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Information for workers owed unpaid wages.

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Off the Clock Work

Dec 15 2017

Call Center Hit With $1.75 Million Lawsuit for Rest Break Violations

American Future Systems, doing business as Progressive Business Publications, was recently ordered to pay $1.75 million dollars to a class of call center workers for unpaid bathroom breaks and other short rest breaks. This amount includes wages owed for time spent on these short breaks plus liquidated (double) damages in an equal amount.

Jim Cain, District Director for the Department of Labor Wage and Hour Division, commented on the ruling and stated: “The judge’s decision reaffirms how clear the Fair Labor Standards Act is about short breaks being compensable, and goes a long way in making these employees whole by awarding liquidated damages.”

Paying for Bathroom Breaks

American Future Systems employs more than 6,000 employees who work in 14 call centers throughout Pennsylvania, New Jersey and Ohio. Many of the company’s employees work as telemarketers who offer free subscriptions to the company’s 20 newsletters. Subscribers are billed after the first few issues unless they cancel their subscriptions.

Cain went on to say that “[f]or far too long, American Future Systems penalized its employees for taking breaks to meet the most basic needs during the work day – stretching their legs, getting a glass of water or just using the restroom.”

What is Compensable?

Federal law does not require lunch or coffee breaks. However, when employers do offer short breaks (usually lasting about 5 to 20 minutes), federal law considers the breaks as compensable work hours that would be included in the sum of hours worked during the work week and considered in determining if overtime was worked. Unauthorized extensions of authorized work breaks need not be counted as hours worked when the employer has expressly and unambiguously communicated to the employee that the authorized break may only last for a specific length of time, that any extension of the break is contrary to the employer’s rules, and that any extension of the break will be punished.

Bona fide meal periods (typically lasting at least 30 minutes), serve a different purpose than coffee or snack breaks and, thus, are not work time and are not compensable.

The American Future Systems decision is yet another example of how an employer can run afoul of state and federal wage and hour laws.  In particular, with call centers, the employer often runs afoul of the law by not counting time spent booting up and shutting down computers at the start and end of each day. This, like meal breaks, is also compensable time for which an employee must be paid. Furthermore, the time spent performing these tasks must be included in their overtime hour calculations.

 

Image link: https://pixabay.com/en/call-center-headset-woman-service-2944063/

Written by Wage Authority Group · Categorized: Off the Clock Work

Nov 25 2017

Class Decertified in FLSA Case Against NYC Department of Homeless Services

Five current and former administrative assistants recently brought wage and hour claims under the Fair Labor Standards Act (FLSA) against the New York City Department of Homeless Services. The plaintiffs brought the case as a collective action under the FLSA and sought to include all similarly situated individuals in the case. The class was conditionally certified, only to later be decertified by the Federal District Judge in the Southern District of New York, who was not satisfied that the class was similarly situated where they worked in different units and reported to different departments. Additionally, the Judge held that the plaintiffs’ own testimony illustrated “critical differences in what supervisors told their employees about overtime.” The plaintiffs alleged that they were forced by the City to work off-the-clock; and when the off-the-clock work was included in their workweek, their hours worked exceeded 40 and they should have been paid overtime.

Decertifcation Process

Following discovery and motion practice, the court granted the City’s motion for decertification of the FLSA collective, determining that the plaintiffs were not similarly situated under the stage two inquiry, after discovery was complete. Generally, Courts in the 2nd Circuit follow a two-step process to certifying FLSA collective actions. The first step occurs before discovery has been done, and a lenient standard is applied.  However, the stage two inquiry is made on a motion for decertification after discovery has been completed and entails a heightened burden of proof for the plaintiffs to show they are similarly situated.

At this point, the case will proceed on an individual basis. The Court made no ruling on whether the class had valid FLSA claims, only that the plaintiffs were not similarly situated to the class they sought to represent.

The case is Lynch v City of New York and it is pending in the United States District Court for the Southern District of New York.

 

Image link: https://pixabay.com/en/homeless-man-homeless-advice-833017/

Written by Wage Authority Group · Categorized: Off the Clock Work

Oct 10 2017

Is It Doomsday for FLSA Claims?

The Fair Labor Standards Act (FLSA) has provisions that ostensibly allow employers the ability to select various alternate methods of payment while remaining compliant with current FLSA law. The devil is in the details, and the CFR (Code of Federal Regulations) must be filed to be compliant.

