Fair Labor Standards Act in Georgia

New Department of Labor Regulations Will Take Effect This Summer


dcbf3954 : April 18, 2016 3:34 pm

NEW DOL EXEMPTION REGULATIONS WILL TAKE EFFECT THIS SUMMER

Unless Congress succeeds in blocking them (a highly unlikely event) the U.S. Department of Labor (“DOL”) will be making making some significant changes to the regulations governing which executive, administrative, and professional employees (white collar workers) are exempt from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime pay protections—and both public and private employers need to be ready.

Under the FLSA, “non-exempt” employees are entitled to overtime pay once they have worked 40 hours in a regular 7 day pay period (or the maximum hours in a law enforcement or public safety role for those agencies that take advantage of the other than the 7 day pay period). “Exempt” employees are not entitled to overtime pay. The largest category of exempt employees is known as the “white collar” workers. “White collar” workers generally fall within the exemption only if they meet all of the following three requirements:

  1. Salary Basis: The employee is paid a predetermined, regular, fixed amount, without regard to the number of days or hours he or she works or the amount of work he or she produces.
  2. Salary Threshold: The employee earns a minimum salary of $455 per week, or $23,660 per year.
  3. Duties: The employee’s duties involve certain tasks, authority, or training.

With respect to the third requirement (duties), the regulations provide some specific guidance. “Professional” employees generally include those in the learned professions (lawyers, doctors, teachers, architects, etc.). An “executive” employee heads up a recognized unit or sub unit of an enterprise, regularly supervises at least two other full time employees or 3 or more part time employees whose combined hours total at least 89 each week. In addition the executive must be primarily involved in management duties, and have the authority to hire or fire or to effectively recommend such action. Finally, the “administrative” exemption includes employees who exercise independent judgment, and whose primary duty involves office or non-manual work that is directly related to management or business operations. These functional or “duties” tests have not changed.

What the new DOL rule has changed is that it has increased the current salary threshold necessary for claiming the exemption from $455 per week ($23,660 per year) to $970 a week ($50,440 a year). It also will implement automatic annual increases to the salary threshold, tied to certain economic indices.

To remain compliant with the regulations and avoid potential litigation, employers must identify those employees whose status may be affected by the anticipated salary threshold revisions. Now is the time to conduct an internal wage and hour audit to assess your employees’ FLSA classifications. This assessment should become an annual practice.

When evaluating employees’ status, keep in mind that not every employee who receives a salary is automatically exempt—they must also perform exempt duties. You should assess an employee’s day-to-day duties in order to determine whether or not those duties fall within the parameters of the regulations. You may find that a few employees fall into the gray area between exempt and non-exempt status. In such cases, it is prudent to err on the side of paying them as if they have non-exempt status. Bear in mind that the employer always must carry the heavy burden of proving that an employee to whom the employer does not pay overtime clearly falls within the terms of an exemption. With careful review and early preparation, your company can be equipped to act when these sweeping changes to the law go into effect.

Please call Michael A. Caldwell if you have any questions about implementing the new Regulations or conducting a wage-hour audit for your operations.

 

 

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FedEx Misclassification of its Drivers as “Contractors”


dcbf3954 : November 22, 2014 10:20 am

CNN has a great article on Federal Express’s intentional practice of misclassifying its drivers as independent contractors in order to save the company from paying overtime, worker’s compensation and unemployment benefits. Transferring a company’s inherent business risks onto its employees is a an old practice but it may also be illegal under the Fair Labor Standards Act.  If a company controls your day and you are “economically dependent” on that company, you are likely an employee rather than an independent contractor. This is especially true if the work you do is directly related to the company’s business primary business. For instance, a plumber who comes in a few hours a week on her own schedule to fix the pipes at FedEx may be a legitimate contractor. A person who spends 60-70 hours each week delivering packages — FedEx’s core and primary service — is likely an employee. If you believe you have been misclassified, please give us a call. We will be happy to meet with you without charge to see if we can help you to recover the wages you should have earned plus the same amount as liquidated damages.

http://money.cnn.com/2014/11/20/news/companies/fedex-driver-lawsuit/index.html?hpt=hp_t2

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Michael Caldwell : October 29, 2013 8:39 am

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record-keeping and youth employment standards for workers in the private sector and government.  Covered non-exempt workers are entitled to overtime pay of at least 1.5 times regular pay if they work more than 40 hours per week.

