Articles Posted in Overtime Pay and Unpaid Wages

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Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo.jpgNew 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.
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above-the-bar-logo-no12.jpgThe U.S. Department of Labor’s Wage and Hour Division’s (“DOL”) ongoing initiative has thus far recovered $2.3 million in back wages for 578 workers employed at pizza and pasta restaurants in Long Island. The restaurant owners were also fined civil penalties amounting to $202,315 for willful and repeat violations.

The investigation found 35 Italian restaurants in violation of the Fair Labor Standards Act. The illegal acts included paying cash wages “off the books” when the employers should have been maintaining the required employment records, paying a fixed salary for all the hours that an employee worked rather than paying minimum wage and applying overtime, and for falsifying time and payroll records.

The Long Island district office used different strategies to track down noncompliance with the wage and hour laws. Investigators visited restaurants to figure out minimum wage patterns, overtime and record keeping violations, and reminded workers of their FLSA rights. They also reviewed payroll records, interviewed employees to assess employer compliance with wage laws, as well as used surveillance to detect violations. Irv Milijoner, director of the DOL’s Long Island district office stated “It’s becoming increasingly common for us not only finding minimum wage violations and overtime violations but a preponderance of employees being paid off the books.”

The DOL’s district office is taking a tough stand against noncompliance and aggressively going after employers breaking the law. It is using all available enforcement tools including litigation, administrative subpoenas, and civil monetary penalty assessments and liquidated damages. In fact, the division has engaged in litigation against 26 local restaurants from which it recovered over $1,914,000 in back wages and liquidated damages for over 300 employees. It also assessed the restaurant owners $127,000 in penalties for their willful and/or repeat violations.

Milijoner also stated that the national estimate of the amount of money employers avoid in paying some taxes is about $800 billion. HIs office is now planning to go after the 100 or so diners in Nassau and Suffolk counties for wage and hour violations.

The FLSA requires an employer to pay an employee at least the federal minimum wage of $7.25 an hour and overtime of time and a half for hours worked in excess of 40 per week. It also requires an employer to maintain accurate records of all employees and their wages, hours, and identifying information. Payroll records must be kept for at least three years while records on which wages are determined should be maintained for two years. For example, you should keep an employees time cards, wage rage tables, work and time schedules for at least 2 years.

The DOL is determined to find any restaurant industry employers who violating wage and hour laws. It has also made it know that it intends to go after diners next. If you have a restaurant or a diner, make sure your personnel records and payroll records are in compliance with the FLSA. Our Wage & Hour Attorneys at Villanueva & Sanchala can help you make sure you are in compliance with state and federal labor laws. Call us at (800) 893-9645 to help you avoid costly litigation or fines and penalties.
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above-the-bar-logo-no12Oracle Corp. recently entered into a settlement to pay $35 million to end a class action lawsuit that charged it with violating wage and hour laws. The suit was filed in 2007 and alleged that Oracle misclassified the workers as exempt workers to avoid paying overtime and meal breaks.

The $35 million settlement will be shared by 1,725 employees who will each get on average a little over $13,000. Our attorneys have helped many misclassified workers recover their rightful wages. If you think you are being misclassified as an exempt employee or an independent contractor, call our attorneys to help you evaluate your claims.

The three groups of workers involved in the class action were quality assurance workers, who test Oracle software, technical analysts, who provide customer support and answer questions, and project managers, who coordinate tasks for other employees. Oracle argued that these employees were either administrators or computer professionals and thus were exempt from state overtime laws and not subject to time and a half pay for hours worked in excess of 40 hours a week. The workers argued that each group worked long hours with repetitive tasks at modest salaries.

The FLSA provides that employees be paid both minimum wage and overtime pay at time and a half for hours worked in excess of 40 hours a week. In order to meet the exemption requirements, employees must meet certain tests pertaining to their job duties and be paid a salary of at least $455 per week. An employee’s job title alone does not qualify him or her for an exemption. For example, an employee may have title “executive vice-president” but if his or her sole job function is to make photocopies, the employee does not qualify for an exemption. Federal law provides an exception only for employees who are executives, administrative, computer, professional and outside sales representatives.