One method included is the “fluctuating workweek method”, which is payment of a base weekly salary to an employee, regardless of hours worked, but with an overtime rate that fluctuates based on the hours worked. The key idea to successful integration of the fluctuating work week method is establishing a clear and mutual understanding of how employees will be paid. In a recent opinion in the 11th Circuit Court of Appeals, a case regarding Georgia employers and employees, the testimony provided by the employer in a deposition proved that required clarity of understanding prevailed in this case and that the employer was not liable for overtime FLSA violations.

The employee accepted the employment offer from Yachting Promotions, Inc. Yachting Promotions is a company that hosts boat displays, shows, and special events and promotions. Garcia, the plaintiff, lodged allegations that he worked in excess of forty hours per week in each week that Yachting Promotions employed him, but he was never compensated for the extra hours that he worked, resulting in Garcia lodging a FLSA lawsuit against the employer for overtime wages owed. The employer contested in Garcia v. Yachting Promotions, stating that Garcia was not entitled to overtime wages, as he had originally signed a document specifying that the wage payment method would fall under the fluctuating workweek method.

Under the fluctuating workweek method, an employee enters an agreement to receive a fixed salary each week regardless of how many hours work is actually performed. To enable use of this method, an employer must ensure that the employee fully comprehends that his payment method is a fixed salary for all hours worked during the work week each week. In Garcia’s job, the employment agreement was signed by Garcia stating he understood that his pay would be capped at $779 per week on salary arrangement and that his pay aligned and was in accordance with the fluctuating workweek method.

Garcia provided arguments stating he should be permitted to pursue FLSA proceedings, as he failed to comprehend what he had signed. The document was in English, and Garcia’s native language is Spanish. Garcia claimed that all that was conveyed in signing of the document was the message that he was required to sign the document or risk losing the employment position. Although the law clearly states “clear mutual understanding of both parties” that the wages would be provided under the fluctuating workweek method, the trial court awarded a summary judgement in favor of the employer. The 11th Circuit Court also upheld the court’s ruling.

Garcia testified in his deposition that he understood that he was an employee receiving salary payments at a base rate of $779 per week regardless of the number of hours worked. That testimony alone was enough to satisfy the court’s requirement for mutual understanding in accordance with the law, and as a result, issued a ruling in favour of the employer.

Still, the fluctuating work week is very nuanced, and there are subtle differences in policy that would affirm this type of structure or make it run afoul of wage and hour laws. A seasoned overtime attorney should always examine the pay and policy to determine if there is an overtime violation.

Written by Wage Authority Group · Categorized: Off the Clock Work

Aug 12 2017

Price Chopper Managers Settle for 6.5 Million In Overtime Suit

Suit: Davine Vs The Golub Club.et al

Case Number: 3:14-cv-30136 in U.S. District Court for District of Massachusetts.

A class action from department managers working for Price Chopper Inc has been able to reach a $6.5 million settlement in compensation for unpaid overtime wages. According to a settlement proposal filed in Massachusetts federal court, the Price Chopper Inc supermarket chain failed to correctly pay managers for overtime wages in an attempt to deliberately reduce labor costs.

Violation of the Fair Labor Standards Act

The managers pursued the case as a violation of the Fair Labor Standards Act (FLSA) and various state wage and hour laws, and are eligible to receive an average amount of $2,200 if members of the Rule 23 class action, or $4,700 when filing as opt in plaintiffs in the FLSA as well.

Misclasssification of Workers

A total of 317 managers joined forces to file a consent to participate in the litigation proceedings, who previously were classified exempt from overtime wages by Price Chopper during the timeframe of July 2011 through to December 2016. The managers consist of both current and former managers that have been employed in New York, Connecticut, Massachusetts and Pennsylvania branches.  This case is commonly referred to as a misclassification case under the FLSA, where workers are paid a salary, but based on their actual job duties or other factors should have been properly labelled as non-exempt and paid overtime for hours over 40.

