Articles Posted in Overtime Pay and Unpaid Wages

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Intership.Bought.Dollar.Photo.Club.9.9.15.jpgOur Award-Winning New York Employment Law Attorney is often asked to discuss hot topics in the field. Recently, we were asked to discuss the use of unpaid interns by for-profit employers. This is another case where proactive steps can prove to be tremendously valuable for employers because an improperly classified intern can lead to payment of overtime wages, employee benefits, and tax considerations. A brief discussion of general information regarding unpaid internship programs follows. If you have any specific information, feel free to call our office to discuss your specific situation.

In recent years, class action lawsuits have been filed against companies including NBC Universal, Sirius XM, Viacom, The Charlie Rose Show on PBS, Conde Nast, Gawker and Atlantic Records regarding their unpaid internship programs. Many companies opted to settle and some of the cases resulted in multi-million dollar settlements. A few cases have started to make their way through the courts. On July 2, 2015, the Second Circuit issued a decision in Glatt et al. v. Fox Searchlight Pictures, Inc., Nos. 13-4478 & 13‐4481 (2d Cir. 2015), on a case of first impression and provided some insight to employers and interns. The case is discussed briefly below.

The Glatt Case – Background
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Pizza.Worker.Dollar.Photo.Club.4.23.15.jpgSmall businesses in the New York City area increasingly are being investigated by the Department of Labor or being named in a lawsuit for unpaid wages by employees. A government audit or lawsuit can have a significant impact on the lifeblood of a business. Employers are required to pay employees minimum wage (currently $8.75 per hour in New York) and eligible employees must receive overtime pay for all hours worked over forty in a work week. Employers also required to maintain certain payroll and time records. An employer’s failure to maintain payroll and time records and pay wages earned form the basis for two of the most common reasons claims are initiated.

Two franchise owners in the Westchester and Hudson Valley area have agreed to pay $735,000 to settle claims of unpaid wages, overtime pay and reimbursements for use of personal vehicles. Unpaid wages claims were not limited to just these two businesses. In fact, over the past two years, more than 50 Domino’s franchise owners admitted to violations of the New York Labor Law. According to the Attorney General’s office, the following are some of the violations:

  • Some stores paid delivery workers below the tipped minimum wage applicable to delivery workers under New York law.
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Payroll.Picture.Bought.From.Dollar.Photo.Club.Feb.2015.jpgOur Award Winning New York Employment Lawyer has been asked to discuss amendments to the New York Wage Theft Prevention Act (WTPA) which will go into effect later this week on February 27, 2015. It is important for employees and employers to understand the changes and how they impact their workplaces. In general, the WTPA was created to protect workers and prevent employers from failing to paying wages. The WTPA required employers to provide written notices to each employee every year between January and February and at the time of hire or upon certain changes in an employment role. Under the WTPA, employers could be sued by employees or face enforcement actions by the State Department of Labor. If you have any questions about your obligations as an employer or your rights as an employee, contact our office at (800) 893-9645 for a confidential consultation.

CERTAIN AMENDMENTS TO THE WTPA

IMPACTING EMPLOYEES AND EMPLOYERS

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above-the-bar-logo-no12According to the current provisions under the federal Fair Labor Standards Act (FLSA), a law governing, among other things, wages for workers, in general salaried employees making more than $455 per week are not entitled to overtime pay under the federal law (however there may be exceptions as it can be a fact specific inquiry); whereas salaried employees earning less than $455 per week are entitled to overtime pay. In New York and California, however, state employment laws have set salary thresholds higher. Because the overtime rules can be complex and difficult to navigate, you should call our office at (800) 893-9645 to arrange for a confidential consultation with our Award-Winning Employment Attorneys. Our Lead Employment Attorney can be found here. If you are an employer, we will advise you of your overtime obligations under the existing laws.

I Heard President Obama is Going to Provide Overtime Protection for More Salaried Employees. Is this True?

