New York Employment Lawyer Blog

Pharmaceutical giant Novartis received preliminary approval from a New York federal district court judge this week for a $99 million settlement of a lawsuit in which its sales representatives alleged that they were misclassified as "outside sales" under the Fair Labor Standards Act ("FLSA") and denied overtime pay. The class action settlement could affect over 7,000 current and former sales employees.

Over the past few years, pharmaceutical representatives have filed many overtime claims alleging misclassification of sales employees. They have claimed that they do not fall under the "outside sales" exemption and should be paid overtime. The federal court across the country are divided on this issue. This settlement comes at time when the U.S. Supreme Court is considering another case, Chistopher v. SmithKlineBeecham Corp., which involves the same issue of whether the FLSA's outside sales exemption applies to pharmaceutical representatives. The Supreme Court's decision will affect thousands of employees across the country.

The settlement stems from two lawsuits which were filed back in 2006 pursuant to the FLSA and California and New York labor laws. In July, 2010, the U.S. Court of Appeals for the Second Circuit ruled that the FLSA exemption did not apply to the Novartis sales representative, thus finding the sales representatives to be employees under the law. Rather than waiting for the Supreme Court's ruling in the SmithKlineBeecham case, the parties in Novartis decided to settle and not to wait for the Supreme Court's ruling.

The president of Novartis has stated that "We remain confident that sales representatives should continue to be classified as exempt from overtime because their autonomy and incentive compensation are typical of exempt employees as defined by U.S. law."

The FLSA provides an exemption from both minimum wage and overtime pay for employees who are outside sales employees. In order to qualify for the exemption, an employee must meet certain tests regarding their job responsibilities and be paid at least a salary of $455 per week. Your job title along does not give you an exempt status. For example, if your title is that of an outside sales employee, but your primary job duty is to schedule appointments, you are not exempt.

In order to qualify for the outside sales employee exemption, you must meet the following criteria:

-your primary duty must be making sales, or obtaining orders or contracts for services or for the use of facililites for which your client or customer will pay consideration; and
-you must be customarily and regularly engaged away from your employer's place of business.

Make sure your company is properly classifying your workers according to the guidelines under the FSLA. Misclassification can cost your company thousands in litigation costs as well as fines, penalties, and back taxes. Our attorneys have helped many businesses review the job functions of their workers to ensure that they are in compliance with the FLSA. Our attorneys have also helped companies determine if the Voluntary Classification Settlement Program is their best option. Call our Misclassification Attorneys at Villanueva & Sanchala at (800) 893-9645 if you think you might be misclassifying your employees.

Continue reading "Wage and Hour Update: Don't Let Misclassification of Your Employees Cost You Millions" »

New York federal court judge recently conditionally certified a national collective class action lawsuit alleging that KPMG violated the Fair Labor Standards Act ("FLSA") and the New York Labor Law by misclassifying its Audit Associates as exempt and not paying them overtime wages. KPMG is one of the Big Four Accounting Firms which has over 80 offices and 23,000 employees in the U.S. Audit associates working at such public accounting firms are known for putting in grueling overtime hours which range anywhere from 40 to 80 plus hours a week.

In conditionally certifying the FLSA collection action, the court found that the Audit employees were subject to the same policies and procedures concerning their job duties, had the same training, and worked under the same job description. Moreover, they all had to adhere to the same strict professional and regulatory rules and standards governing the accounting profession. The court did not decide the ultimate issue in the case of whether the audit associates job duties renders them as non-exempt employees. The class certification now allows audit associates across the country who are within the 3 year statute of limitations to join in the lawsuit. Our attorneys have helped many employees figure out their proper classification and recover their rightful overtime wages.

Regardless of where you work or what your job title is, your actual job duties determine whether you are a non-exempt employee and entitled to overtime pay. For example, even if you have the job title of Manager but you are basically performing routine, clerical work which is equivalent to the job duties of a secretary, you are a non-exempt employee under the law and entitled to overtime for all hours worked in excess of 40 hours a week.

The FLSA provides an exemption for employees working as bona fide executive, administrative, professional, and outside sales employees, and certain computer related occupations from both minimum wage and overtime pay protection. In order for the exemptions to apply, the employee must meet certain criteria regarding their job duties and be paid a base salary of at least $455 per week. If you think you fall into one of the above catergories, our attorneys can help you figure out if you meet all criteria to be a non-exempt employee.

Misclassification occurs in all areas of industry and affects all types of workers including white-collar workers. By giving employees a great job title and classifying them as exempt, employers reap huge savings by not paying overtime wages. It not only costs the misclassified worker his lost wage in overtime pay but also affects the amount of taxes collected by the government.

The outcome in this case may have wide ranging ramifications for white-collar workers as well as for major accounting and financial companies. If you are an exempt white-collar employee, think about whether your job duties really involve significant, independent judgment. Do you have the power the hire and fire employees? Does your supervisor control every aspect of your job? Do your job duties involve routine, clerical work? These are just a few questions to consider. If you think you are misclassified as an exempt employee and losing out on overtime wages, call our FLSA Attorneys at Villanueva & Sanchala at (800) 893-9645 to discuss and analyze whether you really should be treated as a non-exempt employee and thus entitled to the protections of the FLSA and state law.

Continue reading "Call to White-Collar Workers: Make Sure You Are Not Being Misclassified as Exempt" »