The managers issued a statement in a supporting memo of the proposed settlement stating that the defendants would likely have argued that differences amongst store location, store size and the eight departments in questions resulted in individualized issues, and potentially justified decertification of the collective.  The settlement although not recouping full damages, was fair considering the risks of decertification.  FLSA actions call for double damages plus attorney fees and various state statutes such as Massachusetts, can call for up to triple damages.,

The FLSA overtime class action lawsuit against Price Chopper Inc alleged that departmental managers and team leaders have been expected to work additional overtime hours alongside eligible overtime employees, completing the same hours of work and quality of work yet failing to be paid overtime wages accrued while working in excess of a forty hour work week.

Compensation Awarded

Opt in Plaintiffs are eligible for a stake in a $1.5 million compensation pot, while attorney fees make up a third of the settlement funds and the remaining funds being dispersed amongst the Putative Class.

Recovery funds constitute forty-two percent of Putative Class members unpaid overtime at a half time rate if prevailing on merits and class certification, and Opt in Plaintiffs recovery rates are eighty percent of half time rate if succeeding with merits while avoiding decertification.

Failure to Pay Overtime

Shelly J. Davine, the lead plaintiff, claims she constantly worked in excess of a forty-five hour work week while failing to be paid overtime wages during 1983 – 2014. She alleged that both Price Chopper Inc and The Golub Corp who operate and own 135 nationwide grocery stores have a company policy of withholding overtime wages from eligible staff members including managerial staff.

It was also alleged that management employees and staff in leadership roles should not have been exempted from overtime wages as their workplace duties were duplicate in nature to workers who received overtime wages that didn’t hold the authority of hiring and firing over other staff members.

The lead plaintiff also stated that Price Chopper failed to efficiently record any hours undertaken by management employees, including excess hours worked before and after any scheduled shifts.

The FLSA claim was filed on behalf of multiple managerial workers and leaders who operated shifts in several sections of the supermarket chain including deli, seafood, grocery, front end and produce department and bakery staff that failed to receive overtime pay while working in excess of a forty hour workweek.

Separate claims have additionally been raised on behalf of the putative class for violations of the Massachusetts Wage Act and common law.

Written by Wage Authority Group · Categorized: Off the Clock Work, Worker Misclassification

Jun 22 2017

Companies with In-House Call Centers May Perpetuate Wage and Overtime Abuse

For many years, even decades, large companies have tried to cut costs by taking once internal functions and paying other companies to handle those operations instead. Using business process outsourcers and outside call centers, for example, became very common. Today, however, the trend is reversing.

Call Center “Insourcing”

Driven by customer complaints of poor service, many of the same companies who outsourced their call centers have responded by bringing them back in-house. For some, this “insourcing” is a way to demonstrate that they value their customer relationships enough to ensure good, consistent service.

Zappos and 1-800-GOT-JUNK are both famous for this and use it as a way to differentiate themselves from competitors. Hotel chains like Hilton, some airlines, and even Xerox have all made the move back to in-house call centers.

Even though those jobs are now handled by a company’s own personnel, however, does not mean that the wage and overtime abuse that plagues the outsourced call center industry has gone away. In many cases it has just continued, now taking place under the employer’s own roof.

Call Center Wage Theft & Wage Abuse

Just like any other employee in a company, call center workers are protected by the federal Fair Labor Standards Act (FLSA). Under the FLSA, they must be paid at least minimum wage as well as overtime if they work more than 40 hours a week. This is the case whether they work in an office or from home.

Too often, the wage and overtime theft that prompted the U.S. Department of Labor to issue a warning about the call center industry continues when that work is brought in-house. Most often it involves not paying workers for time spent on essential tasks performed before, after, and even during their shifts, including:

  • Booting up computers, logging into networks and launching applications before starting work
  • Closing out applications, logging off networks and shutting down computers after clocking out
  • Downloading and reading company directives and other work-related information
  • Reading email before and after work
  • Not counting time spent dealing with technical support, when systems go down or computers are disconnected from the network, towards hours worked

Unpaid Overtime

For many call center workers, these tasks can add up — sometimes 30 minutes or more per shift. Since many workers spend more than 40 hours a week at their jobs, this could also mean they are owed not only regular wages but also overtime at time-and-a-half.

Call center work is demanding and employees often put in long hours. Whether they work for an outsourced provider or in-house for a company, agents deserve to be paid everything they are owed.

Written by Wage Authority Group · Categorized: Call Center, Minimum Wage, Off the Clock Work, Unpaid Overtime Pay

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