In order to be exempt as a computer employee, one must meet the following criteria:

  • be compensated either at a rate of at least $455 per week or, if compensated on an hourly basis, then at a rate not less than $27.63 per hour;
  • the employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties set forth below;
  • his or her primary duties must include the following:

1) application of systems analysis techniques and procedures, including consulting with others, to figure out hardware, software or system functional specifications;

2) the design development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

3) the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

4) a combination of the aforementioned duties, the performance of which requires the same level of skills.

Misclassification of employees is a common problem that affects not just the underpaid employees but also taxpayers and the economy. When employees are not compensated their correct wages, this in turn affects their spending and the amount of taxes they pay which in turn affects the entire economy. If you are not properly classifying your workers and are audited by the IRS or the Department of Labor, the penalties, interest, and back taxes can be devastating to your business. Call our Misclassification Attorneys at Villanueva & Sanchala at (800) 893-9645 to ensure that your company is in compliance with all state and federal laws.
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top.lawyers.arrive.mag.2011.jpgU.S. broker dealer MF Global recently fired over 1,000 employees after its parent company MF Global Holdings Ltd. Declared bankruptcy on October 31st under Chapter 11 of the U.S. Bankruptcy Code. Employees in the New York and Chicago offices may have strong claims under the WARN Act (Worker Adjustment and Retraining Notification) since MF Global has not filed notice of the layoff with state agencies nor given employees the required notice.

Since MF Global is not eligible to be reorganized, the bankruptcy trustee is liquidating the company. The employees who were fired were helping in the investigation of missing customer funds which is estimated to be about $600 million. The Department of Justice and the Commodity Futures Trading Commission are investigating the missing money. The bankruptcy trustee decided which employees to terminate without consulting MF Global’s parent company.

According to the trustee’s office, none of the terminated employees will receive severance pay, deferred compensation, or bonuses. They will receive health coverage through the end of November and salaries through November 15th.

The terminated employees can file claims against MF Global’s assets for severance, unused vacation days, benefits, and any other money owed to them. However, they will only get paid a portion after customers are paid and administrative fees are paid off.

Under the WARN Act, large companies must provide 90 days notice when closing down or ordering massive layoffs. The purpose of the Act is to give employees time to look for another job and plan for health insurance before their employment ends. Under New York state law, the Act applies to all private businesses with 50 or more full time workers and covers the following situations:

– closings which affect 25 or more workers – mass layoffs involving 25 or more full time workers, if the 25 or more workers make up at 33% of all workers at the site – mass layoffs involving 250 or more full time workers – other relocations and covered reductions in work force.

The Act provides that prior to a plant closing, mass layoff, relocation, or other covered reduction in work hours, covered businesses must provide all employees with 90 days notice before terminating their employment. If a business fails to provide a WARN notice, it may be required to pay back wages and benefits as well as a civil penalty.

If MF Global did not give the employees adequate notice and has not filed WARN notices with the state agencies, the employees may be able to take legal action. The employees can sue for eight weeks of pay and benefits. Since they were terminated after MF Global filed for bankruptcy, their WARN claims would be grouped with the administrative expenses which means that they would get paid as the same time as the attorneys handling the bankruptcy. In other words, their claims stand a much better chance of getting paid compared to other non-administrative claims.

