Articles Posted in Unpaid Overtime

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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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A recent ruling regarding an auto shop employee’s unpaid overtime claim creates an outcome that is potentially beneficial to Tennessee employees but worrisome to Tennessee employers. The 6th Circuit Court of Appeals concluded that an employee’s uncorroborated testimony, even in the absence of any additional supporting evidence, may be enough to create a dispute of fact and defeat an employer’s attempt to end the case via summary judgment.

The dispute centered around the hours worked by Jeffrey Moran, an employee at Auto Pro auto repair shop in Warren, Mich. According to the employee, he agreed to work during all of the shop’s operating hours, which spanned six days and 58 hours. In exchange, the employer agreed to pay Moran $300 per week plus “bonus-type profit sharing.”

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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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The Department of Labor is considering raising the minimum wage an employee must earn to be considered an overtime exempt employee. If the proposed rules raise the wage threshold as expected, millions of workers who thus far have been exempt from overtime pay could be eligible.

The federal law that controls overtime rules in Georgia and the rest of the United States is called the Fair Labor Standards Act (FLSA). The FLSA requires employers to pay employees an overtime wage of 1.5 times the employee’s normal salary for each hour in excess of 40 the employee works in a seven-day workweek.

However, the FLSA exempts many types of employees from the overtime mandate. This means that employers are not legally required to pay these overtime-exempt employees the time-and-a-half overtime wage. Whether an employee is exempt or nonexempt is determined by the primary duties of her job. The employer does not determine whether the employee is exempt or nonexempt.

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The Eleventh Circuit last month affirmed the basic principles of the Fair Labor Standards Act (FLSA) by denying an employer’s attempt to blame its employee’s conduct for the employer’s violation of overtime wage laws.

The case, Bailey v. TitleMax of Georgia, involved an FLSA overtime claim brought by an employee of the defendant. The plaintiff worked at TitleMax for approximately one year. During this time, the employee routinely worked off the clock at the direction of his supervisor, who erroneously asserted that the company did not pay overtime. Additionally, the supervisor also edited time records to underreport the hours the plaintiff worked. These practices resulted in overtime hours the employee worked but was not paid for.

The plaintiff brought a claim under the FLSA in federal court for unpaid overtime wages. In response to the lawsuit, the defendant contended that the employee’s violations of company policy absolved it from liability. The company adopted internal policies that required employees to accurately report their hours, regularly verify their hours, and report any problems at work to their supervisors or higher-level managers. Since the employee violated these policies, the defendant argued that it should be absolved from liability pursuant to a legal theory that prevents plaintiffs from recovering if they bear responsibility for their own injuries. The district court granted summary judgment for the defendant under this theory.

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Generally, an employer must pay employees overtime wages unless the employee is exempt under federal or state law. Determining whether an employee is overtime exempt can be difficult, especially if the employee’s duties are of a mixed nature. In a recent case, the Court of Appeals of Georgia noted that it often takes a fact-intensive inquiry into the specific duties of the employee.

The case, DeKalb County v. Kirkland, involved a claim by fire captains involving accrued compensatory time. The captains contended that the county should have allowed them to use their compensatory time or paid them for it. Part of the captains’ argument relied on a provision of the county code that prohibited cash payment for compensatory time for exempt employees. They argued that they were not, in fact, overtime exempt employees, and thus the county code did not forbid payment for their accrued compensatory time.

The Court of Appeals ultimately granted summary judgment for the county. The Court noted that the determination of whether an employee is overtime exempt or nonexempt relies on his or her actual job duties. Since the captains provided no evidence to prove that they were misclassified by the county, the court could not accept their argument. Had the captains provided some evidence of their specific job duties, the Court of Appeals may have had a much harder time making a determination.

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Perhaps drawing inspiration from the college bowl games and NFL playoffs, the world of employment law lately seems fixated on the intrigue of overtime, although more in the context of bonus pay than bonus play. While it may not be as thrilling as a Hail Mary pass or as heartbreaking as a missed kick (sorry, Auburn fans) to end the game, overtime as it relates to the Fair Labor Standards Act (FLSA) can have a major impact on both employers and employees, so it’s worth taking some time out from being an armchair quarterback to look at some of the latest developments.

Two big court decisions in December went against employees looking for overtime. The first came from the US Supreme Court in Integrity Staffing Solutions v. Busk. As covered previously on this blog, the case asked whether time—up to 25 extra minutes—spent in an internal security screening line at the end of one’s shift should be compensable. In a rare move for such divergent ideologies, the justices were unanimous in rejecting the notion that time spent in the line deserves to be time on the clock. Continue reading →