Yes. Under the existing provisions of the FLSA, certain “executive, administrative and professional” employees are exempt from receiving overtime. Known as the “white collar” exemption, the provision has only been updated twice in the last 40 years. In 1975, the salary threshold exempting salaried workers from overtime was $250. In 2004, the salary threshold was set at $455 per week and hasn’t been adjusted for inflation since then. Under the current salary threshold, it is possible for a salaried employee to make less than the minimum wage. For example, suppose a salaried manager at a fast food restaurant is making $455. If the manager works 65 hours in one week, he or she would be making $7 per hour–less than the minimum wage. Commenting on the existing FLSA salary exemption rules, U.S. Secretary of Labor Tom Perez stated, “The current salary threshold is only $455–below today’s poverty line for a worker of four. So under the current rules, even if you’re poor, you may not qualify for overtime. That doesn’t make sense.”

To change the current situation for salaried employees, Obama signed a Presidential Memorandum on March 13, 2014 requiring the U.S. Department of Labor to use its authority to update the FLSA’s salary threshold to provide millions of salaried workers with overtime protection they currently do not have. The President acknowledged that the salary threshold for overtime protection has failed to keep up with the rate of inflation and needs to be changed. The Memorandum did not state what the new threshold will be.

Should Employers be Concerned about the Proposal to Change Overtime Rules?

Yes. The new changes could affect your salaried employees’ right to receive overtime pay. If you don’t pay them the overtime, you could be subject to penalties, back taxes as well as back wages for the employees. Therefore, in order to help you navigate your way through the newly proposed overtime changes, you need to call our Top Employment Attorneys at (800) 893-9645 to schedule a confidential consultation advising you of your obligations to pay your employees overtime.

How Is Overtime Pay Calculated?

Overtime is calculated at a rate of one and one half the time of an employee’s regular rate of pay for time worked over forty hours in one workweek. For instance, if an employee regularly earns $10 per hour, and if he or she works 45 hours in a week, then he or she is entitled to $75 in overtime pay ($15 x 5 = $75). If an employee performs two different job duties at two different rates of pay while working for the same company, then the rate of pay for that week is calculated by taking the weighted average of such rates. For instance, an employee may make $10 per hour for answering the phones and $12 per hour for working in the warehouse. Suppose this employee, in the course of one work week, works 25 hours answering the phone and 20 hours working in the warehouse. The rate of pay would be calculated as follows: (25 hours x $10 = $250) + (20 hours x $12 = $240) = $490; the total earnings in this case is $490, which, when divided by the total number of hours worked, 45 hours in this case, equals $10.88, which is considered the employee’s rate of pay. This rate of pay would then be used to calculate overtime pay.

It is important to note that overtime is determined by hours worked, not by when you work, such as a Saturday or a holiday. In addition, there is no limit on the amount of overtime workers aged 16 and older can work. Finally, overtime pay may not be waived. Even if an employee signs an agreement stating that he work overtime, he or she is still entitled to overtime compensation for work performed over 40 hours.

Call the law office of Villanueva & Sanchala at (800) 893-9645 if you are an employer or employee and have questions or concerns about overtime pay and requirements.
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Thumbnail image for Thumbnail image for above-the-bar-logo.jpgFAQ: I work as a waiter in a restaurant and am not even making minimum wage after I add up my wages and tips per hour. My employer also frequently asks me to work many extra hours without paying overtime. When I ask him about my overtime wages, he says I’m lucky to have a job. What can I do?

You are not alone in this battle to be paid your rightful wages. This is a nationwide problem affecting workers throughout the restaurant industry. Call our experienced Wage and Hour attorneys to help you recover your rightful wages and overtime pay. Our attorneys have also helped many employees fearful of losing their jobs or of retaliation.

The Fair Labor Standards Act clearly provides that employees receive at least the minimum wage and for all hours worked in excess of 40 hours per week, receive at least one and one half times their regular rate of pay. The federal minimum wage for covered nonexempt employees is $7.25 per hour.

Tipped employees fall under an exception so that your employer may pay you not less than $2.13 an hour in direct wages as long as that amount plus the tips that you receive total at least the federal minimum wage, you retain all your tips and you customarily and regularly receive more than $30 a month in tips. If your tips combined with your employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, then your employer must make up the difference.