Auto Deducting Lunch and Other Breaks.

Many employers track employee work time through the use of computerized systems.  Some employers program their computers to deduct a one hour lunch period each day, whether or not the employee actually takes a lunch break of that duration or any lunch break at all.  If you are not actually relieved from duty during an auto-deducted lunch break, the auto- deducted time should be added back in in order to determine if you have cleared the forty hour weekly overtime threshold.  If the employee is never allowed to take a lunch break and the time is nevertheless auto-deducted, the employer may face substantial exposure for backpay, liquidated damages and attorneys’ fees.

Reality trumps under the FLSA. If you work through a break, you must be paid for it.

If you are an employer or an employee and have questions about the Fair Labor Standards Act, call the FLSA experts at DeLong Caldwell Bridgers & Fitzpatrick, LLC, Charles Bridgers and Kevin Fitzpatrick, at (404) 979-3150 for a free consultation.  For more information, check out our publication,  Are You Entitled to Overtime Pay?

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Nightclubs violated law by requiring workers to pay tabs of deadbeat customers, says top Minn. Court


Charles R. Bridgers : September 7, 2013 12:08 pm

 

Minnesota law protects nightclub workers who were forced to cover the tab for deadbeat customers who didn’t pay their bills or failed to sign credit card receipts, the Minnesota Supreme Court has ruled.

Source: http://www.elinfonet.com/headcount.php?ID=32957

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Scantland v. Jeffrey Knight, Inc.


Charles R. Bridgers : August 13, 2013 7:24 am

The Fulton County Daily Report recently ran a detailed article on a a recent Eleventh U.S. Circuit Court of Appeals decision on misclassification of workers as independant contractors, rather than employees.

From the Article:

A recent Eleventh U.S. Circuit Court of Appeals decision issued a strong admonition to employers: the misclassification of workers as independent contractors rather than employees may have serious financial and operational repercussions for businesses.

As one Florida employer just learned, such outcomes may include lengthy and expensive Fair Labor Standards Act (FLSA) litigation resulting in the certification of a class of more than 500 workers entitled to years of unpaid overtime wages. In Scantland v. Jeffry Knight Inc., the Eleventh Circuit reversed a district court decision granting summary judgment to Knight and held that, if all justifiable inferences were drawn in their favor, a group of cable installers who brought a collective action under the FLSA against Knight were statutory employees, not independent contractors.

Courts in the Eleventh Circuit apply the now familiar six-factor economic realities test to determine whether workers are properly classified as employees or independent contractors for purposes of the FLSA. Although the six factors are not exclusive and no one factor is dominant, each serves as a guidepost in assessing whether a worker is so dependent upon his or her employer so as to come within the protection of the FLSA or sufficiently independent so as to fall outside the reach of the mandatory provisions of the statute.2

In making classification determinations, businesses should evaluate material facts relevant to each criterion through the lens of “economic dependence” to assess whether the relationship with each worker is more analogous to the “usual path” of employee or independent contractor.3 The factors are:

1. The nature and degree of the alleged employer’s control as to the manner in which work is to be performed

2. The alleged employee’s opportunity for profit or loss depending upon his managerial skill

3. The alleged employee’s investment in equipment or materials required for his task or his employment of workers (i.e. subcontractors)

