Owed Unpaid Wages?

Information for workers owed unpaid wages.

Wage Theft

When Tip-Pooling Becomes Wage Theft

What do Chili’s, Red Robin, Starbucks and even New York’s ritzy Le Cirque have in common? All have been accused of illegal tip-pooling practices that deprived restaurant workers of their rightful wages.

These restaurants have faced class action lawsuits brought by workers claiming tip-sharing violations, and some have paid significant settlements as a result:

When Is Tip-Pooling Wage Theft?

Under the federal Fair Labor Standards Act (FLSA), a tip is the sole property of the tipped employee and he or she cannot be forced to give it up. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer.

Restaurants are, however, allowed to implement tip-pooling policies. It’s not illegal if tips are shared among restaurant workers who customarily and regularly receive tips. The FLSA does not regulate how the sharing is calculated.

Which Restaurant Employees May Be Required to Share Tips?

The key language here, though, is “employees who customarily and regularly receive tips.” Some restaurants mandate tip-pooling with kitchen staff, such as cooks and dishwashers, who do not have a role in serving customers directly. In other words, as a general rule of thumb, “front of the house” employees cannot be required to share tips with “back of the house” employees. This can be a problem if the restaurant is using tip-pooling to avoid having to pay those workers minimum wage. Under the FLSA, that is illegal and tipped workers should not be forced to share tips with those employees.

Any violation of the FLSA when it comes to tip-pooling is wage theft – and restaurants can be held liable for depriving restaurant workers of their rightful earnings.

Home-Based Call Center Employees at Risk for Wage Theft

To cut costs, many call center companies now employ agents who work from home. While it’s perfectly fine to save money on office space, those telecommuting employees must still be paid at least the minimum wage, as well as overtime. This is mandated by the federal Fair Labor Standards Act (FLSA).

Unfortunately, some call centers and business process outsourcing companies are guilty of withholding wages and overtime pay from home-based telephone agents and representatives.

How Do Call Centers Violate the FLSA

Kelly Services, Tech USA, Teleperformance, Concentrix, and Signia Marketing, have all faced accusations they violated the FLSA and withheld wages, overtime, or both from at-home agents. Many have paid out millions in settlements to the employees they cheated.

Some of these violations happen when agents are required to perform certain tasks before or after they officially clock in, or are not compensated for time spent dealing with administrative matters. This includes:

  • Starting up their computers, signing on to applications and downloading work instructions
  • Shutting down applications and computers after ending their shifts
  • Reading work-related emails before and after their shifts
  • Attending team meetings before or after their shifts
  • Waiting on hold with technical support when disconnected from computer systems and networks

In some cases, agents can spend 30 minutes or more of unpaid time per shift on these tasks and issues. These same employees might also face pressure to not record all the hours they work, or to work off the clock.

Withholding Overtime from At-Home Call Center Reps

Along with forcing at-home agents to underreport their hours, some call centers may also try to avoid paying them overtime. This goes hand-in-hand with pressuring employees to work before or after they officially clock in. That unreported time would frequently count as overtime if properly recorded, as agents often work more than 40 hours a week.

Many employers also attempt to convince at-home employees that the time spent starting up and logging into computers is equivalent to their normal commute time if they had to drive to an office—often called a “virtual commute.”  Such an explanation should be a red flag for employees.

Unlawfully Misclassifying Workers As Exempt from Overtime

To duck paying overtime, employers may also give an agent a title that makes it sound like he or she has the duties of a supervisor or manager when, in fact, he or she performs the same tasks as an hourly worker (e.g., Team Lead). This is done so the employer can classify the worker as being exempt from overtime, and violates the FLSA if the employee’s duties are not truly those of a manager or supervisor.

Employing agents who work from home may save call center companies the cost of leasing office space, but they should not also be picking the pockets of those at-home employees. Just because a worker is at home does not mean he or she falls outside the scope of the FLSA.

Home-based call center agents must be paid at least the minimum wage and any applicable overtime. Otherwise, their employers must be held accountable for wage theft and abuse.

How Restaurants Avoid Paying Overtime by Misclassifying Workers

Under the federal Fair Labor Standards Act (FLSA), restaurant workers paid by the hour should receive overtime if they work more than 40 hours a week. That’s the law.

Some restaurants, however, try to dodge paying overtime by misclassifying some employees as “management” when, in fact, they are not. It is true that salaried workers in supervisory or managerial positions are sometimes exempt from overtime. But the FLSA has strict rules around who can and cannot be classified as exempt – and it comes down to the exact duties performed.

Not All Managers Are Exempt from Receiving Overtime

A restaurant can’t simply give an hourly worker a title such as “manager” or “assistant manager” to avoid paying them overtime. If that restaurant employee has similar duties as other nonexempt workers – working a till, serving customers, preparing food, cleaning – then he or she is owed overtime. An employee can only be considered exempt if he or she supervises others and has what’s known as “personal discretion” over their work.

