Recently in Wage and Hour Laws Category

April 16, 2014

Federal Court in Indiana Allows Class-Action FLSA Suit to Move Forward After Partially Denying Motion to Dismiss

This past month, a federal court in Indiana allowed a class-action employment suit to move forward after affirming in part and denying in part the employer's motion to dismiss. In Harris v. Reliable Reports, Inc., the named plaintiff, Matthew Harris, claimed that the Fair Labor Standards Act (FLSA) and wage and hour laws in six states had been violated. He sought court certification for a class-action lawsuit.

house-in-field-of-flowers-1440514-m.jpgHarris initially filed a 44-page complaint against Reliable Reports, Inc., for whom he had worked as a field reporting specialist from March 2011 to April 2013. Reliable Reports operated in 22 states, where it employed field reporting specialists to inspect both residential and commercial properties. Part of a field reporting specialist's job was to log into Reliable Reports's computer network to download addresses of properties to be inspected; call to arrange inspection appointments and prepare route maps; load coordinates into their GPS units; drive to inspection sites and inspect and photograph the properties; respond to calls and texts from Reliable Reports and other interested parties; contend with traffic delays; and log into the computer network at the end of the day to enter hours worked and miles traveled.

For this, field reporting specialists were paid at a piece rate, which meant that they received a set fee for every report of the inspection completed and passed, as opposed to a standard hourly rate. Harris claimed that despite traveling hundreds of miles from home each day, field reporting specialists were not compensated for that time. Nor did they receive a true lunch break, being required to drive to appointments, get gas, or respond to calls during that time. Overall, though Harris claimed to have worked 60 to 65 hours per week, he had just $21,334.19 to show for it. Reliable Reports allegedly told employees that they must not report their actual hours and miles. The company also failed to fully compensate employees for mileage, despite claiming that it would in the employee manual.

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February 28, 2014

President Obama Issues Executive Order Raising the Minimum Wage of Certain Federal Contract Employees

This month, President Obama issued an executive order that would increase the minimum wage for federal contract employees from the current $7.25 per hour to $10.10 per hour beginning next year. While the number of employees affected is small, the gesture could have wider implications across the United States, including in Kentucky and Indiana.

million-buck-cheque-1-531970-m.jpgPresident Obama first announced the executive order during his State of the Union address in January. When he signed the order, he did so surrounded by employees who could possibly benefit. Even so, both the President and supporters of the executive order acknowledged that the number of employees it would help was just a drop in the bucket compared to the number of employees who were not earning sufficient income despite working full time. The executive order would apply only to a small percentage of the two million federal contractors across the country.

However, both President Obama and supporters of the executive order hope that it creates momentum both in the states and in Congress to raise the minimum wage. President Obama pressed Congress to pass legislation that would raise the minimum wage for all workers, calling it "the right thing to do." That said, Congress has shown little willingness to pass minimum wage legislation, though the President and allies are working on strategies to convince both houses.

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December 17, 2013

Fast Food Workers Go On Strike in Indiana and Across the Nation

Workers across the country, including in Kentucky and Indiana, organized to go on strike, this time to protest the low wages paid at fast food restaurants. The strikes come during a time when studies have shown that more than half of fast food workers make so little money that they use public assistance.

burger-1097100-m.jpgAlthough in Indiana the percentage of fast food workers on public assistance is less than 50% -- 45% to be exact -- the result still costs the state an estimated $131 million each year. Many workers hope to change that, such as Nicholas Williams, a cook at a McDonalds in Indianapolis. He notes that while McDonalds makes $6.5 billion each year, he makes only $7.35 an hour and cannot afford many basic things. He and others hope to see the minimum wage raised to $15 per hour.

Supporters state that when fast food workers make so little, it hurts their entire family, because the parents then need to work two or three jobs to support their families and are never home. Furthermore, these jobs typically lack health care that would benefit the family if someone got sick. In fact, forcing fast food workers to work all the time to make ends meet prevents them from participating in the community at large.

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November 4, 2013

U.S. Supreme Court to Determine Whether Time Spent Putting On and Removing Equipment for Work Should Be Compensated

The United States Supreme Court will soon determine whether time spent putting on and removing -- or "donning" and "doffing" -- protective clothing for work should count as paid time. Workers at an Indiana steel mill, U.S. Steel's Gary Works, claim that it should. They spend considerable time donning jackets, pants, work gloves, steel-toed boots, eye protection, hard hats, and ear plugs before they start their work. The clothing protects them from the fire and molten steel from the mill's blast furnaces and coke ovens. However, 800 former and current workers claim that they have not been compensated for their time, and have filed a class action suit against their employer as a result. Meanwhile, U.S. Steel claims that the time the workers spend changing does not count as part of a day's work, as defined by the workers' union contract dating back to 1947.

worker-and-the-excavator-1170139-m.jpgWhether time for donning and doffing equipment should be compensated is a question that has frequently appeared in the lower courts. Many collective bargaining agreements even include provisions as to whether donning and doffing time is covered. Before a case on the issue can go through the courts, the workers involved must typically exhaust the remedies of the collective bargaining agreement, if there is one. If they fail to do so, the court will usually dismiss their case, stating that the workers may come back only after they have followed collective bargaining procedures.