4. Whether the service rendered requires a special skill

5. The degree of permanency and duration of the working relationship

6. The extent to which the service rendered is an integral part of the alleged employer’s business.

http://www.dailyreportonline.com/PubArticleFriendlyDRO.jsp?id=1202614936553

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Eleventh Circuit Issues Sweeping Opinion Clarifying FLSA Regarding: Salaried Workers and the Fluctuating Workweek


Kevin D. Fitzpatrick, Jr. : April 1, 2013 10:31 am

On March 6, 2013, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion in the case of Lamonica, et al v. Safe Hurricane Shutters, Inc., et al, Case 11-15743.  This was an action brought by nine plaintiffs who installed hurricane shutters for the defendant who claimed that the defendants had failed to pay them at one and one half times their regular rate for work in excess of forty hours a week.  The case had been tried before a jury, resulting in an award of damages to the plaintiffs.  The defendants then appealed to the Eleventh Circuit.

Finally, the defendant argued that the jury had miscalculated the damages owed to the plaintiffs.  In cases where an employee is paid by the hour, it is relatively simple to determine the overtime rate, i.e., one and one half times the regular hourly rate.  In cases where the pay is by something other than hourly, (e.g., salary, commission, piece work, etc.) the overtime calculation is more complex.  The plaintiffs in this case were salaried workers, i.e., they were paid the same amount regardless of the number of hours they worked each week.

One method of calculating overtime pay for salaried workers is called the “fluctuating workweek method.”  Under this method, the employee’s regular hourly rate is determined on a week by week basis by dividing the salary paid by the number of hours worked.  If the employee worked 50 hours in a week, for example, and her salary for that week was $500.  The fluctuating workweek method would produce a regular rate of $10 an hour (500/50) and an overtime rate of $15 an hour (10 x 1.5).

There are two significant disadvantages with the fluctuating workweek method.  First, the formula produces a smaller regular rate and correspondingly a smaller overtime rate with every hour worked.  If, for example, our $500 a week employee worked 60 hours in a week, her regular hourly rate would be $8.33 (500/60).  Her overtime rate would then be $12.50 (8.33 x 1.5).  Assume further that the employee worked a different number of hours each week.  Her regular rate and her overtime rate would then also be different each week.

The second disadvantage of the fluctuating workweek is the remedial effect.  The fluctuating workweek method assumes that the employee has already been paid a legal regular rate for every hour worked.  The remedy that she is entitled to, therefore, is the difference between the amount that she was paid and the amount that she should have been paid.  If she has already been paid $10 an hour for every hour worked, therefore, her remedy is payment of an additional $5 an hour for every overtime hour worked.  Under the fluctuating workweek, therefore, an employee who works a 50-hour week for a $500 salary would be entitled to an additional $50 in back pay and $50 in liquidated damages.

The fluctuating workweek method is not the only method for determining the amount of damages owed to a salaried worker in an FLSA overtime case.  In lieu of the number of hours worked, a court could also determine the regular rate based on the number of hours that the salary was intended to compensate.  In the case of our $500 a week employee, for example, assume that her salary was only intended to cover 40 hours a week.  In that case her regular rate will be $12.50 and her overtime rate will be $19.25.  Using this method, there is assumption is that the employee has not been paid at all for her overtime hours.  Ten hours of overtime would thus yield a remedy of $192.50 in back pay and $192.50 in liquidated damages.

The defendants in Safe Hurricane Shutters argued that the lower court had erred by failing to apply the fluctuating workweek method.  The Eleventh Circuit disagreed, finding that “the fluctuating workweek method is not the only or even the default method for calculating damages when an employee is paid a weekly salary.”  Instead, the court held that “the number of hours that the employee’s pay is intended to compensate – not necessarily the number of hours he actually works – is the divisor.”