FLSA Class Actions Against Restaurants

Many restaurants learn this the hard way. An Arby’s franchise in Florida, for example, currently faces a class action lawsuit on behalf of current and former non-exempt employees. The restaurant worker bringing the suit alleges she regularly worked more than 40 hours a week without being paid overtime because the restaurant misclassified her as exempt. She did not perform any managerial or supervisory duties. Rather, her work consisted of running the cash register, helping customers with orders, preparing food and cleaning. The lawsuit says the Arby’s franchisee owes her unpaid overtime for approximately 870 hours, and seeks compensation for other misclassified workers at that same location.

Also in Florida, a sous chef working for Kona Grill has filed his own class action lawsuit over unpaid overtime. He alleges the chain routinely misclassifies sous chefs and assistant managers as exempt, when they are, in fact, hourly employees and owed overtime. These workers did not have supervisory roles and did not exercise personal discretion in determining their duties.

In April, Carrabba’s Italian Grill LLC was sued in a national class action alleging it, too, misclassified nonexempt restaurant employees to avoid paying overtime. The lead plaintiff in that case, who is suing on behalf of all similarly situated Carrabba’s workers, alleges she often works more than 60 hours a week but never receives overtime. The suit alleges that, though her title was “restaurant manager,” she performed the same duties as a non-exempt employee. As such, she is owed overtime.

Damages in FLSA Misclassification Lawsuits

Plaintiffs in these lawsuits can be entitled to not only their unpaid overtime but also liquidated damages, attorneys’ fees, and costs. The amounts can be significant. Bob Evans Farms paid $16.5 million to settle a suit brought by assistant managers, and Panda Express paid a $3 million settlement to store managers.

Misclassifying employees is a serious problem in the restaurant industry and costs an average worker hundreds, if not thousands, of dollars a year in unpaid overtime. This is tough, demanding work and restaurant employees have a right to be paid all of what they are owed – especially when they sacrifice personal time by working more than 40 hours a week.

Uber Admits to Cheating New York City Drivers – and They May Not Be Alone

The ride-sharing giant, Uber, announced in May that the company had “mistakenly underpaid” its New York City drivers for two-and-a-half years – a purported error that has denied its drivers tens of millions of dollars in unpaid fees.

How Does Uber Calculate Drivers’ Commissions?

Uber’s 2014 nationwide driver agreement stipulates that it charges drivers a commission of around 25% of each fare after taxes and fees are deducted. For its New York City drivers, however, Uber was calculating the commission on the entire fare paid by the rider – without first deducting sales tax and the city’s injury-compensation fund fee. It’s a substantial miscalculation that left drivers holding the bag.

To make amends, the company said it would refund the money, plus interest, with each driver receiving an average of $900. Any driver completing a trip since signing the 2014 agreement with Uber is eligible for the refund.

Uber’s Recurring Wage Abuses

While Uber’s May announcement gave the impression it had just discovered the problem, that may not be the case. Earlier this year, the company admitted to doing the same thing to Philadelphia drivers.

There is also a recent troubling report that suggests Uber was aware of the problem in New York as far back as 2015, along with New York State regulators. According to the New York Times, changes Uber made to its driver contract in 2015 indicate it was aware of the problem and has been trying to address it since.

The issue is not entirely settled in New York City, either. Some Uber drivers feel the company has not fully repaid them, and have filed a class action lawsuit seeking full payment for what they are owed.

All of this raises troubling questions about whether Uber is paying drivers what they are rightfully owed, and whether or not the company is admitting how big the problem is – and how far back it goes.

Call Center Workers Frequently Robbed of Overtime Pay

Call center agents have demanding jobs that frequently require putting in many extra hours. Unfortunately, their employers often cheat those same employees out of their rightful overtime pay.

Wage abuse, particularly unpaid overtime, is rampant in the call center industry. This is a violation of the federal Fair Labor Standards Act (FLSA). It is so common the U.S. Department of Labor issued a warning on illegal pay practices targeting call center workers.

Examples of Call Center Wage Theft

There have been reports, for example, that Yelp! is withholding overtime pay from its sales agents. Similar claims have been made against Concentrix, Teleperformance, Huntington Bank, Minacs, Auto Club, Ameridial, Bank of America, and others. In 2016, Sutherland Global Services paid $1.075 million to settle an unpaid overtime lawsuit brought by its call center employees.

The main way employers avoid paying call center workers overtime is by requiring them to perform duties before, after, or even during their shift, which can include:

  • Starting up their computers and logging into the programs they need to do their work
  • Closing out of applications and shutting down computers at the end of a shift
  • Downloading work instructions
  • Reading work-related emails before or after a shift
  • Being made to clock out during a shift when dealing with technical support if disconnected from computer systems and networks

These unpaid tasks can quickly add up to as much as 30 minutes per shift for some call center workers. Agents also frequently face pressure to not report all the hours they have worked or to work off the clock.

Misclassification & Off-the-Clock Work

The result is many call center employees may be putting in far more than 40 hours a week but are not being paid overtime by their employers, a direct violation of wage and hour laws.

Some employers also use job titles to cheat call center agents out of overtime. They may give them titles that sound like the employee is a supervisor or manager, when their actual duties are no different from those of an hourly worker. This is done in an attempt to declare the agent exempt from overtime, and violates the FLSA if the worker does not have a managerial job.

Call center employees deserve to be paid for putting in long hours that take them away from their families and cut into personal time. Anything less is overtime theft under the FLSA.