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In order for plaintiffs to file a class action lawsuit, they have to file a proposal with the court for their lawsuit to be certified as a class action. After that it’s the responsibility of the judge to determine if the plaintiffs meet the requirements for a class action.

There are several requirements plaintiffs need to fulfill in order to qualify for class action status, but the two most important are probably the need for enough plaintiffs to justify class action status (numerosity) and that the alleged violations were common practice with the defendant instead of an occasional incident or mistake (commonality).  There are a few different ways for plaintiffs to prove they fulfill these two requirements, including providing a list of potential class members and/or testimony from named plaintiffs.

In the case of the recent overtime class action lawsuit against Gem Financial Services Inc., a pawnshop chain, the testimony of two of the named plaintiffs was enough to convince U.S. District Judge Brian M. Cogan that the employees sufficiently satisfy the commonality requirement for initial certification of the class.

David D., Diori J., and Natacha T. are the three named plaintiffs who, together, filed the class action wage and hour lawsuit against Gem Financial.

Diori worked as an accountant for Gem Financial and she alleged they made her submit inaccurate time records and pay employees the incorrect amount on a regular basis. Continue reading

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Employers have a few different options when it comes to how they pay their employees. Although the standard annual salary and hourly wage are the most common and well-known forms of payment, other options include paying employees on commission or on a per-day or per-project basis.

Regardless of how employers pay their workers, there are various federal and local labor laws they need to be sure to obey.

The federal Fair Labor Standards Act (FLSA) requires employers to pay their workers a minimum wage of $7.25 per hour, or more if the local minimum wage is higher. The FLSA also defines overtime as any time spent working after eight hours a day or forty hours a week. By law, employers are required to pay all their nonexempt, hourly workers one and one-half times their normal hourly wage for all the overtime they spend working. Continue reading

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The federal Fair Labor Standards Act (FLSA) defines overtime as any time spent working after eight hours a day or forty hours a week and requires employers to pay all their hourly workers one and one-half times their normal hourly wage for all overtime worked. The FLSA does provide allowances for certain types of employees to be held exempt from the overtime requirement, but the law is very specific about the requirements employees need to meet in order to be classified as overtime exempt.

One of those requirements is that employees must be paid an annual salary of at least $23,600. That’s more than the federal minimum wage, assuming the employees don’t work overtime. But if they work enough overtime that their total hours divided by their salary comes out to less than minimum wage, and it turns out they were improperly classified as overtime exempt, the employer could face allegations of failure to pay minimum wage, as well as overtime violations.

Possibly the most commonly misclassified category of overtime exemption is the executive category. In order to qualify for this category, employees must spend the majority of their time at work managing other employees and have direct say in the hiring and firing of those employees.

In order to cut costs, many companies have classified their managers, assistant managers, and supervisors as overtime exempt, regardless of whether they meet all the requirements for the overtime exemption. If these employees spend most of their time at work performing the same tasks as the hourly workers they’re supposed to be managing, it qualifies as a violation of the FLSA’s overtime requirements, and possibly minimum wage requirements. Continue reading

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In order to protect workers who frequently don’t have much leverage when negotiating compensation with their employers, the Fair Labor Standards Act (FLSA) provides a federal minimum wage, defines overtime as any time spent working after eight hours a day or forty hours a week, and requires employers to pay their workers one and one-half times their normal hourly rate for all the overtime they spend working. In addition to the federal requirements to treat workers fairly, each state and city has their own laws protecting local workers, so employers conducting business in the U.S. need to be aware of all the employment laws that apply to them.

Despite the well-known overtime requirements, the FLSA does allow some employees to be held exempt from those requirements, but those exemptions are not as well known. As a result, many employers can get away with refusing to pay their workers for the overtime hours they work if those employees are not sure if they fit into one of the categories that qualify for overtime compensation.

The FLSA is very specific about the requirements employees need to meet in order to qualify for the overtime exemption, but they fit into three general categories: administrative, executive, and professional. Under the administrative category are employees who perform primarily office work and provide administrative assistance directly to an executive. The executive category covers anyone who spends the majority of their time at work managing other employees and has direct say in the hiring and firing of those employees. The professional category consists of any worker whose job requires them to have a certain set of skills or level of education in order to perform their job, such as doctors, lawyers, artists, musicians, etc. Continue reading

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While the U.S. Supreme Court continues to be down one judge, the high court has been holding out on taking strong positions on new issues, such as whether auto service advisors should qualify for overtime compensation under the federal Fair Labor Standards Act (FLSA).

While the FLSA defines overtime as any time spent working after eight hours a day or forty hours a week and requires employers to pay their workers one and one-half times their normal hourly wages for all the overtime they work, the law also allows certain employees to be held exempt from the requirement for overtime compensation. One of the categories of employees that qualify for the overtime exemption under the FLSA is the professional category, which includes any employee whose job requires them to have a particular set of skills or level of education. This category is generally understood to include mechanics and salespeople, among others, but the question currently at hand is whether auto service advisors qualify for the professional category.