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Eleventh Circuit Issues Sweeping Opinion Clarifying FLSA Regarding: Individual Liability of Supervisors and Managers


Kevin D. Fitzpatrick, Jr. : March 25, 2013 10:30 am

On March 6, 2013, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion in the case of Lamonica, et al v. Safe Hurricane Shutters, Inc., et al, Case 11-15743.  This was an action brought by nine plaintiffs who installed hurricane shutters for the defendant who claimed that the defendants had failed to pay them at one and one half times their regular rate for work in excess of forty hours a week.  The case had been tried before a jury, resulting in an award of damages to the plaintiffs.  The defendants then appealed to the Eleventh Circuit.

Next, the individual defendants argued that it was wrong to hold them personally liable for damages.  The court dismissed that argument in short order, noting that the FLSA defines an “employer” in part as “any person acting directly or indirectly in the interests of the employer in relation to an employee.”  The court stated, “our primary concern is the supervisor’s role in causing the FLSA violation.”

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Eleventh Circuit Issues Sweeping Opinion Clarifying FLSA Regarding: Undocumented Immigrants


Kevin D. Fitzpatrick, Jr. : March 18, 2013 10:30 am

On March 6, 2013, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion in the case of Lamonica, et al v. Safe Hurricane Shutters, Inc., et al, Case 11-15743.  This was an action brought by nine plaintiffs who installed hurricane shutters for the defendant who claimed that the defendants had failed to pay them at one and one half times their regular rate for work in excess of forty hours a week.  The case had been tried before a jury, resulting in an award of damages to the plaintiffs.  The defendants then appealed to the Eleventh Circuit.

Defendants first argued that the plaintiffs should be barred from recovering overtime pay as a matter of law on the basis of a legal doctrine known as in pari delicto.  This doctrine generally bars recovery to a plaintiff who had participated in the wrongdoing that is the basis of the lawsuit.  Defendants argued that the plaintiffs had failed to report their income to the Internal Revenue Service; had used false social security numbers and were, in fact, undocumented immigrants who were not authorized to work in the USA.

The Eleventh Circuit was not impressed.  It affirmed its prior holding in Patel v. Quality Inn S., 846 F.2d 700 (11th Cir. 1988) wherein it found that undocumented aliens were “employees” who may recover unpaid wages under the FLSA.  The court further found that the in pari delicto argument was unpersuasive because none of the plaintiffs had cooperated with the defendants in violating the FLSA.  The court found that tax reporting and false social security number issues did not have a sufficient causal relationship with defendants’ FLSA violations.

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Retaliation Against Complaints of Improper Pay is Forbidden


Charles R. Bridgers : September 24, 2012 8:23 am

Some employees are reluctant to pursue their rights under the FLSA because they fear that the employer will retaliate by firing them or retaliating against them in some other material way.  The FLSA, however, contains a strong anti-retaliation provision.  Requesting overtime, pursuing a grievance over overtime and filing a lawsuit over overtime are examples of conduct that is protected by the FLSA.  An employer who takes action against an employee because of his or her legally protected conduct often increases its exposure to include equitable remedies as well as compensatory and punitive damages.

If you have questions about the Fair Labor Standards Act, call the FLSA experts at DeLong Caldwell Bridgers & Fitzpatrick, LLC, Charles Bridgers and Kevin Fitzpatrick, at (404) 979-3150 for a free consultation.

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Portal to Portal


Charles R. Bridgers : September 17, 2012 8:22 am

Some employers attempt to stop and start an employees’ work time throughout the day to correspond to the times when they are actually engaged in revenue producing activities.  Using an intermittent workday to determine compensable time can be a very expensive mistake.  As a general rule, all time within the period between the commencement and completion in the same workday of an employee’s principal activity or activities is compensable time.  It includes all time within that period, whether or not the employee engages in work throughout the period.  The only exception is for recognized breaks in which the employee is free of all duty, including the duty to respond to calls.

If you have questions about the Fair Labor Standards Act, call the FLSA experts at DeLong Caldwell Bridgers & Fitzpatrick, LLC, Charles Bridgers and Kevin Fitzpatrick, at (404) 979-3150 for a free consultation.

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