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Judge Kokoras of the Northern District Finds That Wholesaler Denied Its Laborers Overtime By Paying a Flat Rate in Nunes v. Chicago Import, Inc.

One work situation that Illinois wage and hour attorneys frequently encounter is one where the worker is covered by the Fair Labor Standard Act (FLSA) and the Illinois Minimum Wage Law (IMWL), but the employer pays the worker through a flat rate. While it is not unusual for certain industries to have alternate systems to the standard hourly rate — such as a “piece rate” standard, where workers are paid by each unit they produce and is legal — you should watch out for employers who use flat-rate schemes when they should be paying an hourly rate.

In Nunes v. Chicago Import, Inc., Plaintiff Jose Guadalupe Nunes and others sued defendant, a wholesale trading company, for unpaid wages, in violation of the FLSA and the IMWL. The plaintiffs worked as laborers for the defendant’s import warehouses, which were typically open for business from Monday through Saturday between 9 a.m. and 8 p.m. Between 2007 and 2010, defendant paid the plaintiffs for their work through an arrangement that did not require them to pay a minimum wage. Instead, the plaintiffs were paid a flat weekly rate that never varied, even if the hours worked each week did. In 2010, defendant began paying hourly wages and requiring laborers to punch in and out on a time clock. Plaintiffs sought wages for hours worked during the time they were paid a flat rate.

While both parties agreed that the plaintiffs were paid a flat rate, they disagreed over whether the plaintiffs worked even 40 hours a week, let alone over 40 hours. The plaintiffs claimed that the hours on the time records were consistent with the hours they worked during the flat-rate period. The defendant claimed that while the plaintiffs worked during business hours, they came in late and left early. The defendant believed that the punch card records contradicted the plaintiffs’ claims about the hours they worked, and pointed to testimony from the plaintiffs that they took 15 minute breakfast breaks two or three days a week. The defendant also pointed to records that showed a discrepancy between the plaintiffs’ claims about what they were paid ($350 one week) and what they were actually paid ($500).

The plaintiffs moved for a ruling in their favor, arguing that the defendants had admitted their liability and had not presented enough evidence to undermine the reasonableness of the plaintiffs’ claims. Judge Charles Kokoras of the Northern District of Illinois ruled in the plaintiffs’ favor on most of the charges, since the defendant admitted that they did not pay the statutory minimum wage or overtime wages. However, the judge resisted issuing an entire summary judgment ruling in favor of the plaintiffs because on the issue of the amount owed, the defendant had provided enough just enough evidence to call the amount into doubt. Therefore, the judge allowed the case to continue to determine just how much the plaintiffs were owed.

The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. Contact a Bolingbrook wage and hour lawyer at the Chicago Overtime Law Center today at 312-869-4095.