laws.

Can Employers keep a Portion of a Worker’s Tips and Gratuities?

The general rule is that all tips the workers. Thus, employers cannot require workers to pay them a blanket percentage of all tips collected.

However, there can be a few exceptions to this. For instance, in some states, employers can count the employee’s tips toward their hourly wages. This is not allowed in all states; you may wish to check your state’s laws regarding these types of “tip credit” practices.

What Are Some Other Points to Consider?

Here are some other points to consider:

• Mandatory service fees are not tips; tips are voluntary given by the customer. As such, mandatory service fees are treated like other charges and are not included in the calculation of the employee’s tips. These may include credit card fees, table service charges, and other fees.

• Minimum wage interactions- Some states such as California require the employee pay the worker a full minimum wage, regardless of how much they receive in tips. In other states, some employers may factor in the worker’s tips in the employee’s hourly pay.
• “Tip pools” are where the workers must pool together all the tips and distribute them evenly for the workers of that shift. Some states allow this, while others don’t. Some states exclude certain workers from tip pools, such as cooks and dishwashers

When it comes to tips, you should realize that the law in one state might be the exact opposite of what another state requires. If you have any questions or disputes, you may need an employment lawyer for advice or representation in court. Your attorney can provide legal representation, especially where there have been major losses or serious violations of worker’s rights. Your lawyer can help you file a lawsuit and can help determine your legal rights. 

The Fair Labor Standards Act: Keeping You Mostly Out Of The Breadline Since 1938

With all the divisive controversy around Arizona’s new immigration law still running rampant across America’s collective conscience, it’s no surprise that conversations about the topic often turn to the ever-present high unemployment rate.  The two issues seem to go hand-in-hand, like peanut butter and jelly, bacon and eggs, or milk and Pepsi.  The primary reason, it seems, for this phenomenon is the belief that illegal immigrants steal jobs from hard-working employable Americans.  Though the truth is that the jobs they’re hired for aren’t necessarily of the highest caliber, as most Americans likely aren’t clamoring to pick corn for a dollar an hour.  The other major disadvantage illegal immigrants don’t receive is protection under the Fair Labor Standards Act.

Passed in 1938, the FLSA established a national minimum wage as well as guaranteed overtime pay for all American employees.

The FLSA passage into law was a major victory for American workers everywhere.  However the most ironic part is that despite the hard-fought battle to turn the bill into law, many Americans today are unfamiliar with the protections it provides to employees. 

Therefore, being the conscientious wonderful guy that I am, I’ve taken the time to explain these two major FLSA functions, as well as how the FLSA can punish employers who violate it:

·        Overtime: Everyone knows the concept of time and a half, but I’m certain a significantly smaller percentage of those people are aware that the FLSA was what originated it.  Simply put, federal law requires all employees who work more than 40 hours a week to be paid 1.5 times their standard wage for every hour worked over 40 hours.  For example, if you’re wage is $20 an hour, your overtime pay would $30 an hour (20 x 1.5 = 30).

·        Overtime Violation: If an employer refuses to pay their workers overtime, then they are in violation of FLSA’s overtime provision and can be subject to both criminal and civil lawsuits.  Criminal penalties can consist of both fines up to $10,000 and imprisonment up to 6 months, as well as court orders to comply with the FLSA and to also pay back overtime wages.  Civil lawsuits filed by harmed employees are limited to recovery of back wages and liquidated damages (meaning a set amount of additional money to be paid to the employee for violating the FLSA in the first place).  There are exceptions to this rule.  Salaried workers, typically categorized as white collar employees, aren’t required to be paid overtime regardless of the number of hours they work.  This is because they receive a salary which is paid irrespective to their total work.  Salaries under the FLSA are required to have overtime already factored into an employee’s annual pay.  Also government workers have specific laws that determine their overtime pay regulation which can vary from job to job.

·        Minimum Wage: Again, this is a concept many people are familiar with, but probably less know that the FLSA created it.  It can seem crazy now, but prior to 1938 there were no laws in place at a national level which required workers be paid a minimum amount of money for their work.  Some states had their own minimum wage laws, but the amounts set varied wildly from state to state.  The FLSA changed all of this by requiring every employer regardless of the state they lived in to pay their employees minimum amount of money per hour.  Currently that amount is at least $7.25 an hour.  The best part is that under the FLSA, states still had the right to adjust the minimum hourly wage for their state, but could only adjust it upward.  So it’s either set wages at $7.25 or set it for more.

·        Minimum Wage Violation: The civil and criminal penalties for minimum wage violators are the same as those for overtime violators.  The differences here are regarding the minimum wage exceptions.  Workers who receive tips from their jobs can be paid less than minimum wage as long as the wage plus tips equal to at least $5.15 an hour.  Why is that amount less than $7.25?  Who knows?  Perhaps it’s because people believe waiters can usually make more than minimum wage with tips.  Regardless, it’s just another reason why tipping should be banned (please no hate mail; it’s just what I believe).  Also trainees aren’t required to be paid minimum wage either as long employer follows certain FLSA guidelines.