The situation also highlights the changing nature of work, the difficulty with determining when a work week begins, and ways in which the federal Fair Labor Standards Act -- intended to address these issues -- is behind the times.

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October 16, 2013

Department of Labor Extends Federal Wage and Hour Laws to Home Health Care Workers

In a move that will affect home health care workers in Kentucky and the other states, the Department of Labor recently announced the enactment of a new rule that will give them minimum wage and overtime protections.

wheelchair-945156-m.jpgWhile most hourly workers are protected by the Fair Labor Standards Act (FLSA), there are some exceptions, thanks to a "companionship exemption" enacted in 1975. The companionship exemption applies to workers who provided companionship services for individuals who were unable to care for themselves. Since that time, the home health care industry has grown at a fast pace and is expected to grow 70% bigger by 2020, but in the process, home health care workers have woefully low yearly incomes -- the median annual income was just over $20,000 per year in 2010. This is despite the fact that home health care workers may work up to 60 hours per week, including overnight stays.

Now thanks to the rule, which takes effect in January 2015, all home health care workers will need to be paid 1.5 times their hourly rate for every hour they work beyond 40 in a week, or eight in a day. It will be a life changer, given that even with their long hours, many home health care workers must still work one or two other jobs to make ends meet. The move was applauded by President Obama, who claimed that it would rectify an injustice for those who did "heroic, hard work."

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September 5, 2013

Sixth Circuit Finds That Employment Contracts That Shorten the Statute of Limitations on FLSA Claims Are Invalid in Boaz v. FedEx

When employees discover that their wages have been illegally withheld, or that their employers have committed other acts that would be illegal under state or federal law, it is often months or years after the injury first occurred. Whether an employee can get relief, and how much, depends upon whether the statute of limitations has run. The statute of limitations acts as a time limit for which an injured party can file a lawsuit from the date of the injury. This time limit may vary by state, type of injury, or statute. In Kentucky, the statute of limitations for labor law claims is five years, while it is two years for Indiana. The statute of limitation may also specify that the clock starts running only after the injured party "should have known" about the injury, rather than when the injury actually occurred.

copy-cat-295013-m.jpgMany employers have sought to circumvent the statute of limitations by placing language in employment contracts that shortens the amount of time employees have to file a claim. They argue that these clauses are valid, as the employee agrees to them when he or she signs the contract. However, this past month, the Sixth Circuit Court of Appeals disagreed.

In Boaz v. FedEx, the Sixth Circuit held that a contract clause mandating that a suit must be filed within six months of the injury was invalid. The case began in 2009, when FedEx employee Margaret Boaz sued her employer for wage and hour and Equal Pay Act violations between 2004 and 2008. Boaz had taken over a higher position with many more responsibilities, but her pay reflected her original low-level status. Boaz argued that she should have been paid what the previous male employee in that position was paid. FedEx, in turn, argued that Boaz's lawsuit should be dismissed because under her contract, she had only six months to file from the time the pay disparity last occurred.

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August 21, 2013

Fast Food Employees in Kentucky and Other States Hold a One-Day Strike to Raise the Minimum Wage

In Kentucky, the current minimum wage is $7.25 per hour, the same as the federal minimum wage. Yet it is estimated that $17.18 per hour, full time, is necessary to support a Kentucky family of two adults and two children. That means countless families are living on the edge of poverty, even if both parents have full-time jobs. Minimum wage food service employees across the country are hoping to change that.

Screen Shot 2013-08-09 at 3.04.22 PM.pngRecently, thousands of employees in Kentucky and other states walked out on their jobs at various fast food restaurants, hoping to increase their wages from $7.25 to $15 per hour. One employee noted that even with two jobs, he did not have enough money to buy shoes for his children or insure his car. The protest lasted one day and took place at a time when even members of Congress are calling for a minimum wage increase.

