Jan 25, 2022 | Overtime & Wages
Overtime Work & Premium Pay – Overtime Pay Provisions Of The Fair Labor Standards Act (“FLSA”)
An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.
FLSA Overtime Requirements
Unless specifically exempted, employees covered by the FLSA must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
There is no limit in the FLSA on the number of hours employees aged 16 and older may work in any workweek.
The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest.
The FLSA applies on a workweek basis. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It does not need to coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Usually, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.
The regular rate of pay cannot be less than the minimum wage . The regular rate includes all remuneration for employment except certain payments excluded by the FLSA itself.
Payments which are not part of the regular rate include pay for expenses incurred on the employer’s behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays or illness.
Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings – calculated by dividing the total pay for employment (except for the statutory exclusions noted above) in any workweek by the total number of hours actually worked.
Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates, i.e., the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs. Additionally, section 7(g)(2) of the FLSA allows, under specified conditions, the computation of overtime pay based on one and one-half times the hourly rate in effect when the overtime work is performed.
Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate.
Examples Of Some Common Overtime Problems
Fixed Sum for Varying Amounts of Overtime: A lump sum paid for work performed during overtime hours without regard to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money paid is equal to or greater than the sum owed on a per-hour basis.
For example, no part of a flat sum of $180 to employees who work overtime on Sunday will qualify as an overtime premium, even though the employees’ straight-time rate is $12.00 an hour and the employees always work less than 10 hours on Sunday. Similarly, where an agreement provides for 6 hours pay at $13.00 an hour regardless of the time actually spent for work on a job performed during overtime hours, the entire $78.00 must be included in determining the employees’ regular rate.
Salary for Workweek Exceeding 40 Hours: A fixed salary for a regular workweek longer than 40 hours does not discharge FLSA statutory obligations.
For example, an employee may be hired to work a 45 hour workweek for a weekly salary of $405. In this instance the regular rate is obtained by dividing the $405 straight-time salary by 45 hours, resulting in a regular rate of $9.00. The employee is then due additional overtime computed by multiplying the 5 overtime hours by one-half the regular rate of pay ($4.50 x 5 = $22.50).
Overtime Pay May Not Be Waived: The overtime requirement may not be waived by agreement between the employer and employees.
For example, an agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance. An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee’s right to compensation for compensable overtime hours that are worked.
Source: U.S. Department of Labor (Fact Sheet #23, Revised October 2019)
Victims Of Employer Wage & Hour Violations
Employees who believe they have been harmed by employer wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
Jan 24, 2022 | Overtime & Wages
Minimum Wage & Overtime Pay For Employees In California
Although there are some exceptions, almost all employees in California must be paid the minimum wage as required by state law. Presently, the employee minimum wage applicable to employers in California with 25 or less employees is $14.00 per hour. The employee minimum wage applicable to employers in California with 26 or more employees is $15.00 per hour.
California’s schedule for new state minimum wage increases can be accessed by clicking here.
An employee CANNOT agree to work for less than the minimum wage. The minimum wage is an obligation of the employer and CANNOT BE WAIVED by agreement, including collective bargaining agreements.
In California, the general overtime provisions are that a nonexempt employee 18 years of age or older, or any minor employee 16 or 17 years of age who is not required by law to attend school and is not otherwise prohibited by law from engaging in the subject work, shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one-half times his or her regular rate of pay for all hours worked over eight hours in any workday and over 40 hours in the workweek or double time.
Eight hours of labor constitutes a day’s work, and employment beyond eight hours in any workday or more than six days in any workweek requires the employee to be compensated for the overtime at not less than:
One and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
In California, there are a number of exemptions from the overtime law. There are also a number of exceptions to the general overtime law. An “exemption” means that the overtime law does not apply to a particular classification of employees, and an “exception” means that overtime is paid to a certain classification of employees on a basis that differs from that stated above.
Minimum Wage Exceptions
There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.
There also is an exception for learners, and there are exceptions for employees who are mentally or physically disabled, or both, and for nonprofit organizations, such as sheltered workshops or rehabilitation facilities that employ disabled workers.
Differences Between State, Local & Federal Minimum Wage
Most employers in California are subject to both the federal and state minimum wage laws. Also, local entities (cities and counties) are allowed to enact minimum wage rates and several cities have recently adopted ordinances which establish a higher minimum wage rate for employees working within their local jurisdiction.
When there are conflicting requirements in the laws, an employer must follow the stricter standard; that is, the one that is the most beneficial to the employee. Thus, since California’s current law requires a higher minimum wage rate than does the federal law, all employers in California who are subject to both laws must pay the state minimum wage rate unless their employees are exempt under California law. Similarly, if a local entity (city or county) has adopted a higher minimum wage, employees must be paid the local wage where it is higher than the state or federal minimum wage rates.
Source: California Department of Industrial Relations, Labor Commissioner’s Office, Minimum Wage & Overtime (Accessed 1/20/22); U.S. Department of Labor, State Minimum Wage Laws (Accessed 1/24/2022).
