Unpaid Overtime Pay

This issue arises most often in situations when an employee wants to know whether the time they spent freely offering to do something for their employer is considered volunteering or work and whether that time is compensable. For employers, the Fair Labor Standards Act (FLSA) places some strict limits on “volunteering” by employees to protect against the obvious abuse that could occur because of the vastly different bargaining positions between employers and employees. Some examples of activities considered compensable work include:

1. An employee voluntarily continues to work at the end of their working hours, such as finishing an assigned task, preparing reports, finish waiting on a customer or taking care of a patient in an emergency at the end of their shifts.
2. An employee who is required to remain on call on the employer’s premises with constraints placed on the employee’s freedom.
3. A person hired to be engaged to wait for something to do or something to happen.
4. An employee travels from job site to job site during the workday as part of their principal activity.

People are allowed to volunteer their services to public agencies and their community. Therefore, the employer need not compensate an employee for time spent volunteering for charitable purposes if the employee is truly volunteering and not performing the volunteer work as a result of coercion or pressure by the employer. Time spent volunteering primarily for the benefit of the employer or under his direction or control is work and must be paid in accordance with the minimum wage and overtime requirements of the FLSA.

When Volunteering Becomes Free Labor

The Department of Labor (DOL) has clearly expressed regulations for when an employer cannot require or accept volunteer service from their nonexempt employees. The FLSA and its regulations provide one exception, and that is only when it comes to volunteer service at outside events. For these events, for-profit, private sector employers can accept volunteer service from their employees as can non-profit and/or public entities. Employees can participate voluntarily and without compensation in outside charitable events if:

1. The volunteer or charity event is unrelated to the employer’s usual business and participation does not bring direct economic benefit to employer’s business.
2. The event takes place outside of regular working hours.
3. Employees’ participation is truly voluntary, meaning that employers cannot treat volunteer participants more favorably than non-participants.
4. Employers do not employ and regularly pay workers to participate in that event.

Each case is different, so you cannot assume that every charitable event is the same or your voluntary time to do something freely for your employer is not compensable. Also, some employees are exempt from various provisions of the law. Too see if the time you spent is considered work and therefore compensable, it’s best to contact an attorney knowledgeable about wage and hour laws.

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Companies have the choice to use alternative overtime payment methods without violating provisions of the Fair Labor Standards Act (FLSA). Still, some companies violate the FLSA when they do not adhere to the strict guidelines that alternative overtime payment methods require. A class of equipment operators and trainees allege that their employer, Schlumberger Technology Corporation, did just that.

The employees of Schlumberger Technology Corporation took their employer to court for violating the FLSA’s fluctuating workweek method of payment. The employees and their employer have finalized settlement negotiations and have asked a federal court to approve a $1.35 million settlement to their FLSA class action lawsuit.

The employees claim that Schlumberger violated the law by paying them under the “fluctuating workweek” method. This method allows employers to pay workers overtime at a half-time rate, as opposed to the FLSA-mandated time and one-half rate. However, in order to legally pay employees under the fluctuating workweek method, those employees must be paid a fixed salary.  Further, those employees who would be paid on the fluctuating workweek method would have to agree to the payment arrangement and what the overtime protocols would be before the work began. The fixed salary agreement is of utmost importance since employers can reduce overtime costs by paying some of the costs of overtime upfront in the fixed salary. This method is fair to both the employer and employee only when there is a fixed salary and an agreement to accompany the arrangement.

The lawsuit was filed in the U.S. District Court in North Dakota and is titled Elliott v. Schlumberger Technology Corp. et al., Case No. 3:13-cv-00079.

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There has been another victory for the hard-working oilfield workers in recovering their entitled overtime wages after two and a half years into the action brought by the lead plaintiff in a federal court in North Dakota.

On December 5, 2017, Baker Hughes, one of the world’s largest oil field services companies, agreed to pay as many as 122 field engineers, who opted into the collective action lawsuit under the federal Fair Labor Standards Act (FLSA), for unpaid overtime wages as well as liquidated damages.

Like many other FLSA misclassification cases in this industry, the lawsuit alleges that Baker Hughes improperly classified its field engineers as exempt from overtime compensation when they actually spent the vast majority of time performing non-exempt work, such as rigging up and operating wellsite equipment, troubleshooting problems with wellsite operations and equipment, coordinating operational logistics, and reviewing and reporting jobsite performance data, as opposed to a small segment of exempt assignments.

Arguing Against Overtime

Baker Hughes contended the position of field engineer was ineligible for overtime, as the position is subject to the administrative and/or professional exemptions and that some workers might fall within the highly compensated employee exemption with an annual salary of over $100,000. Nonetheless, the discovery revealed that during their lengthy training periods as trainees, the workers performed duties that were non-exempt in nature, and they were paid under the $100,000 threshold to be excluded from overtime pay under the FLSA.

It is typical to see unscrupulous companies in the oilfield industry exploiting the workers by paying them a fixed day rate or a fixed weekly salary for tons of hours of work every week without compensating them proper overtime pay. We urge the workers to keep a vigilant eye on such illegal pay practices by the company and come forward to speak with attorneys specializing in wage and hour laws such as the Wage Authority Group to vindicate their overtime rights.

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A lawsuit was recently filed by a former retail department manager against Urban Outfitters Inc., which claims the retail giant should have paid overtime to the manager because he was often engaged in non-managerial assignments. Initially, a collective action was filed on behalf of all retail managers. However, the class of retail managers was decertified due to dissimilar situations among class members. Since then, retail managers have been filing individual FLSA lawsuits against Urban Outfitters.

The FLSA requires that all non-exempt employees be paid overtime premiums of one and one half their regular hourly rate for all hours worked in excess of 40 in any single workweek.  However, the Department of Labor has carved out several white collar exemptions to the federal law. Each of those white collar exemptions has a requirement that the employee be paid on a salary of not less than $455 per week but also imposes an analysis of the duties the employee is engaged in to qualify for the exemption.  In the case of the Urban Outfitters retail managers, their claims argue that the job duties they were engaged in were non-exempt duties; thus, they do not qualify for any exemption to the FLSA.

Multiple Lawsuits Filed

One such individual FLSA lawsuit is Babb v. Urban Outfitters, Inc. , S.D.N.Y., No. 1:17-cv-08526, complaint filed 11/3/17 ). On the same day the Babb case was filed against Urban Outfitters, at least three other department managers filed similar lawsuits. In total, there have been at least 18 department managers that have filed individual lawsuits against Urban Outfitters since the collective action was decertified in September of 2017.

The FLSA permits an employee to file a lawsuit on behalf of himself or on behalf of himself and those similarly situated to him. The determination of whether employees are similarly situated is a decision decided by a Judge on a case-by-case basis. Most jurisdictions follow a two-step approach to collective action certification in FLSA cases. The first step applies a very lenient standard that often permits for conditional certification in order to provide notice to other class members. However, at the second step, the Court will engage in a more detailed and critical inquiry to determine whether the case is truly best handled as a collective action. In the present case against Urban Outfitters, the plaintiffs obtained conditional certification at the first stage, but the collective was later decertified on the second, more rigorous, step of collective certification under the FLSA.

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