Many workers like you are not taking a back seat anymore, but are fighting for their rightful wages. Recently, two employees brought a lawsuit against Darden Restaurants, the company who owns Red Lobster, Olive Garden, Longhorn Steakhouse, and The Capital Grill, alleging that were not paid overtime for hours worked in excess of 40 hours a week, and tipped employees were made to do work which reduced the amount of tips they could earn. The suit alleges that servers, who are often paid less than minimum wage because they get tips, were made to perform a lot of non-tipped work such as rolling napkins and vacuuming.

Darden Restaurants denies that it violated any wage and hour laws and claims that it did not hear of any complaints of alleged violations until the lawsuit was filed. The company claims it has an in-house complaint resolution system and that the employees did not use it. It is a shame that Darden, one of the nation’s largest restaurant operators that owns over 2,000 restaurants across the country, is allegedly violating the wage and hour laws by underpaying its employees.

Our attorneys have helped many workers in the restaurant industry recover their rightful wages, overtime pay as well as any benefits and compensation that was due to them. Call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you recover your hard earned wages that are owed to you.
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Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo.jpgA group of 48 current and former workers are suing Farm Country, their East New York supermarket employer, for not paying them their legal wages for years. The employees have alleged that they were not paid minimum wage or overtime pay and were sometimes making as little a $4.52 an hour for working 12 hour days.

Ruben Guardada of Flatbush has charged that he was never paid overtime in the four years he worked at the supermarket. He stated that he “knew they were taking advantage of us, but I needed the work to support my family.” He has now filed suit because he doesn’t want other employees to be taken advantage of like he was. If your employer is taking advantage of you by not paying you minimum wage or overtime pay, our attorneys can help you recover your rightful wages. Our attorneys have helped many workers recover their rightful wages.

The Fair Labor Standards Act (“FLSA”) and New York State law both require that a minimum wage of $7.25 per hour applies to all non-exempt workers, even if you are an undocumented employee. The FLSA also provides that covered nonexempt employees must receive overtime pay for all hours worked in excess of 40 hours per workweek at a rate of at least 1 ½ times the regular rate of pay. The Act does not require that you be paid overtime if you work on weekends, holidays or your regular days of rest unless you work overtime on such days. For example, if your schedule is to work Monday, Tuesday, Wednesday, and Saturday, you should not be paid overtime unless your total number of hours exceeds 40 hours for the week.

The FSLA requires employers to display an official poster setting forth the Act’s provisions. You can obtain a free poster from the Wage and Hour Division by calling 1-866-4USWage or you can electronically download and print it at http://www.dol.gov/osbp/sbrefa/poster/main.htm. If you are a covered employer, you must keep certain records for every non-exempt employee. The following is a list of basic information that you must maintain:

  • Every worker’s full name, address, and social security number;
  • Date of birth, if younger than 19;
  • Sex and occupation;
  • Time and day of week employee begins workweek;
  • Number of hours worked each day;
  • Basis on which employee’s wages are paid;
  • Regular hourly rate of pay;
  • Total daily or weekly straight time earnings;
  • Total overtime earnings for the workweek;
  • All additions to and deductions from the employee’s wages;
  • Total wages paid for each pay period; and
  • Date of payment and the pay period the payment covers.

If you are an employer, make sure you retain your payroll records for at least three years. Any records that you use to compute wages should be retain for two years. For example, these would include time cards, wage rate tables, work and time schedules, and records of additions to or deductions from wages.

It is a shame when employers don’t pay their employees minimum wage and overtime pay. It not only results in the theft of workers’ wages but also affects the economy and taxes collected by the government. Our attorneys have recovered wages and overtime pay for many employees, including workers employed by restaurants, grocery stores, hotels, as well as many other occupations. If you are not being paid minimum wage or overtime pay, call our Wage & Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you recover your rightful wages.
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above-the-bar-logo.jpgA former intern recently filed a lawsuit against the PBS talk show host of “The Charlie Rose Show” (“the Show”) and its corporate owner for not paying interns any wages and employing them in violation of New York State labor laws. The complaint charges the production company with not providing any academic or vocational training and not paying wages.