Employees Who Have Been Victims Of Employer Wage & Hour Violations
Workers who believe they are victims of employer wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] to request a free, no-obligation evaluation of potential legal claims.
Jan 22, 2022 | Overtime & Wages
A proposed Fair Labor Standards Act collective action complaint has been filed against Defendants Same Day Delivery Inc., Scott Weinstein, and Bene Ewerton in United States District Court, Southern District of New York.
According to the complaint, filed on January 20, 2022, the Same Day Delivery Defendants failed to pay their delivery drivers legally required wages under the Fair Labor Standards Act (“FLSA”) and New York State Labor Law (“NYLL”), including overtime.
The Defendants, according to the complaint, maintained an illegal policy and practice of appropriating the tipped wages of the company’s delivery drivers.
The lawsuit seeks recovery against the Defendants for alleged violations of the FLSA, 29 U.S.C. §§ 201 et seq., and violations of Articles 6 and 19 of the NYLL and supporting New York State Department of Labor regulations.
Additionally, the lawsuit seeks injunctive and declaratory relief and to recover unpaid minimum wages, overtime wages, unpaid spread-of-hours, unlawfully deducted wages, liquidated and statutory damages, pre- and post-judgment interest, and attorneys’ fees and costs pursuant to the FLSA, NYLL, and the NYLL’s Wage Theft Prevention Act.
Delivery Drivers And Supervisors Of Same Day Delivery Who Believe They Have Been Harmed By Wage And Hour Violations
If you believe you have been the victim of wage and hour violations while employed by Same Day Delivery, please complete the form above on the right or e-mail [email protected] to request a no-obligation evaluation of potential legal claims.
Jan 21, 2022 | Overtime & Wages
U.S. Department of Labor Conducts Outreach & Enforcement To Ensure Wage And Hour Compliance During Kentucky Tornado Cleanup Efforts
Employees in Kentucky should be aware that members of the U.S. Department of Labor’s Wage and Hour Division issued a news release stating that response team are providing in-person assistance in the area where tornadoes in December 2021 caused widespread damage. Response Team members are reminding workers of their rights, and making sure employers understand their responsibilities when it comes to paying workers properly.
The U.S. Department of Labor’s Wage and Hour Division assists in emergency and disaster recovery efforts in the communities affected by severe storms, floods and other disasters by ensuring employees conducting essential recovery work are paid as the law requires.
The Department of Labor stated that it is committed to ensuring that workers in this country are paid properly and for all the hours they work, regardless of immigration status.
The government agency also enforces contracts entered into with the federal government to include the Davis Bacon and Related Acts as well as The McNamara-O’Hara Service Contract Act.
The Service Contract Act, which generally applies to federal or District of Columbia contracts for clean-up activities following a disaster, requires contractors and subcontractors performing services on prime contracts in excess of $2,500 to pay service employees in various classes no less than the wage rates and fringe benefits found prevailing in the locality, or the rates (including prospective increases) contained in a predecessor contractor’s collective bargaining agreement.
Davis-Bacon regulations require federal contractors and subcontractors performing work on contracts in excess of $2,000 to pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits for corresponding classes of laborers and mechanics employed on similar projects in the area.
Source: United States Department of Labor.
Jan 20, 2022 | Overtime & Wages
Tipped Employees In California & California Labor Code Section 351 (“Labor Code Section 351”)
Labor Code Section 351 prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron. Furthermore it is illegal for employers to make wage deductions from gratuities, or from using gratuities as direct or indirect credits against an employee’s wages.
The California law further states that gratuities are the sole property of the employee or employees to whom they are given. “Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons. It also includes any amount paid directly by a patron to a dancer covered by IWC Wage Order 5 or 10.
What Is A Tip?
A tip is money a customer leaves for an employee over the amount due for the goods sold or services rendered. Tips belong to the employee, not to the employer.
A customer pays their bill with a credit card, and the payment includes a tip. When can the employee expect to receive the money from the employer?
Payment of a gratuity made by a patron using a credit card must be paid to the employee no later than the next regular payday following the date the patron authorized the credit card payment.
Can my employer deduct the credit card processing fees from my tips?
No. Labor Code Section 351 provides that the employer must pay the employee the full amount of the tip that is indicated on the credit card. The employer may not make any deduction for credit card processing fees or costs that are charged to the employer by the credit card company from gratuities paid to the employee.
A worker is employed in a large restaurant as a waiter. The waiter’s employer told the employee that he/she is required to share tips with the busboy and bartender. Is there an obligation to do this?
Yes. Labor Code Section 351 provides that “every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”
The section has been interpreted to allow for involuntary tip pooling so long as the tip pooling policy is not used to compensate the owner(s), manager(s), or supervisor(s) of the business, even if these individuals should provide direct table service to a patron or are in the chain of service to a patron.
Further, the policy must be fair and reasonable. Therefore, an employer can require an employee to share tips with other staff that provide service in the restaurant, so long as the employees that share in the tip pooling policy are employees to whom the tip was paid, given, or left. In this regard, the courts have validated policies that distributed tips among employees who provide “direct table service” or who are in the “chain of service” provided that employee in the chain of service bears a relationship to the customers’ overall experience. (updated March 2013).
