Wage and Hour Claims

August 28, 2015

In 1938 when President Franklin D. Roosevelt signed the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., into law, he characterized it as “the most far-reaching, far-sighted program for the benefit of workers ever adopted in this or any other country.” Over 70 years later, the FLSA remains the centerpiece of U.S. wage and hour laws protecting workers by mandating a minimum wage and overtime compensation. According to the Government Accountability Office, the FLSA protects 130 million workers from substandard wages and working conditions.

Despite these protections, however, many workers are not paid minimum wage or the required overtime premium. For many employees it is because they do not realize that the FLSA guarantees them certain wages. For others it is because their employers refuse to comply with the law.  These employees are owed money and there are legal means to recoup this lost income.

I. Minimum Wage

The minimum wage is the amount per hour that an employer is required by law to pay to each of its employees, unless the employee is exempt. As of July 24, 2008, the FLSA requires that employers pay a minimum wage of $6.55 an hour. On July 24, 2009, the minimum wage will raise to $7.25. The FLSA’s minimum wage requirement applies to all 50 states and the District of Columbia.

II. Overtime Requirements

The FLSA requires that an employer pay a non-exempt employee who works more than 40 hours in a week one and one-half times the employee’s regular rate of pay. In general, the regular rate of pay is the employee’s average earnings per hour based on the employment contract.

When computing whether overtime is owed to an employee, a seven-day workweek is used. Each workweek is a separate unit for overtime purposes, meaning that hours may not be averaged over two or more weeks. If a non-exempt employee works 50 hours the first week of April and 30 hours the second week of April, the employer must pay that employee one and one-half times the employee’s regular rate of pay for 10 hours during that first week of April. The employer does not owe the employee any overtime pay for the second week of April.

The overtime requirement does not apply only to hourly employees.  As long as an employee is not exempt from the overtime provisions of the FLSA, which will be discussed below, the employer must pay overtime even if the employee is paid on a salary, piece rate, commission, fee or daily rate basis.

III. Which Employers Have To Comply With The FLSA?

The protections provided in the FLSA are only available to employees who work for covered employers. For most employers, they are covered as long as they meet two requirements. First, the employer must have employees who engage in interstate commerce, which is the trade, business, and the movement or transportation of goods or money from one state to another. An employer can also fulfill this requirement if it produces goods for interstate commerce, or handles, sells, or works on goods or materials that have been moved in or produced for interstate commerce. Second, an employer must do at least $500,000 of business annually.

Some types of employers, however, are always covered by the FLSA regardless of their dollar volume of business. These include: hospitals; preschools, elementary, and secondary schools; institutions of higher education; and federal, state, and local government agencies.

The FLSA also covers domestic service workers, such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters, if they receive a certain level of base wages from one employer in a calendar year, or if they work a total of more than eight hours a week for an employer.

IV. Who Is Protected By The FLSA?

Even if the FLSA regulates an employer, some types of workers are not covered by the FLSA or are exempted from certain FLSA protections. The following are the most typical examples of exempt employees or workers not covered by the law.

Independent Contractors

Since under the FLSA an independent contractor is not considered an employee, the FLSA does not require that an independent contractor receive minimum wage or overtime. To determine if a worker is an independent contractor or an employee, courts look at factors such as: the degree of control the worker has; the opportunities for profit and loss; the worker’s investment in facilities; the permanency of the relationship; and the skill required of the worker. Courts do not rely on whether an employer has labeled a worker independent contractor or employee.

Executive, Administrative, Professional, and Outside Sales Employees

The FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executives, administrative employees, professionals, and outside sales employees.  Employees qualify for these exemption if they both meet the tests outlined below regarding their job duties and are paid on a salary basis at not less than $455 per week.

  • Executive: (1) the employee’s primary duty must be managing the business, or managing a customarily recognized department or subdivision of the business; (2) the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (3) the employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.
  • Administrative Employees: (1) The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (2) the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
  • Professional Employees: (1) the employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; (2) the advanced knowledge must be in a field of science or learning; and (3) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
  • Outside Sales Employees: (1) the employee’s primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities; and (2) the employee must be customarily and regularly engaged away from the employer’s place or places of business.

V. How Do I Vindicate My Rights?

If an employer has not paid an employee either minimum wage or overtime, the employee may file a lawsuit in federal court for the unpaid wages. You must file a lawsuit in court within two years of the violation for which you are claiming back wages, except in the case of an employer’s willful violation, in which case the employee has three years to file.

Be aware, some states, such as California, have wage and hour laws that may provide you with additional protections.  These laws may require you to file a claim for unpaid wages sooner than the FLSA.

VI. What Are The Available Remedies?

A successful plaintiff can recover not only the unpaid wages owed to her, but also an amount equal to the unpaid wages as liquidated damages, plus attorney’s fees and court costs.  If you have a wage and hour complaint against your employer, contact the experienced attorneys at Katz Banks Kumin for an evaluation of your case with no further obligation.

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