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Wage Theft

West Virginia Employer Paying $119,040 To Employees With Disabilities To Resolve Violations

A federal jury has entered a verdict against Randolph County Sheltered Workshop Inc. – doing business as Seneca Designs – and ordered the nonprofit organization to pay $119,040 in back wages to 34 employees. Entered in the U.S. District Court for the Northern District of West Virginia-Elkins Division, the jury found that the organization violated the minimum wage provisions of the Fair Labor Standards Act (FLSA).

Employees at Randolph County Sheltered Workshop assemble fishing lures and lure packages for Leland’s Lures in Searcy, Arkansas.

The FLSA requires that covered, non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week.

Section 14(c) of the FLSA authorizes employers, after receiving a certificate from the Wage and Hour Division, to pay subminimum wages – wages less than the federal minimum wage – to employees with disabilities when the disability impairs their productivity for the work being performed.

Investigators found violations that resulted from the employer’s failure to obtain a certificate authorizing their payment of sub-minimum wages to employees with disabilities. Absent that certificate, employees were legally due the full federal minimum wage. Investigators also found that the employer failed to post information about rights for employees with disabilities paid at a sub-minimum wage, as the law requires.

The back wages received by these workers will undoubtedly have a positive impact on their lives. The ruling will also positively impact compliance and will help to level the playing field for employers that follow the law and pay their employees properly.

For more information about the FLSA and other wage and hour laws, or if you think you may be owed back wages, please contact an experienced FLSA attorney today.

New Payroll Audit Independent Determination Pilot

The U.S. Department of Labor launched a wage and hour self-audit program for employers on April 3, 2018.  The pilot program, called Payroll Audit Independent Determination (PAID), is designed to allow employers to identify non-compliance with the Fair Labor Standards Act (FLSA) in their pay policies.

Generally, under the FLSA, an employer can be held liable for liquidated (double) damages for any willful violations of the Act.  However, the PAID program will allow an employer to avoid paying the liquidated (double) damages that are imposed on employers for willful violations.  However, employers remain skeptical of the program, and for good reason.

The PAID program is designed to identify violations of the federal FLSA, not state wage and hour laws. As the FLSA’s minimum wage becomes increasingly outdated, many states are increasing their state minimum wages.  Additionally, some states have passed legislation to improve working conditions by requiring the employer to provide meal and rest breaks.  One concern for employers is that they would identify a violation of the FLSA, notify and pay the employee, only for the employee to then become suspicious of other wage violations that may be present under state labor laws.  In other words, the employer may alert the employee to wage and hour violations that employee would have otherwise been unaware of.

The program has been received by both employers and employees with trepidation.

Overwhelming Opposition to DOL’s Proposed Changes to Law for Tipped Employees Makes a Difference

The Department of Labor (DOL) under the current administration proposed changing the law to permit restaurant employers to require tip sharing between servers and cooks.  The DOL’s proposed rule received more than 218,000 comments, most of which were negative.  The Economic Policy Institute recently published a report that estimated $5.8 billion dollars in tips would be taken from servers, redistributed to back of the house staff, and possibly just retained by the employer, if the DOL’s rule had passed.

Currently, the federal minimum wage for workers who get tips is $2.13 per hour, when the employer takes the maximum tip credit.  Several states no longer permit an employer to take a tip credit.

The Fair Labor Standards Act is a federal law that sets forth the parameters of minimum wage and overtime for all employers. In addition to the FLSA, most states have corresponding wage laws that provide a state minimum wage rate.  In fact, many cities and states have already raised their overall minimum wages, as the federal law has become out of date.  It was last updated in 2009.

The 2,232-page spending bill passed in March 2018 included a section that made clear that employers may not pocket any portion of tips that diners leave for workers.   Despite threatening to veto the bill, President Trump did eventually sign it.  Since taking office, the Department of Labor under the Trump administration has made a number of decisions that lean heavily in favor of the employer and against the employee.  This is unsurprising given the appointments made by President Trump, which have all been very pro-employer appointments.  The passage of this bill marks a rare victory for employees, amid a series of pro-employer decisions from the Department of Labor.

