Obama Catches Overtime Pay Violators

Obama Catches Overtime Pay Violators

 

The Obama administration has vowed to protect the average worker.  The U.S. Department of Labor is pursing industries that have notoriously abused workers by not paying them minimum wages or overtime pay.  Here are a few of the companies that have been caught. 

 

Garment Company Caught and Punished

 

A garment company in Los Angeles, Laundry Room Clothing, Inc., was ordered to pay nearly $100,000 in back wages to 53 workers and the company was enjoined from shipping any goods that were made by workers who where deprived of overtime pay or minimum wages. 

 

Gas Station Workers Win in New Jersey

 

In another case, Raceway Petroleum, Inc., a New Jersey gas station operator with 700 employees, was ordered to pay $3.9 million in overtime pay and fines.  Some gas station workers put in more than 100 hours a week and were not paid overtime. 

 

Grocery Store Workers in New York City Recover Overtime Pay

 

A grocery store chain in Queens, New York abused workers by not paying them any wages in some cases, and not paying minimum wages or overtime pay.  A total of 38 workers recovered $288,000 in unpaid wages.   The DOL found that some employees who bagged customers food were not paid at all and instead had to rely on customer tips. 

 

Overtime Pay in a Nutshell

Overtime pay is governed by federal and state law.  The federal law is called the Fair Labor Standards Act (FSLA).  These federal and state laws provide that employees should get overtime pay unless they fall into specific narrow exceptions.  Under these laws, an employee must be paid time-and-a-half (overtime) for each hour worked over 40 in a week.  This rule does not apply to someone who falls into one of the exemptions. 

 

California provides even more overtime pay protection.  If you work in California, you not only get time-and-a-half for each hour worked over 40 in a week, you also get 1.5 times your normal rate for each hour over 8 worked in a day, plus double time for each hour worked over 12 in a work day, an unpaid 30 minute meal break after 5 hours, and a 10-minute rest break every 4 hours.  Those are the basics of overtime pay.  The picture can get murky once you get into all of the exceptions to overtime pay. 

 

Generally, everyone is assumed to be entitled to the overtime pay rules described above.  But, companies are free classify their employees as exempt from these overtime laws if they fit into any of the narrow exemptions.   Companies often try to classify their employees as exempt because then they get more work out of their employees for less.   The problem is that many companies go to far and exempt many workers who really are entitled to overtime pay.  Employees can challenge their employers by filing a claim with the Department of Labor or by suing the company themselves.   

 

One of the more common tricks companies use is to misclassify an employee as exempt from overtime pay and pay the person a salary.   People generally assume that salaried employees are not entitled to overtime pay, but this is wrong.  Your title or pay formate (salary vs. hourly) makes no difference. If  you want to know if you are entitled to overtime pay you can call our law firm and we will tell you - it is fairly easy to make this determination in most cases. 

The 3 Things to Know about Rest Breaks in California

In California, employees ARE entitled to rest breaks.   Here are the 3 key points to remember:

1.  You are Entitled to a 10 minute break every 4 hours

California employees must be provided with a 10-minute paid rest period for every four hours worked. The 10 minute rest period should be in the middle of the work period. 

 

2.  If You Don't Get a Break, You are Entitled to an Extra Hour of Pay

If your employer does not let you take your 10 minute break after four hours, then your employer must pay one extra hour of pay at your regular rate for every day that a rest break is not provided.  

 

3.  You can Enforce Your Rights if a Break or Extra Pay is Not provided

If your employer does not provide the required rest break or pay you the extra one hour of pay at your regular rate, then you can file a wage claim with the the Division of Labor Standards Enforcement.

 

 

If I Work Unapproved Overtime, Am I Still Entitled to Overtime Pay?

People call and ask this question all of the time. We always tell them that yes, your employer does have to pay you overtime even if they did not approve it.

Federal and state labor law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee's regular rate of pay for all hours worked in excess of 40 hours per week.  In some states, overtime rates apply to all hours worked over 8 in a day and require double pay for each hour worked over 12 in a day.  