Lucy Bickerton, the plaintiff in this action, is a 2008 graduate from Wesleyan University. She has alleged that she regularly worked at least 25 hours every week without any pay while on the Show’s staff in 2007. Her complaint states that “Despite the significant work they perform, Charlie Rose interns are not compensated for any of their work, in violation of New York labor law.” She has also charged the production company with not keeping accurate records of how many hours interns worked. If you think you were performing the work of an employee and were misclassified as an intern, our attorneys can help you recover your rightful compensation.

Bickerton is also seeking class action certification for all the interns who have worked on the show since March 14, 2006. The Show has more than 200 PBS affiliates across the country and regularly used about 10 unpaid interns. As an editorial intern, Bickerton had various responsibilities, which included performing research to prepare Charlie Rose for guest interviews, putting press packets together, escorting the show’s guests through the studio, breaking down the interview set after each day’s filming, and cleaning up the green room.

The New York State Minimum Wage Act, New York State Labor Law section 650-665 (“Act”) applies to all individuals who meet the legal definition of an “employee” under the Act. The Act contains an exception for 15 categories where individuals are excluded from coverage. The Act excludes from coverage any individual who is not in an employment relationship. Regarding interns, the Act looks at the totality of the circumstances, mostly using the 6 criteria set forth by the U.S. Department of Labor as well as 5 additional factors. In order to be exempt from the Act, an internship must satisfy all of the following 11 criteria:

  1. The training, even if it includes actual operation of an employer’s facilities, is similar to training that would be given in an educational environment;
  2. The training is for the benefit of the intern;
  3. The intern does not displace a regular employee and any work he or she does is under close supervision;
  4. The employer providing the training does not obtain any immediate advantage from the intern’s activities and, on occasion, operations may actually be impeded;
  5. The trainee is not necessarily entitled to a job at the conclusion of the training period and is free to take another job elsewhere in the same field;
  6. The intern has been notified, in writing, that he or she will not receive any wages for such training and will not be considered to be an employee for the purposes of minimum wage:
  7. Any clinical training is performed under the supervision and direction of individuals knowledgeable and experienced in the activities being performed;
  8. The intern does not receive any employee benefits;
  9. The training is general so that the intern learns to work in any similar business, rather than specifically designed for a job with the employer offering the program;
  10. The application process for the internship only involves criteria which are relevant for admission to an independent educational program, it is not the same as applying for a paid job;
  11. Advertising for the internship is clearly set forth in terms of education and training, not for employment, although employers may state that qualified graduates may be considered for employment.

Unpaid internships are a valuable educational method when not abused by employers. Problems arise when employers begin using interns to do work that an employee would regularly do. If you feel your internship did not satisfy all the above criteria, call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you figure out if you should have been classified as an employee and entitled to wages and benefits.
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above-the-bar-logo-no12Celebrity chef Mario Batali and his chief business partner Joe Bastianich have reached a $5.25 million settlement with workers who had alleged violations of New York Labor Law and the FLSA. The lawsuit, filed in July 2010, alleged that Batali and his partner had a standard policy of taking 4-5% of the tip pool that was given to servers for alcohol and wine sales.

The lawsuit was initially brought by a waitress who worked at Batali’s restaurant, Babbo, in the Village. The workers’ allegations included charges of unpaid overtime wages, unpaid minimum wages, unpaid spread of hours pay, and unpaid misappropriated tips. Our attorneys have represented and helped many restaurant workers who have not been paid their rightful compensation. If you are a waiter, waitress, bartender or any type of tipped worker and have been denied any of your rightful wages or tips or are a restaurant owner unfairly accused, call our attorneys to help you.

The amended complaint charged that Batali and Bastianich “unlawfully confiscated a portion of their workers’ hard-earned tips in order to supplement their own profit. At the end of every shift, instead of distributing customers’ credit card tips to the workers who earned them as the law requires, Mr. Batali, Mr. Bastianich, and their restaurant took from the tip pool an amount equal to approximately 4-5% of the restaurants’ wine sales (and sometimes other beverage sales) for the night and put it in their own pockets.”