While the federal Fair Labor Standards Act (FLSA) provides numerous protections for hourly workers, including a minimum wage, additional pay for work over eight hours in a day (or 40 in a week), and time for breaks and meals, it does not mandate that the minimum wage be tied to the cost of living. Therefore, the minimum wage has tended to lag behind. While some states have higher minimum wages to bridge the gap, Kentucky -- as noted above -- is not one of them. Many have called for some sort of wage boost: President Obama has advocated for an increase to $9 an hour, while 100 economists recently supported a bill that would have raised the minimum wage to $10.50 an hour.

Those who seek an increase have traditionally run up against industry claims that more money means fewer jobs. This time is no exception. The restaurant industry argues that if workers get $15 an hour, restaurants will close and there will be fewer jobs all around. Yet given the restaurant industry's profits, many employees view such arguments with skepticism.

Although the fast food employees participated in a strike, they do not belong to a union. However, their willingness to strike suggests that parts of the food industry may one day be unionized. Fast food employees have traditionally been tough to organize because it is such a high-turnover industry whose workers are thought to be "easily expendable." Yet for this latest protest, the Service Employees International Union has provided funding and staff to help organize.

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January 24, 2013

Louisville Kentucky Landmark Restaurant Closes Down Amid Unfair Pay Practices Claims

Lynn's Paradise Café was a Louisville, Kentucky icon. While people may have argued about the quality of the food, there was no denying the fact that the décor and atmosphere was completely unique, and that it helped the city's restaurant scene. It was featured in several food shows, including Throwdown with Bobby Flay, in which he challenged Lynn Winters to a breakfast food contest.

But what happened behind the scenes at Lynn's may never be known for sure, because the restaurant was suddenly closed on January 11, 2013. With a simple sign on the door and no notice to its employees, the quirky restaurant ceased operations after 22 years. While Lynn has said it was simply time for her to do something different, her ex-employees are saying they were subjected to harassment and forced to bring their own money to work.

While there has not been much additional information from reputable sources on the harassment claims, much has been written about the second issue. According to news reports, all of the servers were recently required to bring $100 with them every time they worked. This money was supposed to be used to "tip out" to the other wait staff, like those who bus the tables. Before the days of credit cards, servers received their tips right away out of the cash used to pay for the meal. Even with credit card payments, some restaurants still give tips to their servers at the end of each shift. However, Lynn's had apparently changed their policy so that the credit card tips were included in their paychecks. This most likely led to a shortage of tip money to share with the other wait staff at the end of a shift.

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September 25, 2012

Employment Lawsuit against Restaurant Chain Claims Employees Were Underpaid

Once again, Darden Restaurants is in the news as employees allege that they are not being paid fairly. Darden Restaurants is a huge company, best known for its Olive Garden and Red Lobster restaurants that are located in Kentucky, Indiana, and throughout the United States.

Only two plaintiffs have been named in the unfair pay lawsuit, one in Florida and one in Virginia. However, the attorney who filed the lawsuit sees it becoming a class action lawsuit that could potentially cover thousands of previous and current Darden employees that were employed by the company anytime between 2009 and 2012. The unfair wages lawsuit was filed in Florida, where Darden is headquartered.

The lawsuit is based on the federal Fair Labor Standards Act (FLSA). FLSA was passed in 1938 and established minimum wage and the 40-hour workweek. It also stated that employees were entitled to time-and-a-half for every hour they worked over 40 hours. FSLA also states that tipped employees are allowed to keep their tips and they will not become the property of the employer. A tipped employee may be required to put their tips in a "tip pool." The tips in the pool are then shared among the employees that regularly receive tips as part of their compensation. An amendment to the Act in 1946 stated that an employee should be paid for any time spent doing work specifically for the employer, even if it was not during the employee's scheduled shift or regular work hours. Another amendment relevant to this case occurred in 1996. Up until this time, employees who received tips regularly were paid 50% of the current minimum wage. But in 1996, the tipped employee's hourly rate was frozen at $2.13 per hour by the federal government.

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May 30, 2012

Would the Paycheck Fairness Act be good for Female Kentucky Workers?

Equal pay for women has been an issue for many years. In 1963, the Equal Pay Act was enacted to ensure that men and women who did the same job at the same place of business and had the same experience would receive the same amount of pay. If a discrepancy in pay was found, the lower paying employee, presumably the woman, would receive an increase in pay, rather than the man's pay being reduced. The act allowed a woman to receive up to three years in back pay, or double that amount if it was discovered that she had been willfully discriminated against in her pay. The slogan for the act was "equal pay for equal work."