An employer can discipline an employee if he or she violates the employer's policy of working overtime without the required authorization. However, the wage and hour laws require that the employee be compensated for any hours he or she is "suffered or permitted to work, whether or not required to do so." Case law holds that "suffer or permit" means work the employer knew or should have known about. Thus, an employee cannot deliberately prevent the employer from obtaining knowledge of the unauthorized overtime worked, and come back later to claim recovery. The employer must have the opportunity to obey the law.

Loan Officers Should Get Overtime Pay - Says U.S. Dept. of Labor

On March 24, 2010,  the U.S. Department of Labor issued a ruling finding in favor of loan officers around the nation.  Now, most all loan officers are clearly entitled to overtime pay.   This question had been hotly disputed for years.  In fact, the U.S. Department of Labor had previously said that loan were not entitled to overtime pay and courts around the nation had come to inconsistent rulings.

In the past, federal courts and the U.S. Department of Labor held that most loan officers were exempt from the overtime pay laws because they were "administrators."  Administrators are exempt from overtime under the Fair Labor Standards Act. 

The new opinion letter from the Department of Labor, however, reversed course and concluded that loan officers are production employees.  Production employees are those who work on producing the product or service provided by the employer. In this case, loan officers help produce the companies product - loans.   Since loan officers are production oriented, they are not considered administrative employees and therefore they are entitled to overtime pay. 

It is now clear that standard loan officers are entitled to overtime pay.  This long running dispute has been resolved in favor of the loan officers.  

Independent Contractors are Not entitled to Overtime Pay and Benefits

People who are classified as independent contractors are not entitled to the following benefits and protections:

- No right to overtime pay

- No right to minimum wages

- No right to pay for rest breaks or meal periods

- No right to reimbursement for business expenses

- No right unemployment insurance, disability insurance or social security

- An independent contractor is also responsible for paying taxes that are normaly paid by an employer.

- Companies usually do not provide indendpenent contractors with the health benefits that are provided to employees

The only true benefit of being an independent contractor is some measure of freedom and flexability.   If a person is truly an independent contractor, then they will have control over their hours, the location of the work, the pay structure, and the nature of the work being performed.  Unfortunately, companies often misclassify people as independent contractors and treat them like employees.  In this situation, the individual does not realize any of the benefits of being an indepdent contractor and loses the benefits of being an employee.   

It is illegal for a company to classify an employee as an indepedent contractor.  Emmployees have challenged the independent contractor classification and recovered money for unpaid overtime.   In an upcoming post, I will explain how you can determine if you are an employee or an independent contractor.  

 

Overtime Pay Theft is a Global Crisis

By some estimates, employers in the United States steal 19 Billion in unpaid overtime per year from workers.    The federal government does not have the resources to protect workers from rampant wage theft.  Likewsise, accross the Atlantic, an article today reports that "unpaid overtime soars to extreme levels."  The article says that over 900,000 people in the United Kingdom worked "extreme" levels of unpaid overtime in 2009.  Single women are exploited the most with an average of 7 hours of unpaid ovetime per week. 

Employers are not paying overtime because they know they can get away with it. The federal government's Department of Labor is supposed to enforce the overtime laws, but the Department is a typical dysfunctional government office.  The Bush administration neglected the department and it will take years to recover.  Workers in America cannot rely on the government to protect them from wage theft.  If you call the U.S. Department of labor, you will get voicemail and leave a messsage that will not be returned.  There is a story about a caller reporting child labor abuse with kids being forced to use circular saws in a meatpacking plant during school hours - the call was not returned.  Forget the government.  

Since the government cannot stop overtime pay abuses, what is the alterntive?  The only real option that remains are private overtime pay suits.   Sadly there are not enough law firms that do this kind of work - but that is changing.  Law firms can efficiently represent large groups of workers in class action cases.  This is one of the best ways to protect workers from overtime pay theft.  We just opened an office in San Francisco to focus on overtime pay cases and our office in New York City is regularly filing these cases.  See our New York blog for more on overtime pay.