The class action included 117 workers. However, the settlement agreement could cover about 1,100 current and former workers at 8 Italian style New York restaurants. Some of the restaurants named in the lawsuit include Babbo, Del Posto, Casa Mono, Bar Jamon, Esca, Lupa and Otto.

Each plaintiff will receive a part of the settlement monies dependent on how many hours he or she worked at the restaurants. It will be available to the restaurants’ captains, servers, waiters, bussers, runners, back waiters, bartenders, and/or barbacks who worked there from July 22, 2004 to February 14, 2012 and who do not opt out of the settlement.

If you are a tipped employee such as a waiter, waitress, waiter, bartender, or valet, your combined cash and tip minimum wage rate must total $7.25 per hour. If you do not earn at least $7.25 including tips in any given hour of work, your employer must make up this difference. New York law also provides that if you are a restaurant worker whose workday is longer than ten hours, you must receive an extra hour of pay at the basic minimum hourly rate of $7.25 in addition to the pay for the actual hours you worked. If you are a tipped employee working at a restaurant, your employer cannot make you share your tips with non-service employees who do not in the ordinary course of business regularly receive tips. These are just a few things to keep in mind if you are working in the food service industry. If you think your employer is not accurately paying you your required wages, forcing you to share your tips in violation of New York Labor law or the FLSA, or taking a part of your gratuities, call our Wage & Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to discuss how we can help you protect your rights to your compensation.
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above-the-bar-logo-no12Pharmaceutical giant Novo Nordisk, Inc. (“Novo”) was hit this week with a $70 million class and collective action lawsuit alleging misclassification of its sale representatives as exempt employees. Two plaintiffs and a class of sales representatives, who are current and former employees of the Danish manufacturer, are seeking overtime pay and have charged Novo with not paying its sales employees overtime wages in compliance with New York and federal law. The action was filed in the U.S. District Court for the Southern District of New York.

The two pharmaceutical sales reps, McKenzie Stepe of New Jersey and Karen Woolen of Texas, have alleged that the company required them to work over 40 hours a week but did not pay them overtime wages in violation of the FLSA and New York Labor law. If you have been denied your rightful wages or overtime pay, call our attorneys to help you determine if you have an action under the FLSA or state law. Our attorneys have helped many employees recover their rightful compensation.

The lawsuit charges Novo with misclassifying its sales representatives as exempt salaried workers. The class of workers allege that they are non-exempt and should have been paid for overtime. Two classes of employees are defined in the complaint depending on where they worked. The FLSA class is made up of all sales employees who worked in any state or U.S. territory from March 2009 until the present while the New York State class includes all sales representatives employed at Novo in New York for at least one day from March 2006 to the present who do not opt out.

The FLSA requires that covered, non-exempt employees be paid at least minimum wage and overtime at a rate of at least one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in a workweek. The FLSA provides an exemption from both minimum wage and overtime pay for employees who are employed as bona fide executive, administrative, professional and outside sales representatives. In order to qualify for an exemption, an employee must meet certain requirements regarding their job duties and be paid a salary of at least $455 per week.

In order to qualify for an outside sales exemption, the employee’s primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a client or customer will pay consideration, and the employee must be customarily and regularly engaged away from the employer’s place of business. A job title alone does not make an employee exempt. For example, giving an employee the title of a sales representative whose only job duty is to answer phone calls and greet clients does not qualify for an exemption.

Many large drug companies have been and many are being sued by their sales employees for overtime pay. Because the Circuit Courts have been coming up with different interpretations of the FLSA regarding this classification, the U.S. Supreme Court will be hearing arguments in April, 2012 on this issue in another case, Christopher v. SmithKline Beecham Corp. In SmithKline Beecham, the Ninth Circuit held that a pharmaceutical sales representative was an outside salesman and therefore exempt from overtime. Our attorneys will keep you informed on how the Supreme Court rules on this issue.

Misclassification of workers is a serious national problem that not only affects an employee from earning his rightful wages but also impacts every taxpayer. Our attorneys have helped many misclassified employees recover their rightful wages. Call our Wage & Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to discuss if you have an action for unpaid wages or overtime pay.
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Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo.jpgPharmaceutical 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.
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