Articles Posted in Exemptions

Published on:

Misclassifying employees as exempt from overtime requirements is bad enough on its own, but the damage done can be compounded when the inaccurate status prevents employees from bringing their grievances against their employer to a court of law.

That’s what happens when employees are forced to sign arbitration agreements, which have become increasingly common throughout all American industries. Having started out as a way for businesses to resolve disputes between each other, companies have increasingly been expanding their interpretation of the Federal Arbitration Act to include relationships between businesses and individuals, such as their employees. Most employment contracts now contain arbitration clauses that require workers to use arbitration to settle all disputes with their employer.

There are several problems with this, with the biggest one probably being the fact that arbitration agreements prevent a lot of cases from ever getting a hearing. Because arbitration is not equipped to handle class actions or collective actions, individuals with small claims against their employer don’t have the opportunity to combine their claims in order to justify the costs of filing the complaint. Without this protection, many small claims go unresolved. Continue reading

Published on:

Class actions are a powerful and important tool for individuals with similar claims against a common defendant. Often, the defendant is a large, powerful corporation with a team of expensive attorneys at its disposal. Most employees and consumers do not have the resources to take on these corporations in court on their own, not to mention the fact that their individual claims are usually too small to justify the expenses associated with filing a lawsuit.

The class action solves all these problems. It allows individuals with similar complaints against a common defendant to combine their claims into one, large claim. It also provides them with the leverage they need to arm themselves with competent legal representation.

But plaintiffs looking to combine their claims need class certification from a court judge, and in order to get that, they need to prove the class meets certain requirements.

One of those requirements is that all the members of the class must have claims and situations that are similar enough to justify filing all their claims together. This is a common target for defendants to attack, often claiming that plaintiffs are not eligible for class certification because their situations are not exactly identical. This view was perpetuated in the Supreme Court’s ruling in favor of Wal-Mart a few years ago, but many judges are still certifying class actions all over the country and maintaining that their certifications are still in line with both the relevant class action law and the Supreme Court’s decision. Continue reading

Published on:

Just because the law requires employers to pay their workers one and one half times their normal hourly wage for any overtime they work does not always mean that paying workers one and one half times minimum wage justifies not paying them overtime. But that was one of the reasons Groupon gave for classifying its company sales representatives as exempt from overtime compensation.

The wage and hour lawsuit was filed in November 2014 by Sean M. and Kenisha W., who are asking the court for the opportunity to be named plaintiffs in the lawsuit. With that title, they would be representing the interests of the approximately 2,000 similarly situated employees who were allegedly denied overtime as a result of Groupon’s employment policies.

According to the complaint, Groupon’s alleged misclassification of its account representatives and account executives led to the company failing to pay those workers overtime when they worked more than eight hours a day or forty hours a week. The lawsuit accused Groupon of allegedly violating the federal Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law by making their employees work overtime without the proper overtime compensation. Continue reading

Published on:

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

Published on:

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

Published on:

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

Published on:

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

Published on:

The federal Fair Labor Standards Act (FLSA) defines overtime as any time spent working after eight hours a day or 40 hours a week. It also requires all employers to pay their workers one and one half times their normal hourly rate for all the overtime they spend working. There are some exceptions to the rule of overtime compensation, but the FLSA is very specific about the types of employees that can qualify for exemption from the overtime compensation requirement. Nevertheless, there are times when the line between who qualifies and who doesn’t can get a little blurry.

Under the FLSA, an employee can qualify to be held exempt from overtime if they fit into one of three categories: administrative, executive, or professional. In order to qualify for the administrative category, an employee must perform primarily office work and provide assistance directly to an executive. For the executive category, an employee has to spend the majority of her time managing other employees, have the authority to discipline those employees, and have direct say in the hiring and firing of those employees. The professional category is made up of all those workers whose jobs require a particular set of skills or level of higher education. Attorneys, doctors, and entertainers are just some of the types of workers who generally fit into the professional category.

Certified public accountants also fit into the professional category, but, according to a recent wage and hour class action lawsuit against PricewaterhouseCoopers LLC, auditors do not. Continue reading

Published on:

The federal Fair Labor Standards Act (FLSA) defines things like minimum wage and overtime in order to prevent employers from taking advantage of their workers. The federal minimum wage is currently set at $7.25 per hour and overtime is defined as any time spent working after eight hours a day or forty hours a week. Under the FLSA, all hourly, nonexempt employees are entitled to one and one-half times their normal hourly rate of pay for all the overtime they work. The FLSA protects all employees working in the U.S., regardless of their citizenship status.

The FLSA does allow for some exceptions to its overtime requirement, but it is very specific about the qualifications employees need to meet in order to be considered overtime exempt. The three main categories for overtime exemption are administrative, executive, and professional. In order to qualify for the exemption under the administrative category, an employee must perform primarily office work and provide administrative assistance directly to an executive. The executive category consists of anyone who spends the majority of her time at work managing other employees. Some of the requirements for this category include being able to discipline the employees she manages, and having significant say in the hiring and firing of those employees. For the professional category, an employee’s job must require them to have a certain set of skills or level of education in order to fulfill their responsibilities. For example, attorneys, physicians, and performers generally fit under the professional category. Continue reading

Published on:

Multiple plaintiffs can have the option to consolidate their claims into one lawsuit if their claims are sufficiently similar. In the case of employee class action lawsuits, this usually requires the plaintiffs to be able to prove that the alleged violations were the result of standard business practices and that they were systematic throughout the company.

Once plaintiffs have been able to prove they qualify for class status, it usually isn’t too hard to combine the lawsuit with other lawsuits against the same defendant with similar claims, if there are any out there. The ability to combine the claims of multiple plaintiffs into one lawsuit benefits the plaintiffs who might not otherwise have an opportunity to bring their claims to court, especially if their claims are small. It also benefits the court because they get to deal with an issue once and be done with it, rather than getting inundated with many lawsuits all dealing with the same issue.

In the case of Cadete Enterprises Inc., a Dunkin’ Donuts franchisee, a wage and hour lawsuit filed by two employees is asking to be combined with another lawsuit filed against the company with similar claims.

The first lawsuit was filed by Gassan Marzuq and Lisa Chantre and alleges Cadete illegally classified its managers as exempt from overtime. Chantre died three days after she and Marzuq filed their amended complaint in 2012, but her estate is continuing to pursue the legal dispute in her interests. Under the federal Fair Labor Standards Act (FLSA), overtime is defined as any time spent working after eight hours a day or forty hours a week. All hourly employees working in the U.S. are entitled to one and one-half times their normal hourly rate for all overtime worked. Continue reading