Articles Posted in FLSA

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stack of dollarsEmployers may sometimes be faced with the need to get creative when their preferred methods for compensating workers don’t necessarily mesh neatly with statutory requirements. For example, balancing an interest in compensating sales workers solely on commission may sometimes present challenges when it comes to remaining compliant with the Fair Labor Standards Act and minimum wage requirements. A case recently decided by the Sixth Circuit Court of Appeals is very informative for Tennessee employers and employees in clarifying which policies will, and which won’t, trigger a FLSA violation problem. If you have questions about this area of the law, our Tennessee FLSA lawyers are ready to advise you.

The case involved a major national chain of appliance and electronics stores. The employer had a policy that said that its retail and sales employees received compensation solely on commissions they earned. Of course, that policy didn’t absolve the employer from paying those workers in accordance with minimum wage law. Therefore, the employer crafted a plan for satisfying the minimum wage requirement:  each sales employee, regardless of commissions earned, got a minimum of $290 per week. If that worker’s commissions for that week were less than $290, the employee received what was called a “draw” and worked on somewhat like what many people might see as an advance. The draw made up the difference between the worker’s commission and $290, but, as soon as the worker had a week in which he earned more than $290, the amount of the draw was deducted from that future week’s pay.

In other words, as an example, if John Doe earned $150 in commission in the first week of September, he received a paycheck for $290, representing $150 plus a $140 draw. If John then earned $500 in the second week of September, his paycheck was $360, representing the $500 minus the $140 draw he got the week before.

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buffet restaurantThe Fair Labor Standards Act provides protections for workers when it comes to minimum wage as well as overtime. The FLSA’s protections are wide-reaching and contain few exceptions. Nevertheless, a church attempted to evade the law by having its buffet restaurant staffed mostly by unpaid “volunteers.” The U.S. Department of Labor sued the church and obtained $388,000 in back-owed wages for the workers, cleveland.com reported. The victory for the Labor Department demonstrates that, even if you worked for a religious employer, and even if you perhaps “thought” you were a volunteer, you may still be entitled to wages. An experienced Tennessee wage-and-hour attorney can help you decide if you have a case.

In this litigation, the business was a restaurant run by a church. The restaurant was staffed by two groups of workers; one group was a collection of employees who received an hourly wage. The other was a group of “volunteers” who weren’t paid. Generally, the volunteers did the same work as the employees did. A majority of the workers staffing the buffet restaurant were volunteers, whom the church’s minister recruited to work in the unpaid positions.

Eventually, the Department of Labor took action against the restaurant on behalf of the unpaid workers. The FLSA’s minimum wage and overtime rules apply to a broad range of businesses and are generally difficult to escape. For example, even if a business classifies a worker as a “volunteer,” and even if that worker considers him-/herself to be a volunteer, that still doesn’t allow the business to avoid compliance with federal minimum wage and overtime rules. This is equally true if the business is a secular one or is something run by a religious organization.

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gas signA recent unpaid overtime case originating in Tennessee placed into conflict two competing legal concepts:  an employee’s right to pursue collective action litigation under the Fair Labor Standards Act and an employer’s right to obtain employees’ waiver of their right to sue under the terms of contractual arbitration agreements. This case highlights some of the complexities that can arise in FLSA cases and the importance of retaining skilled Tennessee employment counsel, who can help guide you through the sometimes complicated process of navigating the procedural pathways required in taking on your case.

The lead plaintiff in this collective action case was a woman named Arvion. Arvion worked for two years as an hourly employee for a national chain of truck stops. Arvion’s case, like many unpaid overtime actions, involved allegations that the employer altered her time sheets to reduce the number of reported hours she had worked in a week, thereby dodging its obligation to pay her overtime. Furthermore, she alleged that the employer rolled back the number of reported hours of its hourly employees (in order to avoid paying overtime) as a matter of policy at locations across the country.

FLSA collective actions operate somewhat similarly to class actions. A lead plaintiff brings the case, identifies a group of employees who were harmed, and then contacts all of the members of that group to give them the opportunity to “opt in” to the collective action. (FLSA collective actions differ from class actions in that, unlike class actions in which class members must proactively opt out of the class action case, members of the group of similarly situated employees must proactively opt in to a collective action.)