However, from a legal perspective, the most important aspect of the FLSA is that it places the burden of proof on those filing the lawsuits.  This means plaintiffs who wish to sue their employers for violating FLSA regulations are responsible for convincing the court or jury that their employer actually did something wrong.  It’s probably for this reason why the latest LegalMatch statistics have shown an uptick in the amount of clients seeking employment law specialists.  That, and you know, probably all the xenophobia, too.  But maybe I’m just over-thinking it. . .

By: Andrew Dat

New York Bill Requires Domestic Employees to be Treated like Actual Employees

New York is home to a huge number of wealthy working professionals. Many of these families and individuals have children. Of course, if you work 65-hour weeks at Big Fancy Law Firm™, you don’t really have much time to raise your kids. That’s where nannies come in.

More and more families consist of two working parents. There’s absolutely nothing wrong with this, and for many families, it’s an economic necessity. This means that many parents have to hire a nanny to take care of their children while they’re at work. These individuals operate as an unseen workforce and economy, where there is almost no regulation or workplace protection.

It looks like this is about to change in New York state, at least on paper. The State Senate just passed a law which explicitly requires that all domestic employees be given the same benefits that employers in any other industry are required to provide, under state law. This includes paying them the minimum wage, providing sick days, overtime pay, paid vacation, and 2 weeks’ notice before terminating employment (or, alternatively, termination pay).

The protections in this law, which the governor of New York is expected to sign, would apply regardless of an employee’s immigration status. If you’re at all concerned about the plight of domestic workers, this bill sounds pretty good, on its face.

Many bloggers, while generally grating the bill’s good intentions, point out some pretty serious practical problems. For example, most commentators don’t have a problem with the fact that the law will seek to protect workers who are not in the country legally. They ask, however, how such provisions will be enforced. For instance, it’s not clear how many nannies, especially illegal immigrants, will report violations of this law, for fear of retaliation (being reported to immigration authorities, for example). This fact might encourage people to hire illegal immigrants to work as nannies over people who are in the U.S. legally, since illegal immigrants will be so much less likely to report violations. Of course, it could also be argued that, by applying all the same workplace rules to illegal immigrants, there is no incentive to hire them instead of citizens or legal immigrants.

Furthermore, there are concerns that this might make life much more difficult for working families, while doing very little to help domestic employees.

Nobody is denying that these issues make enforcement of the law problematic, but some lawmakers opposed to the measure have taken the rhetoric a step further, resorting to outright falsehoods. One lawmaker argues that the 2-week-notice provision might deter parents from immediately firing a nanny who they suspect of child abuse. Leaving alone the fact that any sane parent would probably not care what the law says in a situation like this, the new law specifically addresses this possibility. The notice provision doesn’t apply in cases of suspected abuse. 

Also, perhaps to alleviate concerns that this law would destroy the market for casual domestic employees, like babysitters, this law only applies to people for whom working as a nanny is their primary source of income.

As mentioned earlier, these provisions are pretty reasonable on their face. There is no getting around the problem of enforcing them, however. Indeed, according to recent LegalMatch data, hardly any workers who have reported wage, hour, or overtime violations have been in the domestic service industry, with in-home healthcare workers being a limited exception. None of the people who reported wage and hour problems anywhere in the U.S., in the last 12 weeks, appeared to be domestic childcare workers.

There are a few possible explanations for this.

First of all, it’s possible that the bill’s detractors are correct: domestic workers simply don’t report illegal conduct by their employers, because they’re illegal immigrants afraid of being found out, or any number of other possible reasons (fear of retaliation is a big one, as a significant number of nannies report verbal and physical abuse by their employers). This could serve as an illustration that laws like this, no matter their intentions, are futile.

Of course, the law’s supporters could just as easily argue that these figures demonstrate the need for the protections this law will afford. After all, they might say, these “violations” aren’t being reported, because, legally, there’s nothing to report: these workers have almost none of the legal rights that other employees take for granted, so even if they are being exploited, there’s little the law can do for them.

Obviously, based on the limited data available, it’s impossible to say which side is correct.

A few things are certain.  First, we know that there’s a problem, especially in very large cities, as domestic workers are being exploited by their employers simply because it’s easy to do. We also know that some workplace protections, similar to those enjoyed by most other employees, are necessary for domestic workers. However, it also appears plainly obvious that there’s no perfect solution to this problem.

Perhaps this law will prove to be an important step in the right direction. However, changes like this cannot be made in a vacuum if we expect them to be successful. For example, immigration reform is necessary if the effects of this law are not to be negated by the fact that many illegal immigrants will not report violations. Obviously, I don’t know exactly what these changes would entail, but a general policy geared towards making it easier to enter the U.S. legally would be a very good start.