Auto service advisors neither sell vehicles nor perform maintenance on them. Rather, they consult with customers as to whether they need service performed on their vehicle, and if so, which services they need. As a result, auto service advisors can’t be qualified as mechanics, although their job requires them to have a similar knowledge base and skillset to mechanics. They also don’t quite fit into the sales category, although their job does mean they play an important role in the sale of services, rather than vehicles, to customers. Continue reading

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The National Labor Relations Act (NLRA) grants all employees working in the U.S. the right to file any claims against their employer as a class action or collective action lawsuit. These types of lawsuits allow many employees with similar complaints against their employer to combine their claims into one large lawsuit. In doing so many employee complaints can come to the attention of the courts and the public that would not otherwise have that chance. Many employees aren’t aware of all their rights under the law, and even if they are aware, their complaints tend to be too small to justify the expense of filing an individual lawsuit.

On the other side of the spectrum is arbitration, which was initially designed for businesses to settle legal disputes among themselves outside of court. Arbitration is handled by an arbitrator who is supposed to be fair and unbiased, but the reality is not always so ideal. Arbitrators are in business to make money and can potentially be biased towards the party that brings them a lot of business, even if they’re unaware of that bias. Arbitration is private (neither the claims nor the results are made public), offers no explanation for the ruling, no opportunity to appeal the decision, and no class actions or collective actions.

Companies have increasingly been including arbitration agreements in their employment contracts to prevent their employees from filing class action lawsuits. Employee advocacy groups have argued these agreements unfairly burden employees by preventing most employees from being able to file any claims against their employer. Continue reading

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When an employment class action is filed, it’s common for the motion for class certification to ask the court to include “all similarly-situated employees,” but a federal Texas judge recently refused to include employees in “similar positions” in a recent misclassification lawsuit against Anderson Perforating Services. Judge Henry J. Bemporad said the inclusion of current and former employees in “similar positions” was too broad, and therefore could not be included in the proposed class.

The class action wage and hour lawsuit was filed by Justin B., who worked for three months in early 2014 as an engineer at Anderson’s various oilfield well sites all over Texas. According to the overtime lawsuit, Justin and other engineers worked between 80 and 110 hours each week, but because they were classified as exempt from overtime, they were never paid for more than half the hours they allegedly spent working for Anderson.

The federal Fair Labor Standards Act (FLSA) defines overtime as any time spent working after eight hours a day or forty hours a week. It also requires employers to pay all their workers a higher wage (one and one-half times their normal hourly wage) for all the overtime they spend working. The FLSA does allow certain classes of employees to be held exempt from the requirement for overtime compensation, but it is very specific about the kinds of employees who qualify for this exemption. Continue reading

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When two or more parties decide to settle a legal dispute outside of court, it’s common for the settlement amount agreed upon to be less than the original value of the claims made by the plaintiff. That’s what makes it a compromise, but if the settlement amount is too much lower than the value of the alleged violations, they may not get approval for the settlement from the court judge.

When determining whether to approve a settlement agreement, the court judge presiding over the case is responsible for determining whether the agreement is fair to both parties. A settlement amount that is too much smaller than the original value of the claims provided might not be fair to the plaintiffs.

A California court judge presiding over a class action wage and hour lawsuit against Frito-Lay has refused to certify a proposed settlement because he says the $600,000 it provides is much too small to be fair to the plaintiffs. Continue reading

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When two parties agree to settle a legal dispute outside of court, it can be mutually beneficial for both parties, but they have to prove to the judge that both parties benefit equally from the agreement. One of the ways they do that is by including a complaint along with their proposed settlement agreement. The lawsuit cannot be considered settled until a court judge has issued both preliminary and final approval of the terms of the settlement agreement.

In a recent class action wage and hour lawsuit against UPS, in which 32,332 seasonal workers allege the shipping company denied them wages and rest breaks under California law, the judge presiding over the case has refused to grant preliminary approval of their settlement until the plaintiffs file an amended complaint.

The proposed class involves thousands of workers who worked for UPS for at least 20 days during the busy holiday season of November and December. The wage and hour lawsuit alleges UPS allowed its seasonal workers to take rest breaks only when they worked shifts of four hours or longer. For every day an employee misses a break, for any reason, she is entitled to one hour’s worth of wages, in addition to all wages, tips, bonuses, etc. earned that day. Continue reading

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In order to save some money, companies frequently hire interns, who are either unpaid or not paid very much. Recently, several companies have had to face legal action from unpaid interns alleging they should qualify as paid employees under the federal Fair Labor Standards Act (FLSA), but most for-profit companies don’t try to save money by using volunteers.

Only not-for-profit companies, such as charities and community organizations, can legally use volunteers. According to the federal Department of Labor (DOL), Rhea Lana Inc. was had volunteers selling items at the company’s semi-annual sales of children’s clothing, toys, etc. The company leases the space and handles the logistics for these events.

The volunteers/consignors who help sell the clothing at these events are not paid for their time, although they are allowed to purchase items before the general public and prominently display their own items for sale in order to improve their own profits. Consignors take home about 70% of the proceeds from the sales of their items.

The DOL sent two letters, both of which explained that Rhea Lana’s use of volunteers at their sales was illegal. One letter went to the company, while another went to the volunteers. Continue reading