In September 2016, a lawsuit was filed against Loomis Armored, LLC for unpaid overtime wages. The lawsuit was filed on behalf of employees who worked for Loomis as drivers, messengers, or a guards. The Plaintiff alleged that Loomis unlawfully relied on the Motor Carrier Exemption to deny paying overtime benefits in violation of the Fair Labor Standards Act. In support of the case, Plaintiff attached paystubs that illustrated he often worked well in excess of 40 hours per week without any overtime pay. The lawsuit is currently pending in the United States District Court for the Southern District of New York.
Eastern District of Michigan Judge Approves $6.5 Million Settlement for Exotic Dancers
On June 20, 2017, in a twenty-five page opinion, a Judge in the Eastern District of Michigan approved a $6.5 million dollar settlement for exotic dancers that performed at the nationwide chain Déjà vu. At issue in the case, was whether exotic dancers are properly classified as independent contractors or if they are employees of the night clubs. The Fair Labor Standards Act (FLSA) requires that employers pay each employee minimum wage, something that Déjà Vu did not do because they classified the dancers as independent contractors. Read the full opinion here.
Settlement with Déjà Vu
The settlement agreement reached will require that Déjà Vu provide dancers with an “Entertainment Assessment Form” in order to ensure the dancer is properly classified as an employee or independent contractor based upon the factors of the economic realities test. The injunctive relief also requires Déjà Vu to offer each class member the opportunity to cancel their current independent contractor status and accept a position as an employee. On the other hand, if a dancer wishes to retain their status as an independent contractor they may do so, and Defendants must provide those dancers with the benefits an independent contractor generally recognizes, such as no imposed work schedule. The independent contractors must also be given the opportunity to vote on some club policies.
In addition to the substantial injunctive relief provided under the terms of the settlement, each class member that opts into the settlement will have the option of receiving a cash payment or credits towards rent or dance-fee payments charged by Déjà Vu.
The Court concluded that “the settlement embodies ‘a fair and reasonable [resolution] of a bona fide dispute over FLSA provisions.”
Restaurants in a Budget Crunch May be Tempted to Cheat Workers
It’s no secret that most restaurants operate on razor-thin profit margins. To be successful, restaurant owners and operators must budget carefully and plan for every expense. That is their responsibility.
Unfortunately, some establishments do not take budgeting seriously – and try to make up shortfalls on the backs of restaurant workers. Some may not budget for the actual cost of paying employees their proper wages and overtime, which can lead to wage theft.
Restaurant owners caught in a budget crunch, for example, might be tempted to misclassify workers as being exempt from overtime. They will call a server or host an assistant manager, or give a cook the title sous chef, and say they are now exempt. If that employee’s duties are still those of an hourly worker, however, and they do not have any managerial responsibilities or personal discretion over how they do their job, then they are not exempt from overtime. The employer has merely used that title to make up for a budget shortfall.
Tip-sharing violations are another way for restaurants that are short on cash to cheat their employees. Under the federal Fair Labor Standards Act (FLSA), tipped employees are entitled to their tips and do not have to turn them over to an employer. That does not mean an employer can’t have a tip-pooling program, but this must be done in compliance with the FLSA. Tip-pooling policies must be clearly laid out to tipped employees, for example. The percentage that servers, bartenders, and others are expected to tip out should also be clear and consistent.
Employers also can’t use tip sharing to top up the wages of cooks and dishwashers who are not normally tipped. Facing a cash flow problem, some restaurant owners are often tempted to use shared tips as a way of making it look like all staff are being paid minimum wage. They will underpay kitchen staff and use tip-pooling to make up the difference.
If a restaurant is dodging overtime, underpaying workers, or messing with tips, that can constitute wage theft under the FLSA. Restaurant staffs have tough, demanding jobs and deserve to receive every penny they have earned. It is not their fault that their employer has failed to budget properly for crucial expenses such as wages and overtime.
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
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.
Uber’s “Route-Based Pricing” Cheats Drivers Out of Commissions
In an apparent effort to boost profits and appease shareholders, last year Uber Technologies introduced “upfront pricing” to show riders the cost of a trip before they book it. While the price may be upfront to riders, drivers have been kept in the dark about their commissions on these fares, with allegations that the carpooling service is unlawfully denying drivers compensation in violation of wage and hour laws.
What Is “Route-Based Pricing”?
Uber admitted to Bloomberg News that it has been using artificial intelligence and algorithms to determine what riders would be willing to pay for a certain trip, which in some instances causes them to be charged more than the usual cost of a trip. Called “route-based pricing,” the company began doing this last year when it launched its “upfront pricing” scheme, which shows riders the price of their trip before they book it. The new system is a departure from prior calculations that set fares by a combination of distance, time, and geographic demand. In some cases, a rider may be charged more than the usual cost of the trip.
Wage Theft from Reduced Driver Commissions
The problem is that Uber has not, to this point, shown the driver when a rider has accepted a higher fare than usual for a certain route. Until now, Uber has compensated drivers based on a reduced fare and quietly pocketed the difference – with many drivers none the wiser. Some drivers claim that the company intentionally designed the software to utilize a longer route to increase the price that passengers pay for the fare.
In the Bloomberg story, Uber said it plans to start showing drivers the price a passenger pays for a ride. However, the company has also said it will stop indicating what percentage it took from the fare before giving the driver his or her commission.
Other Uber Wage Abuse Claims
This is yet another example of potential wage theft by Uber. Earlier this year, the rideshare giant acknowledged it had underpaid drivers in New York and Philadelphia by tens of millions of dollars, and other claims have been made that the company misclassified drivers as independent contractors rather than employees to avoid wage and overtime obligations.
Uber is a very successful company, but may be ignoring the fact that its success comes from its drivers, who appear to not be receiving their fair share.