Not complying with the notice requirement of the WARN Act can lead to hefty fines as well as payment of back wages and benefits. If your business is considering laying off a substantial number employees, call our WARN Attorneys at Villanueva & Sanchala at (800) 893-9645 to ensure that your company is in compliance with all state and federal laws. Our attorneys have helped many companies strategize and file the proper notices to ensure legal compliance.
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FAQ: I own a small business and recently discovered that I had misclassified some of my workers and was not paying them accurate minimum wages and overtime pay. Can I be held personally liable to these employees for their unpaid compensation?

above-the-bar-logo-no12You ask an excellent question that our Wage and Hour Attorneys are often asked by the heads of many of our family owned businesses as well as small to large sized companies. The Judge in the New York Southern District Court recently ruled in Torres et al. v. Gristedes Operating Corp., et al., that Mr. Catsimatidis, the president and CEO, of a grocery chain was personally and individually liable to his employees for unpaid wages. Depending on your factual circumstances, you are at risk of being personally liable for your employees’ unpaid compensation. Our Wage and Hour Attorneys have helped many companies properly classify their employees to avoid any potential personal liability.

The class action lawsuit alleged that Mr. Catsimatidis, Gristede’s owner, misclassified hundreds of hourly workers as managers to avoid paying them overtime. The lawsuit originally began in 2004 and was settled in June of 2009 resulting in a $3.5 million settlement structured with a lump sum payment of $425,000 followed by installments. The settlement plan fell apart when Gristede’s ran into financial trouble and missed its scheduled payments. Thereafter, the workers filed a motion for summary judgment seeking Mr. Catsimatidis personally liable for the payments.

Judge Paul A. Crotty found that under the Fair Labor Standards Act (“FLSA”), the owner, Mr. Catsimatidis was an employer under the law and thus jointly and severally liable for the millions due in overtime pay to the grocery workers.

In reaching its conclusion, the Court found that there was “no aspect of Gristede’s operations from top to bottom and side to side which is beyond Mr. Catsimatidis’ reach. There is no area of Gristede’s which is not subject to his control, whether he chooses to exercise it.” Mr. Catsimatidis’ own affidavit showed that he was the sole owner, president and CEO of Gristede’s and its parent company, which he owned for 20 years, and that he had the right to open, close and reopen stores. He also had the authority to set prices, pick out décor for the stores, and control the store’s signs and advertising.

Although Mr. Catsimatidis argued that he should not be held liable merely because of his title, the Court found that he hired management, reviewed financial documents, worked in the corporate office, dealt with the company’s day to day operations. The Court pointed out that even though he may have delegated certain power to others, Mr. Catsimatidis had the power to delegate. Thus, given all the circumstances and Mr. Catsimatidis’ ownership and authority, he was an employer under the FSLA.

Torres v. Gristedes teaches an expensive lesson to all business owners, officers, directors, and executives who are under the illusion that they cannot be personally liable for their employees’ unpaid compensation. If you have sufficient control and authority of your business, you are at risk for potential personal liability if your company is not financially strong enough to protect you. It is crucial that you classify your workers and pay them in accordance with state and federal law. Call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help ensure that you are compliant with wage and hour laws to avoid any future potential personal liability.
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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgTwo interns who worked on the set of “Black Swan” have filed a lawsuit in federal court alleging that Fox Searchlight Pictures (“Fox”) violated the federal Fair Labor Standards Act and the New York Labor Laws. The lawsuit alleges that Fox, who produced Black Swan, made the interns do menial work without providing them with educational work experience. Fox classified the interns as exempt from pay and made them do menial work which otherwise should have been done by paid employees. Our firm has worked with many companies and employees to ensure that a proper classification of employee vs. intern under the NYS Department of Labor’s guidelines was made. Whether you are an intern or a company we can help determine the correct worker classification.

Fox has over a 100 unpaid interns who play a very important role in its productions performing as assistants and bookkeepers as well as doing secretarial and janitorial work. By misclassifying the workers as interns rather than employees, Fox can get away with not paying them minimum wage, overtime pay as well as other legal protections given to employees.

The lawsuit is trying to obtain class action status for over a 100 unpaid interns that worked on different Fox productions. The lawsuit not only seeks back pay pursuant to state and federal laws but also an injunction to stop Fox from using interns illegally.

