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Once again, our economy is changing. Just like the industrial revolution brought new opportunities for advancement, the digital economy is also bringing with it new ways for people earn a living – either full time or on the side. While this can bring tremendous opportunity for enterprising workers, companies have taken advantage of the new “gig economy” by classifying their employees as independent contractors, even if they don’t qualify.

While working as an independent contract can come with perks like being able to make your own hours, there are downsides, such as paying your own Social Security and self-employment tax. At the same time, companies using independent contractors don’t have to pay Social Security or employment tax on their independent contractors, although they do sacrifice a certain amount of control over the workers as a result, and they usually pay a little more by the hour, day or project.

But lately it seems like companies want to have their cake and eat it, too. Lawsuit after lawsuit has been filed against major companies for allegedly misclassifying their workers as independent contractors, even when they allegedly don’t meet all the requirements. Such a situation puts workers at a significant disadvantage when they have to bear all the financial burdens of being an independent contractor, without any of the perks.

The California Supreme Court has recently agreed to hear a case involving such allegations against Dynamex Operations. In doing so, the court may decide to reconsider California’s previous definition of “employee” and the Court may decide on a new test to determine whether a worker is an employee or an independent contractor. Since 1989, courts have been using the Borello test, but that might not be enough to handle the needs of workers almost 30 years later. Continue reading

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For years we have been seeing more and more companies trying to force their employees into arbitration agreements – meaning they can’t file class action lawsuits against the company, and even if they’re successful in arbitration, the private nature of arbitration means they can’t let other employees (or potential employees) know about their claims or the outcome. Now Baylor University Medical Center is allegedly trying to stop employees from participating in lawsuits against the company, even after their employment has been terminated.

According to the National Labor Relations Board (NLRB), Baylor was allegedly trying to restrict an employee’s rights beyond her work for the company by including clauses in her contract that offered her $10,000 in exchange for refusing to participate in other claims brought against the company, unless required to do so by law. They also required her to keep confidential any information about Baylor that she may have acquired while working there, and to refrain from making any disparaging remarks about the company.

The law recognizes a need to balance the needs of a business to protect itself and its interests against the need to protect workers’ rights. That’s why confidentiality and non-disparagement clauses can be enforceable in employment contracts, but only if the company can prove that such clauses are necessary for protecting their legitimate business interests. According to an administrative law judge (ALJ), Baylor failed to put forth any legitimate business interests that would be endangered without the presence of their confidentiality and non-disparagement clauses in their employment contract. Continue reading

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Of the low paid, hourly employees who are susceptible to getting ripped off by their employers through underpayment and refusal to pay for work performed, delivery drivers are one of the most vulnerable groups. They are tipped employees, which means employers can pay them the reduced minimum wage of $2.13 per hour as long as the combination of their tips and wages equals at least the regular minimum wage. If their tips and wages do not add up to the regular minimum wage, the employer is required to make up the difference with additional wages.

Delivery drivers have an especially hard time making ends meet because, in addition to living expenses, they also generally have to supply their own vehicle in order to make the deliveries. That means car insurance, gas, and the costs of maintaining the vehicle, all of which can add up quickly. As a result, several companies who offer delivery services have been hit with allegations of wage and hour violations by their delivery drivers who claim that, when the costs of maintaining a vehicle to perform the deliveries are taken into account, they earn less than the legally required minimum wage.

One such lawsuit has recently been filed against Domino’s Pizza and two of its Illinois franchisees by a class of current and former delivery drivers who claim they are being paid less than minimum wage. The lead plaintiff in the wage and hour lawsuit, Samantha Young, used to deliver pizzas for a Domino’s location in Willowbrook, and she is seeking to represent a class of delivery drivers who currently work, or have worked, at two multi-location Domino’s franchisees in Illinois: Rolling in the Dough and JWG. According to claims in Young’s complaint, the combination of the delivery drivers’ required expenses for their vehicles, uniforms, and the untipped work they perform in store, all added up until Young and her fellow delivery drivers were allegedly being paid less than minimum wage. Continue reading

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In addition to the federal Fair Labor Standards Act (FLSA) and local labor laws that regulate things like overtime and the minimum hourly wage an employee can be paid, Illinois also has the Day and Temporary Services Act, which protects day laborers and temporary workers in Illinois who are even more vulnerable than full-time and part-time minimum wage employees. Day and temporary workers are more likely than other employees to become victims of minimum wage and overtime violations, and are less likely to be paid or to be paid in full, for all the hours they worked.

One of the biggest problems these workers face is employers who want to keep them “on call” for days they may or may not need to come in. Workers are required to keep this time open in case their employer needs them to come into work, but if the employer does not need them, then they don’t get paid for that day and were unable to work another job during that time.

Under the Illinois Day and Temporary Services Act, employers are required to pay their workers at least four hours’ worth of wages on the days that workers have to set aside but are not required to come into work.

Temporary laborers who are hired through staffing agencies are entitled to employment notices from their agencies telling them the days they’ll be working, what kind of work they’ll be doing, the wages they’ll be paid, and whether meals and/or transportation will be provided. They are also entitled to pay stubs that detail the number of hours they spent working within the pay period, the hourly wage they earned, the total amount they were paid during the pay period, and any deductions taken from their pay for things like taxes or equipment. Continue reading

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Internships were designed as a way for students to get some hands-on training, experience, and make some connections, but employers often take advantage of this system to put students to work for free so they can avoid paying employees. Many lawsuits have been filed against employers by interns alleging they should have been compensated for the work they did.