People disagree on whether or not the Equal Pay Act has been affective in ensuring women receive equal pay. Those who feel it has not been affective are promoting a new bill called the Paycheck Fairness Act. This new act adds on to the Equal Pay Act in the following ways:

Clarifies what reasons are acceptable for pay differences between men and women;

allows wages to be compared within certain geographical areas to determine fairness;

makes retaliating against an employee for investigating wage differences prohibited;

increases amount and type of damages that can be requested to both compensate the employee and penalize the employer;

includes small businesses in the law rather than requiring an employer to have a larger number of employees for the law to apply;

provides funds for training EEOC staff regarding pay disputes and for educating women on how to negotiate a salary;

requires federal contractors to provide employment data regarding hiring and salaries to help the Labor Department enforce the Equal Pay Act.

Proponents of the bill say all of these factors would add up to women receiving equal pay in the workplace because it would facilitate investigating the wage gap, protect those who raise the question of unequal pay, impose stiffer penalties for pay discrimination by employers and provide training to those who need it.

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May 16, 2012

Kentucky Workers File Employment Lawsuit against Prison Company

1226064_prison_cells_2.jpgPrisons are often riddled with problems. It is a tough place to work. Most people would not even consider working for the prison system for a career. But many of those that do work hard for every penny they earn. Some Kentucky prison employees feel they are not being adequately compensated for their work.

The Marion Adjustment Center is a private prison in Kentucky. It is run by Corrections Corporation of America (CCA), which is headquartered in Nashville, Tennessee. Six current and previous employees have filed an employment lawsuit claiming they were not paid for extra hours they had to work. Oftentimes they were required to stay past the end of their shifts to wait for their replacements or to travel between prisons, both on their personal time. They were also expected to attend training sessions on their days off.

Why would an employer think asking employees to work more than the hours they were paid for would be okay? The employees in question are, or were, shift supervisors. According to the company, employees that hold this position are exempt. "Exempt" means they are not entitled to overtime. Businesses can claim that certain employees are exempt under the Fair Labor Standards Act (FLSA). The FLSA provides a list of categories of employees who could be exempt from receiving overtime pay as well as specific types of employees. Those who could be exempt range from babysitters to farm workers to executives. According to the Department of Labor's (DOL) website regarding the FLSA:

"Exemptions are narrowly construed against the employer asserting them. Consequently, employers and employees should always closely check the exact terms and conditions of an exemption in light of the employee's actual duties before assuming that the exemption might apply to the employee. The ultimate burden of supporting the actual application of an exemption rests on the employer."

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February 17, 2012

How the Worker Adjustment and Retraining Notification Act affects Kentucky Workers

The Worker Adjustment and Retraining Notification Act (WARN) is a federal law that was passed in 1988 and became effective in 1989. According to the Department of Labor, the act "protects workers, their families, and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs." While this quote gives a general description of what the act does, more information is needed to understand which employers are required to follow the WARN Act and which employees may benefit from its protection.

As the quote says, a company must employ at least 100 workers for the WARN Act to apply. All 100 workers must have been employed by the company for at least six months and average at least 20 work hours per week. For example, a company that employs 65 people year-round and hires another 40 seasonal workers for three months would not be governed by the WARN Act.

Even companies that have 100 qualifying employees may be exempt in certain circumstances. If a company is trying to find investors to help keep the company afloat, and giving a 60-day notice to its employees would hinder this activity, the company may not be required to give the notice. If Mother Nature causes the company to be shut down due to a disaster such as a tornado, hurricane, or flood, the notice is not required because the closure could not be anticipated. In a similar vein, if a company suddenly loses a main source of income because of a cancelled contract or other unforeseeable issue, a 60-day notice may not be possible. In these cases, the companies are still required to provide notice of the layoffs or closure as soon as possible, and they must provide a viable reason why the full 60-day notice could not be given.

The next part of the act to consider is which employees are covered. In general, anyone working for a company that fits the criteria above would be covered, including salaried and hourly employees, managers and supervisors. There are exceptions though. Anyone working for a branch of the government - federal, state, or local - is exempt. Those who have accepted a position knowing it is temporary and those who are hired as self-employed contractors do not qualify. Individuals who are involved in a labor dispute lock-out or who participate in a strike are also not entitled to the 60-day notice.

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February 8, 2012

Alleged Wage Law Violations and Discrimination at Restaurant Chain

1151761_waiter.jpgAnother restaurant chain is coming under fire for potential discrimination against a protected class of employees. Last year, Texas Roadhouse Restaurants, which is based in Louisville Kentucky, was sued for allegedly discriminating against employees and potential employees that were over the age of 40. The lawsuit claims that interviewers remarked about applicants' ages during interviews, and that older employees were not allowed to be hosts or work at the bar. Instead they were relegated to the back of the restaurant or the kitchen. Even the people pictured in the training materials were obviously individuals well under 40.