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calculatorA law student once joked with his law professor, who was discussing a topic that involved math skills, by interjecting, “Excuse me, sir. I must object. I was told there’d be no math (in law school).” While perhaps a good source of humor after a long day of legal studies, it’s actually not true. Many lawyers are very adept at math, including your Georgia wage-and-hour attorney. Compliance with the Fair Labor Standards Act means understanding many things, including some math. It also means knowing which mathematical calculation methods for determining compliance with minimum wage and overtime rules are allowed by the law, and which aren’t. In the case of a salesman who received commissions, the law required allocating his commissions to the month when he earned them, rather than just doing a calculation that averaged the salesman’s commissions across his entire 12-month period of employment.

The employee was a salesman who sold cruises for a cruise company. He held that job from December 2013 to December 2014. The job paid $500 per week plus monthly commissions. During his 12½ months of employment, the salesman earned roughly $70,000. While there were some months in which the salesman made as much as $11,000, there were others in which he made only $2,000.

He worked, on average, approximately 60 hours per week. The salesman sued his employer for violating the FLSA. The employer, the salesman contended, owed him overtime pay that it had not paid him. The employer, on the other hand, argued that the salesman was an exempt employee and, as a result, didn’t qualify under federal law to receive overtime pay.

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farmerA recent employment law ruling from the Ninth Circuit Court of Appeals has created quite a bit of buzz among legal observers. In that case, the Ninth Circuit decided that the Fair Labor Standards Act’s prohibitions against retaliation were broad enough to allow a dairy worker to sue his employer’s outside attorney for contacting immigration enforcement and notifying them about the employee’s undocumented status.

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tip jarIn an important recent ruling, the 11th Circuit Court of Appeals has affirmed the decision of an Atlanta-based federal District Court, denying an employee the opportunity to pursue a class action against her employer for keeping some of the employees’ tips. The key to the employer’s victory in both courts was the limitations on private lawsuits contained in the Fair Labor Standards Act’s language. Since that law only allowed private lawsuits in cases of unpaid overtime or failure to meet the minimum wage, neither of which occurred in this case, the employee had no legal right to pursue a private class action.

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call center workerA major national staffing services company could end up in legal hot water regarding the way it handled its time-keeping practices for some of its remote workers. A class of “virtual call center” employees launched a collective action accusing the company of violating the Fair Labor Standards Act by failing to pay them for all of the time they worked. In an important recent step in the case, the federal district court for the Eastern District of Michigan declared the arbitration clause in the workers’ contracts to be invalid and unenforceable, short-circuiting the company’s efforts to obtain a dismissal and a court order compelling binding arbitration of the case.

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clock-inA multi-million dollar class action case involving numerous Tennessee cable TV installers who were wrongly denied overtime pay will once again go before the Sixth Circuit Court of Appeals. In a very short order, the U.S. Supreme Court ordered the Sixth Circuit to take another look at the installers’ case in light of another case that, like the installers’ case, involved using statistical evidence to arrive at the amount of damages.

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signing documentThe Fair Labor Standards Act allows employers to use various different methods to pay employees while still remaining compliant with the law. One of these methods is the “fluctuating workweek method,” or paying a base weekly salary to an employee regardless of the hours the employee worked. The key to using this method and remaining in compliance with the law is establishing a clear understanding about how the employee will be paid. In a recent 11th Circuit Court of Appeals case of note to Georgia employers and employees, the employee’s testimony in a deposition proved that the required level of “clear understanding” existed in this case, and the employer was not in violation of the law’s overtime pay rules.

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police officersA recent ruling by the 11th Circuit Court of Appeals is an important one for Georgia employers and employees to note, since it may affect some potential minimum wage and overtime cases. In the new decision, the 11th Circuit decided that it would join numerous other circuits in concluding that the Fair Labor Standards Act does not prohibit employees from bringing a case that contains within it both a FLSA collective action and a state-law class action.

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