Articles Posted in FLSA

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A 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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A decision from a federal court in Atlanta this summer became the latest in a group to reject a recently created regulation by the U.S. Department of Labor declaring tips to be the property of employees in all circumstances, regardless of whether the tips were needed to raise the employee’s pay to a level that satisfied the minimum wage. The court decided that the plain language of the Fair Labor Standards Act is clear that employers are only required to hand over tip money when they pay a base wage below the applicable minimum wage.

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Recent court cases have addressed a steadily wider array of workers — from exotic dancers to NFL cheerleaders to home health workers to, most recently, a hip-hop music producer’s bodyguard — and whether those workers’ employment situations qualify them for the minimum wage and overtime protection of the Fair Labor Standards Act. The 11th Circuit Court of Appeals’ recent ruling in the bodyguard’s case upheld a lower court ruling in his favor, concluding that the guard’s employment situation clearly met the FLSA’s “economic dependence” standard for qualifying as an employee under the statute.

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Georgia employers and employees will soon be operating by a new set of rules when it comes to overtime pay for certain salaried employees. On May 18, the White House and the US Department of Labor announced new rules that will greatly expand the range of salaried employees who qualify to receive overtime. The new rules more than double the salary cap for eligible employees and, according to the White House, make an additional 4.2 million workers eligible for overtime. The White House also expects the new rules to increase earnings by roughly $12 billion over the next decade.

The rules governing salaried employees’ eligibility for overtime contain within them a maximum salary above which salaried workers cannot receive overtime pay. Prior to the adoption of the new rules, the salary cap was $23,660. The new rules hike that eligibility maximum to $47,476. These new rules arose from a 2014 Presidential Memorandum in which President Obama directed the Labor Department to update the regulations related to who is covered by the Fair Labor Standards Act’s overtime provisions. This was done in order to further “the President’s goal of ensuring workers are paid a fair day’s pay for a hard day’s work.”

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In a recent case (and a noteworthy one to Tennessee employers and employees) that continues the exploration of which employees are, or are not, qualified under the Fair Labor Standards Act to receive overtime pay, the Sixth Circuit Court of Appeals ruled that a bank’s failure to pay its residential mortgage loan underwriters overtime did not violate the FLSA. The underwriters performed tasks that were integral to one of the employer’s primary business objectives (lending money) and did their jobs using a substantial degree of discretion and independent judgment, so they were exempt from receiving overtime.

In this situation, a group of residential mortgage loan underwriters sued their employer, Huntington Bancshares, Inc., for failing to pay them overtime in violation of the FLSA. A federal district court in Ohio concluded that the underwriters were exempt from receiving overtime pay under 29 U.S.C. § 207(a)(1) because they qualified as administrative employees.

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Workers at a business that housed, raised, and sold worms for fishing bait lost another round in their case seeking compensation for unpaid overtime. The Sixth Circuit Court of Appeals agreed with a Chattanooga-based federal district judge that the agriculture exception to the Fair Labor Standards Act’s overtime pay requirement applied to the worm farm. The worm farm, the Sixth Circuit decided, reasonably resembled an ordinary agricultural operation in almost every relevant way. The only major difference was the unfamiliar item that the farm was farming.

The business under scrutiny in this case was one run by Bruno Durant, a French immigrant who relocated to Georgia to grow and raise worms that he then sold for use as fishing bait. After a decade in Georgia, Durant moved his operation to rural Tennessee. The business consisted of importing baby worms from Europe before housing and feeding them on his property in Tennessee. Once the worms reached maturity and grew to a sufficient size to be fit for sale as bait (roughly double their size during their time on Durant’s farm), the farm sold them to retailers.

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A woman who previously worked as an exotic dancer at an Athens club recently launched a class action lawsuit accusing her former employer of violating the Fair Labor Standards Act. According to the former employee, the club improperly withheld wages, overtime pay, and tips by improperly classifying her as an independent contractor when she was really an employee, the Athens Banner-Herald reported on its website, OnlineAthens.com. The Athens case is the latest in a string of lawsuits in which exotic dancers have challenged the legality of the way their clubs pay them.

In the recent case, Christie Burrell danced for three years at Toppers International Showbar, a well-known club in downtown Athens. During her entire employment, the club classified Burrell and all its other dancers as independent contractors, not employees. By doing so, the club avoided some of the requirements the FLSA imposes on employers regarding the payment of employees, specifically compliance with minimum wage and overtime rules. Burrell’s action claimed that, even though the club permitted, and sometimes demanded, dancers to work 40 hours or more per week, the dancers never received wages or overtime. Instead, the only compensation the dancers at the club received was their tips. To make matters worse, the club allegedly didn’t even pay the dancers all of the tips they earned, since the club engaged in “siphoning away” part of that money “to distribute to non-tip eligible employees.”

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In a unanimous decision, the Georgia Supreme Court ruled in November that home care workers who are employed by third-party service providers and perform their jobs in the homes of the employers’ clients are not exempt from the Georgia minimum wage law. The employees, who may have opened the door for similar claims from thousands of workers, argued successfully that, when one included their time traveling from one client home to another within a single work day, they received total compensation that amounted to less than $5.15 per hour.

The employer in this case was Res-Care, Inc., and its subsidiary, Southern Home Care Services. The employer was in the business of providing in-home care and personal support services. Employees might help clients bathe, go to the bathroom, dress, groom themselves, and get around their home. They also might undertake some domestic chores like washing dishes and laundry. Employees often provided care to multiple clients during a single day, and they were not paid for traveling from one home to another.

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On Sept. 25, Warner Bros. Pictures released “The Intern,” a film starring Robert DeNiro as an intern at an e-commerce fashion company. Two weeks earlier, in an event of potentially much greater significance to interns in Georgia and the employers who use them, the 11th Circuit Court of Appeals handed down a decision that revived the Fair Labor Standards Act case brought by a group of interns. It included a new, seven-part test for determining whether a worker is an intern or an employee for purposes of the statute.

The case involved a group of students pursuing masters’ degrees as registered nurse anesthetists. As a mandatory part of their educational program, students were required to complete a clinical curriculum. For Billy Schumann and 24 other Wolford College students, this consisted of spending 16 months as interns at Collier Anesthesia, a service provider in Naples, Fla. The interns were not paid for the services they provided at Collier.

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Security guards required by their employer to monitor the radio during their meal breaks were not entitled to pay for those breaks, as monitoring the radio and responding to possible emergencies did not transform the break into compensable time.

The case was decided by the U.S. Court of Appeals for the Sixth Circuit, which has jurisdiction for cases in states from Michigan to Tennessee. The plaintiffs were security guards at a casino in Detroit. Their employer granted them meal breaks in accordance with the Fair Labor Standards Act (FLSA) but with some restrictions. Namely, they were required to monitor the radio, and in case of an emergency, they would have had to respond. They were also required to stay on the premises during these breaks, but they were allowed to sit down, watch television, use the internet, and engage in generally any task they wished.

Under the FLSA, employers are required to pay nonexempt employees an overtime wage of 1.5 times their normal wage for every hour in excess of 40 the employee works in a seven-day work week. The question before the Sixth Circuit in this case was whether the duty to monitor the radio, although labeled as a meal break, constituted work. If the time was counted as work, the plaintiffs would have worked about 41.25 hours per week and would have been owed overtime.

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