Rental Car Industry Hit with Massive FLSA Wage and Hour Lawsuits

The rental car industry has recently come under scrutiny and is facing wage and hour lawsuits for allegedly violating various employment laws. In the past several years, millions of dollars have been paid out to settle rental car employee lawsuits for violations under the Fair Labor Standards Act (“FLSA”). Violations include late or missed meal periods, missed rest breaks, unpaid overtime, vacation time, and off-the-clock work.

Created in 1938, the FLSA introduced a maximum workweek, established a national minimum wage and a guaranteed time-and-a-half for overtime for certain positions in certain jobs. For covered, nonexempt employees, the FLSA requires overtime pay at a rate of not less than one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. Additionally, the FLSA requires employers to keep accurate records of hours worked and wages paid to employees.

Avis Budget Car Rental LLC

In an unpaid overtime lawsuit against Avis Budget Car Rental LLC, two employees filed a class action lawsuit in New Jersey federal court for failure to pay overtime, failure to keep time records, and other labor law violations. The details of the settlement were filed under seal. Avis settled another wage and hour lawsuit consisting of a 200-member collective action in New York federal court. There, the plaintiffs had alleged that Avis improperly classified shift managers as exempt from overtime. The plaintiffs claimed that they spent the majority of their time performing the exact same tasks that hourly employees performed, including cleaning cars, checking in returned cars, moving or shuttling cars from one location to another, and renting cars to customers at the counter. After several years of fighting the case, Avis agreed to settle for $7.8 million.

Enterprise Rent a Car

In 2013, Enterprise Rent a Car reached an $8 million settlement of one rental car employee lawsuit after being accused of wrongfully categorizing assistant managers as exempt from overtime pay. And they are not alone; other rental car companies named in wage and hour lawsuits include Alamo, Dollar and Thrifty. Thrifty and Hertz have agreed to pay nearly $2 million in back pay owed to their workers in Seattle-Tacoma International Airport under the city’s increased minimum wage law.

Know Your Rights

Employees are encouraged to know and understand their rights and categorization. To be classified as exempt, an employee must primarily perform certain managerial duties. Plaintiffs in recent car rental company lawsuits have been managers and assistant managers but were successful in their claims because their job duties and salary did not exempt them from the protection of the FLSA.

There are many complex laws and regulations that exist to protect the rights of employees. If you worked for rental car company and suffered a wage and hour violation such as late or missed meal periods, missed breaks, off-the-clock-work, unpaid overtime, or unpaid vacation time, it is important that you seek an employment attorney who specializes in wage and hour laws.

Defeating Arbitration Clauses

Employers increasingly include arbitration clauses as mandatory parts of their employment agreements with their employees.  These clauses prevent employees from pursing any actions—wage and hour, discrimination, wrongful termination, etc.—against their employers in court.  They also prohibit employees from banding together and bringing collective and class actions.  This summer the United States Supreme Court is likely to rule on the enforceability of these provisions under labor and employment law, other courts are using more traditional contract rules to evaluate them.

The 10th Circuit is considering a case on behalf au pairs who are challenging the J-1 visa’s cultural exchange program.  The District Court held that the arbitration clause in the agreements was unconscionable under California’s unconscionability law.  In arriving at this conclusion, the District Court found that the provision was harshly one-sided.

Some of the factors that the District Court considered in coming to this conclusion were the young age of the au pairs, them not being native English speakers, and a “loser pays” provision.  Like many employees, the agreement was presented from a strong party to a weaker party on a take-it-or-leave-it basis.

As the au pairs continue their arguments before the 10th Circuit, they are making arguments that affect many employees who are faced with arbitration agreements.  Many employees are completely unfamiliar with the concept of arbitration.  They do not realize that they are giving up a right guaranteed to them by the Bill of Rights—the right to a trial by jury in civil matters—when they sign these arbitration agreements.

If you have any further questions about whether you are bound by an arbitration agreement with your employer, the Wage Authority Group is awaiting your call.