The U.S. Department of Labor (“DOL”) has established guidelines in determining whether an internship must be paid minimum wage and overtime. In deciding whether an internship should be paid or not, the following six criteria found on the DOL”s Fact Sheet #71 should be applied:

1) The internship is similar to training which would be given in an educational environment even if it includes actual operation of the employer’s facilities;

2) The internship experience is for the intern’s benefit;

3) The intern does not displace regular employees, but works under the close supervision of existing staff;

4) The employer providing the training does not derive immediate advantage from the intern’s activities; and on occasion its operations may actually be impeded;

5) The intern is not necessarily entitled to a job at the end of the internship; and
6) The employer and the intern understand the intern is not entitled to wages for tiem spent in the internship.

One of the interns, plaintiff Alex Footman, who worked as a production intern from October 2009 to February 2010, did no work related to production or film studies. He worked 5 days a week for at least 40 hours. His job was to make coffee for the production office, make sure the coffee pot was full, take lunch orders, take out the trash, and clean the office. Clearly, Footman, Wesleyan graduate who majored in film studies did not sign up to be a coffee intern.

The other intern, Eric Glatt, who has an M.B.A. was an accounting intern for “Black Swan” who took the internship because he wanted to go into the film industry. As an intern, he prepared documents for purchase orders and petty cash and created spreadsheets to track missing information.

Given the high rate of unemployment and the economic climate, unpaid internships have risen in the past few years. In his book, Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy, Ross Perlin estimates that about 500,000 unpaid interns provide $2 billion in free labor every year and that many work in violation of state and federal labor laws.

Many young graduates, who can’t find a job, take internships just to get their foot in the door. Secretary of Labor Hilda Solis has stated that “good internships – paid or unpaid – are a valuable bridge between higher learning and the workplace. And enforcement is tough because no one has an incentive to report the problem.” In this instance, Black Swan cost $13 million to produce and grossed over $300 million worldwide. Clearly, Fox made out by keeping it costs low. However, it is a grave injustice that not only did Fox use the interns for menial work without paying them but these interns wasted their time and did not benefit with training they thought they had signed up for.

If you are being misclassified as an intern, call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you obtain your rightful wages and overtime pay.
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above-the-bar-logo-no12.jpgThe U.S. Department of Labor (“DOL”) signed a memorandum of understanding this week with the Internal Revenue Service (“IRS”) in an effort to end misclassification of employees. Leaders from 7 states also signed memorandums of understanding with the DOL’s Wage and Hour Division. The states who will be working with the DOL include Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington. Four other states, including New York, Hawaii, Illinois and Montana are also expected to sign memorandums of understanding. Our firm has helped many companies evaluate and correctly classify their workers in accordance with state and federal guidelines to avoid fines, penalties and taxes.

The memorandums of understanding will allow the Labor Department to share information and coordinate law enforcement with the IRS and the 11 states to ensure that employers follow state and federal labor laws. By working together, the Labor Department will be able to target companies that misclassify employees as independent contractors in order to avoid paying minimum wage and overtime pay. Businesses also misclassify employees in order to avoid paying workers compensation, unemployment insurance and federal taxes.

With the DOL, the IRS and the states sharing information, the state and federal government will be able to inflict multiple fines and penalties on companies engaged in violating state and federal employment laws. Patricia Smith, an attorney at the DOL, stated that there’s “more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased.” For example, in the past, if a company was found guilty of not making unemployment insurance payments, it would incur a fine from just the state agency. Now, it would be hit with not just state fines, but also federal fines and penalties as well as any tax violations.

Aggressive enforcement and cracking down on labor law violations has been a major priority for Labor Secretary Hilda Solis since she took over the Labor Department in 2009. The DOL collected about $4 million in back wages in 2010 on behalf of about 6,500 misclassified employees. This amount was a 400 percent increase from the amount collected in 2008. Solis has also made it a point to go after the industries who are known for misclassification of employees, such as the restaurant, hotel, health care, and day care industries.