By: Rusty Shackleford

Report: Employees Getting Shortchanged at an Alarming Rate

According to a recent report, legal aid organizations in the Washington, D.C. area are seeing an increase in complaints by employees about wage and hour violations by their employers.

These legal aid lawyers are quick to point out that most of these violations are not motivated by malice or greed. In many cases, the current economic climate has left employers with no choice but to cut costs by any means, legal or (for some) otherwise. The violations most commonly involve paying workers less than the minimum wage, or less than the agreed-upon wage.

While violating the law is never a good thing, and stiffing employees who depend on a steady salary, literally, to survive is reprehensible, it’s hard not to appreciate, at least a little bit, the situation that many employers (particularly small businesses) find themselves in. After all, owners of small businesses have been some of the hardest-hit by the current recession, as is usually the case. They might find themselves in a position where they have to choose between shortchanging an employee on their wages, laying the employee off altogether, or maybe even going out of business. That’s no excuse for breaking the law, of course, but it also doesn’t match the image of moustache-twirling robber-barons that stories like this might initially conjure up.

The violations are particularly common in the restaurant and construction industries. Obviously, without more information, we can’t know for sure what factor, or combination of factors, is to blame for this. However, there are a few possible explanations that seem fairly obvious.

First, it’s possible that the workforce in these industries consists of a higher percentage of undocumented immigrant workers than most other industries. It’s much easier to violate wage and hour laws with such workers, since they’re less likely to know what the law is, and even if they do, employers may believe that they’re unlikely to report these violations, for fear of the immigration consequences.

A second possible explanation, perhaps related to the first, is the fact that many of these workers may be paid under the table in cash. Also, restaurant workers are sometimes exempt by minimum wage laws, or subject to a lower minimum wage than other workers, because they are expected to derive a significant portion of their income from tips. This might lead to employers not being entirely clear of their legal obligations in this regard.

Finally, it’s also possible that some employers simply think that such employees are unsophisticated, and therefore won’t know that they’re being shortchanged on their legally-mandated wages.

Whether it’s deliberate or accidental, motivated by desperation or simple cheapness, no employees should be paid less than the salary that they agreed to when they were hired.

And recent LegalMatch case data shows that wage and hour violations can occur in virtually any industry or profession, and allegations of such violations are extremely common, almost everywhere in the country. While construction and food service workers were indeed well-represented in the data, many white-collar workers, including human resources managers, investment consultants, and account executives were also present.

What does all of this tell us? Well, it’s hard to say. For example, we can’t be sure how, and to what extent, the belly-up economy is affecting the numbers of wage and hour violations, and reports thereof. Obviously, if a business isn’t doing very well, the temptation to try to shortchange employees is going to be strong, which one would expect to cause an increase in reports. On the other hand, it’s also possible that, during a recession, employees might actually be more reluctant to report such violations, simply because they’re grateful for any form of employment and income.

Whatever the case, in order to prevent such abuses, and promote the rights of employees, and the long-term stability of our economy, workers must be aware of their legal rights, and work to vindicate them.  

By: Rusty Shackleford

Little Rock Police Getting Overtime Pay to Undress?

Little Rock police have enlisted legal assistance in a recent battle to get overtime pay for getting undressed.

The Arkansas-based police argue that the process of donning and doffing their uniforms—which includes a weighty, bullet-resistant vest—takes upwards of 60 minutes each day, and that the extra hour should be compensated with overtime pay. The suit currently in effect also seeks back pay for the past three years, claiming that the State failed to comply with the Fair Labor Standards Act (FLSA).

The FLSA requires that all employers provide overtime pay to hourly employees that work over 40 hours per week. Any time exceeding those initial 40 hours is then overtime, which is paid at 1.5 times the employee’s normal rate of pay. For example, a person working 43 hours per week at $20/hour would make $800 for the first 40 hours of work and $90 for the three hours of overtime (which are paid at a the overtime pay rate of $30/hour).

Firemen, policemen, and other government employees are, however, subject to special rules, and are not always fully protected by the FLSA. And this exception to wages and overtime pay will probably be the point around which the Little Rock case pivots.

 

Are there any employees that are not protected by the Fair Labor Standards Act?

Yes. There are several categories of workers that are not legally required to receive overtime pay or FLSA benefits. These include employees who:

• Work on commission, like salespeople
• Earn at least $27.60/hour as computer professionals
• Work for a car dealership as salesmen, mechanics, or partsmen
• Work on a farm
• Are salaried, like white collar professionals
• Work as drivers, driver’s helpers, loaders, or mechanics

However, if you are an hourly employee and believe that you have been denied your right to overtime pay, you should contact a wage lawyer and discuss your options for winning back pay for the duration of your employment.

 

By Kate Beall