Although the line between intern and employee can sometimes be a bit vague, the Second Circuit Court recently began recognizing the “primary beneficiary” test to determine if a worker should be classified as an intern or an employee. The test is composed of seven parts, although more factors can certainly be considered. The aspects used by the Second Circuit include:

  • Whether both parties agree ahead of time that there is no compensation expected;
  • Whether the intern will receive training on par with the kind they would receive in an educational setting;
  • Whether the intern can receive educational credit for the internship and/or the internship is connected with some sort of formal education program;
  • Whether the internship corresponds with the academic calendar in order to accommodate the intern’s educational commitments;
  • Whether the duration of the internship is limited to the period that provides the student with education and experience that benefits them in their education;
  • Whether the intern’s work takes the place of work normally done by employees; and
  • Whether both parties understand there is to be no expectation that the intern will receive a paid job offer once they’ve completed their internship.

Continue reading

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While employees being made to work off the clock is a serious issue that needs to be addressed, one must be careful about how it is addressed. A plaintiff bringing a complaint of this sort may have a case for missed wages and for performing work-related tasks for which they were never paid, but filing allegations that their employer paid them less than the federally mandated minimum wage may not always be advisable, depending.

While some employees have managed to achieve settlements, or even court rulings in their favor when claiming missed wages, two recent wage and hour lawsuits against SkyWest Airlines have just been dismissed.

The class action lawsuits were filed by Andrea Hirst and Cheryl Tapp, both of whom worked for SkyWest from 2010 until 2015. They filed separate lawsuits against their former employee, alleging they had been paid less than minimum wage because of all the off-the-clock work they had allegedly performed without pay.

While SkyWest claims it pays each flight attendant no less than $17 per hour, that rate was allegedly only paid for the time flight attendants spent on the airplane with the cabin door closed. That meant they were not paid for any of the allegedly necessary tasks they performed before the cabin door was closed and after it was opened. These tasks included cleaning up after customers, clearing airport security, and reading and responding to emails with essential information regarding their upcoming flights. According to the lawsuits, when taking into account the extra hours flight attendants spent working for SkyWest, their wages allegedly fell below $7.25 per hour – the federal minimum wage an eligible, hourly worker can be paid while working in the United States. Continue reading

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In addition to the federal minimum wage (which is currently still set at $7.25 per hour), each state, county, and city set their own minimum wages and employers are required to pay their workers no less than the highest minimum wage for their area. This remains true no matter how the employees are paid. Whether it’s hourly, by day, by project, on commission, or a salary, every worker is entitled to receive at least minimum wage for all the time they spend working.

According to a recent class action wage and hour lawsuit against Life Time Fitness Inc. in Illinois, fitness trainers were paid on commission and allegedly misclassified as exempt from overtime. If they earned less than 1.5 times the minimum wage through their commission, the difference was paid using something the gym called a “draw,” but that amount would be deducted from a later paycheck when the trainer made more than 1.5 times the minimum wage through their commission. These draws were also allegedly applied to their manager’s paycheck.

Instead of encouraging trainers to solicit more business, most managers chose to respond to this financial penalty by cutting corners with the hours of the trainers they supervised. Managers allegedly encouraged their trainers not to clock in until they were actively serving clients and to clock out as soon as they were done servicing clients. All the other tasks trainers were required to do, such as cleaning equipment, conducting fitness tests on prospective clients, and spending time on the gym floor to solicit new business, were allegedly done without pay. Trainers who failed to comply were allegedly fired as a result. Continue reading

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Employers are allowed to pay their tipped workers a lower minimum wage than workers who do not earn tips, but paying them tips without any wages is not legal under the federal Fair Labor Standards Act (FLSA) of 1938. Even when tipped employees are paid the lower minimum wage, the tips they earn, plus their wages, must add up to at least the standard minimum wage to which all other workers are entitled. If their earnings fall below the standard minimum wage, the employer is required to make up the difference.

According to a wage and hour lawsuit filed against Café Misono Inc. by the Department of Labor (DOL), the restaurant allegedly refused to pay at least one waiter anything at all, requiring that employee to live off their tips alone. Continue reading

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Although arbitration was not designed to handle class actions or collective actions, mediation with the help of an arbitrator can be achieved for a group of plaintiffs, with the help of class representatives, as in the recent wage and hour lawsuit against Google Fiber Inc. and ITC Service Group Inc.

Google Fiber hired ITC as a contractor to install and service Google’s products in Kansas City, one of the cities in which Google provides its own brand of internet and TV services. While working on Google Fiber’s products, employees for ITC allege they were made to perform work for which they were never paid, including work they performed before their shifts began, and work they did over their unpaid lunch breaks when they were “clocked out.”

The lawsuit further alleged supervisors were misclassified as exempt from overtime, even though they allegedly did not meet all the requirements for the FLSA’s overtime exemption.

When the lawsuit was first filed, ITC was the only defendant listed on the complaint, but Google Fiber was later added as a second defendant. Not only were the ITC workers performing work for Google Fiber, but they also allege that they were made to announce themselves as Google employees and wear gear bearing the Google brand while on the job. As a result, the complaint alleged Google was at least partially responsible for the alleged wage and hour violations. Continue reading

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The idea of being one’s own boss is very appealing to many people all across the country, although it often sounds better in theory than it works out to be in practice.

The rise of the so-called “gig economy” in recent years, as a reaction to both the recent Great Recession and an increased ability to telecommute and do odd side jobs on a regular basis, has given millions of Americans the chance to be their own boss.

But are they really their own boss?

The federal Fair Labor Standards Act (FLSA) provides certain protections for employees, including defining overtime, requiring they be paid a premium hourly rate for all the overtime they spend working, defining minimum wage, and requiring employers to help pay taxes and social security benefits for each of their employees. Continue reading