Misclassification of workers is a huge problem in many industries, which not only robs workers of their rightful wages but amounts to theft from the government and all taxpayers across the country. A 2009 report from the Government Accountability Office showed that misclassification of workers cost the government $2.72 billion in 2006. The report also found that about 30% of employers misclassify their employees as independent contractors to avoid paying overtime and minimum wage.

If your company employs independent contractors, make sure you are in compliance with state and federal labor and employment laws. The government’s new initiative can have severe financial consequences if you are found to be in violation of any labor laws.
Call our Labor and Employment Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you evaluate your company to ensure that your employees are classified correctly.
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above-the-bar-logo-no12.jpgThe hospitality industry, including hotels, motels and resorts, has been violating workers’ wage and hour laws for many years. It’s an industry that employs many non-English speaking and undocumented workers who, unfortunately, are scared to ask for their rightful wages. When employees in an industry, whether they are documented or not, are not being paid their rightful wages, it not only affects their cost of living, but it also results in lost tax revenue to the entire country. This in turn, impacts the entire economy.

Virginia’s Enforcement Initiative

The U.S. Department of Labor Wage and Hour Division (“DOL”) of the Virginia, Norfolk office, recently announced an enforcement initiative against local hotels. Over the past 3 years, the Labor Department found that 60% of the hotels that were investigated had violations. The government audits revealed that employers were taking advantage of workers, especially undocumented workers. Patricia A.J. Pickett, Assistant Director of the DOL in Norfolk, stated that employers tried intimidating undocumented workers by telling them “You’re not going to say anything. You’re not supposed to be here.”

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above-the-bar-logo-no12The U.S. Department of Labor recently brought an action against a group of 3 restaurants in Westchester and Rockland County, New York, for violating the Fair Labor Standards Act. An investigation revealed that the restaurants failed to pay minimum wage and overtime pay, did not keep proper recordkeeping requirements and discriminated against employees who tried to exercise their legal rights.

The lawsuit names as defendants Tomnick Food Services Inc., which does business as New City “American Beauty” Diner in New City, Rockland County, Tomnick Food Services South which operates as New City “American Dream” Diner in Orangeburg, Rockland County, and Tomnick Food Services North, Inc., as New City “American Classic” Diner in Yorktown Heights, Westchester. The suit also names Tom Nikitas Voutsas, the owner and president of the 3 companies, and James Vinieris and Artemesia Vinieris, managers of the companies.

Sonia Rybak, assistant district director of the Wage and Hour Division’s White Plains Area Office stated that “cooks, kitchen staff, busboys and wait staff in these restaurants provided their employer with honest labor and should have received at least the federal minimum wage and overtime pay.” The lawsuit seeks to prohibit future FLSA violations, payment of minimum wages and back pay to March 2008, and compensation equal to liquidated damages or prejudgment interest.

Published on: Yes. Contrary to what many unethical employers believe, undocumented workers are protected by the Fair Labor Standards Act (FLSA) and entitled to back wages and earned overtime pay. As a result, if you worked for an employer who paid you less than minimum wage, or was not paid overtime for hours worked, you may be entitled to back pay. Your employer cannot refuse to pay you because of your immigration status or raise that as a defense in your claim. If employers did not have to pay undocumented workers, undocumented workers would be subject to even more abuses in the workplace. It is important to recognize that undocumented workers have the right to be paid the legal minimum wage and overtime rates. In New York State, the current minimum wage is $7.25 per hour and eligible workers are entitled overtime pay (1.5 times your hourly rate) for all hours worked over 40 hours in a work week.

Do not let your employer bully you. It is illegal for an employer to retaliate against you for bringing a claim under the federal and state labor and anti-discrimination laws. Do not let your employer take advantage of you and not pay you for your hard earned wages. You are not alone — call now to speak with our Experienced Overtime Pay Lawyers who can help fight for you at (800) 893-9645.


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