Darden Restaurants owns several popular chains throughout the United States, including LongHorn Steakhouse, Red Lobster, and Olive Garden. The company employs over 180,000 people. Employees of Capital Grille, another of Darden's chains, have filed a lawsuit claiming racial discrimination and violation of federal wage laws. Similar to the Texas Roadhouse suit, employees of a protected class - in this case minorities - claim they are being discriminated against by being given less desirable positions in the restaurants and are being denied the chance to advance in the company. Some experts think the plaintiffs will have a hard time proving this part of the case because the CEO of the company is African American and about 30 percent of the managers-in-training that have moved up from other roles are minorities.

The other issue in the case is the alleged violation of federal wage laws. Servers in restaurants are generally exempt from minimum wage laws, which means they can be paid less than minimum wage, because they earn tips that in theory make up the difference in pay. According to the lawsuit against Darden, the company currently requires servers to share a portion of their tips with hourly employees, whose hourly rates are higher than the servers because they have to be paid at least minimum wage. Restaurant employees also claim that they have to do prep work before their shifts begin and after they end and they are not being compensated for it.

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December 15, 2011

Kentucky Employees to Receive Overtime Pay Due from Sullivan University

In a dispute that dates back to 1994, Kentucky employees of the Sullivan University System have been asking for overtime wages they feel they were denied. The employees are current and past high school representatives and admissions officers that present information regarding the university system to high school students. The U.S. Department of Labor was first alerted to the issue in 1994, but there was no legal action taken at the time. The Labor Department began reviewing the case again in 2007 and a lawsuit was filed in 2010. Sullivan has agreed to settle with about 150 employees by paying them overtime owed from 2007 to the present.

The Fair Labor Standards Act, or FLSA, addresses minimum wage and overtime standards for most private and public workers in the United States. It is enforced by the U.S. Department of Labor. According to FLSA, employees that work over 40 hours during a workweek are entitled to one-and-a-half times their pay for every extra hour worked. Workweeks can start on any day of the week, but must consist of seven consecutive days. The hours of two or more workweeks cannot be averaged to avoid overtime pay even if the employee is paid on a bi-weekly basis. The Sullivan employees worked an average of 2.2 hours of overtime each week, so they should have received one-and-a-half times their pay for those extra hours.

Sullivan University Systems claimed the employees involved in the lawsuit were exempt, which means they were not covered by the overtime portion of FLSA. Most companies that make less than $500,000 per year are not required to pay overtime, but schools of all types, including "institutions of higher education" must pay overtime regardless of their annual income. Certain types of employees are exempt from receiving overtime according to FLSA, a complete copy of which can be found on the U.S. Department of Labor website. Examples include executives, outside salespeople, certain professionals, newspaper delivery people, babysitters, workers on small farms, and people employed at sea. An attorney for Sullivan said the employees were treated as professionals, and were paid well, but the school agreed to re-classify them as non-exempt as part of the settlement. They will now be required to clock in and out and their base pay will be reduced to compensate for the overtime they receive, making their earnings the same.

The employees involved in the suit also claimed that proper records of their hours were not kept. According to Kentucky wage and hour laws,

Every employer subject to the provisions of the Kentucky Minimum Wage Law shall make and preserve records containing the following information:
(a) Name, address, and Social Security Number of each employee;
(b) Hours worked each day and each week by each employee;
(c) Regular hourly rate of pay;
(d) Overtime hourly rate of pay for hours in excess of forty hours in a workweek;
(e) Additions to cash wages at cost, or deductions (meals, board, lodging, etc.) from stipulated wages in the amount deducted, or at cost of the item for which deductions are made;
(f) Total wages paid for each workweek and date of payment.
These records do not need to be kept in a specific format, but employers must retain them for at least one year. Requiring the employees to clock in and out will at least provide Sullivan an accurate record of the hours worked by each employee.

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November 4, 2010

Another Great FLSA Settlement Approved

Last week, a federal judge approved a $2.33 million settlement in a state based on violations of the Fair Labor Standards Act. The case Wilcox v. Alternative Entertainment, Inc. was litigated in the Western District of Wisconsin.

The employees were satellite installers who claimed the company failed to pay them overtime and further suffered from unlawful deductions from their pay. The class included over 900 employees in two states: Wisconsin and Michigan.

When certain employees works overtime, they may be entitled to pay at a rate of one and half times their typical hourly rate (or double time if they work particularly long hours). If you or someone in your family working overtime without being paid, you should talk with a wage and hour attorney about your rights.