Are tips received considered part of one’s “regular rate of pay” for overtime calculations?
No. Since tips are voluntarily left by the customer of the business and are not being provided by the employer, they are not considered as part of one’s regular rate of pay when calculating overtime.
Is a mandatory service charge considered to be the same as a tip or gratuity?
No. A tip is a voluntary amount left by a patron for an employee. A mandatory service charge is an amount that a patron is required to pay based on a contractual agreement or a specified required service amount listed on the menu of an establishment.
An example of a mandatory service charge that is a contractual agreement would be a 10 or 15 percent charge added to the cost of a banquet. Such charges are considered as amounts owed by the patron to the establishment and are not gratuities voluntarily left for the employees. Therefore, when an employer distributes all or part of a service charge to its employees, the distribution may be at the discretion of the employer and the service charge, which would be in the nature of a bonus, would be included in the regular rate of pay when calculating overtime payments.
Is it legal for an employer to deduct tips from one’s paycheck?
No. An employer can neither take one’s tips (or any part of them) nor deduct money from one’s wages because of tips earned. Further, an employer cannot credit one’s tips against the money the employer owes the employee. Labor Code Section 351
An employee is paid less than minimum wage because the employer includes the employee’s tips in his/her hourly pay. Is this legal?
No. Unlike under federal regulations, in California an employer cannot use an employee’s tips as a credit towards its obligation to pay the minimum wage. California law requires that employees receive the minimum wage plus any tips left for them by patrons of the employer’s business. Labor Code Section 351
What can an employee do if his/her employer credits tips against one’s wages?
An employee can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner’s Office) or file a lawsuit in court against his/her employer to recover the lost wages. Additionally, if an employer is crediting an employee’s tips against wages, the employee is being underpaid wages and, thus, if the employee no longer works for this employer, the employee can make a claim for the waiting time penalty.
What can an employee do if his/her employer retaliates because the employee objected to the crediting of tips against one’s wages?
If an employer discriminates or retaliates in any manner whatsoever, for example, the employer discharges the employee because the employee objected to the crediting of tips against wages, or because a claim was filed or threatened to be filed with the Labor Commissioner, an employee can file a discrimination/retaliation complaint with the Labor Commissioner’s Office. Alternatively, the employee can file a lawsuit in court against the employer.
Source: California Department of Industrial Relations, Labor Commissioner’s Office, Tips & Gratuities (Accessed 1/20/2022).
Employees in California who believe they have been the victim of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
Jan 20, 2022 | Overtime & Wages
Security Guard & Maintenance Services
The security guard service industry includes those firms that provide protection to firms or individuals. Usually security guards cover a post daily and are paid on an hourly basis.
The maintenance service industry includes firms that provide general janitorial services. Normally, the firm provides the necessary materials to do the cleaning, and employees generally perform work at one or more locations during the work shift.
If the security guard or maintenance worker is employed in an establishment that is engaged in commerce or in the production of goods for commerce, such as a warehouse, factory, bank or insurance company, he/she is covered by the FLSA.
If the security guard or maintenance firm has sales or projects sales in excess of $500,000 per year, or is part of other related businesses where there is common ownership, control, or business purpose and the combined sales or projected sales are in excess of $500,000 per year, then the FLSA will apply to all employees of the firm/enterprise.
Pay Requirements
The FLSA requires the payment of the federal minimum wage and the payment of time and one-half the regular rate of pay for hours worked in excess of 40 in the workweek. The FLSA also requires the firm to make, keep and preserve certain records among which are the hours worked on a daily and weekly basis by non-exempt employees.
There are also certain restrictions in the employment of minors under age 18, such as the number of hours worked per day/week, how late they can work in the day, and the work in which they may engage. The 1996 Amendments to the FLSA allow employers to pay a Youth Minimum Wage of not less that $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the Youth Minimum Wage.
Examples Of Industry Wage And Hour Problems
Security Guard Firms
The security guard cannot bear the cost of the uniform, gun, whistle, belt, and other employer/industry required tools if by purchasing them he/she receives less than the applicable minimum wage or such purchasing would cut into any overtime wages earned. This applies whether she\he buys the uniform directly or if it is sold to the employee by the firm.
The cost of dry cleaning the uniform cannot be borne by the employee, if this results in him/her receiving less than the minimum wage or the costs would cut into any overtime wages.
Overtime must be calculated on a workweek basis, and the hours cannot be averaged over a two week period.
The hours worked by guards in more than one post in the same week must be counted together for overtime purposes.
Travel time between work sites must be treated as hours worked.
All hours of work must always be recorded; sometimes they are hidden by showing “expense” payments for hours over 40 in a week, which is illegal.
Maintenance Service Firms
Every person who works must receive payment. If a man and wife team and/or other family members work together, each member of the team must be carried on the payroll and each must receive proper compensation for their hours worked.
Minors under the age of 16 cannot work past 7:00 p.m., except from June 1st through Labor Day, when they may work until 9:00 p.m.
If minors work, they must also receive proper compensation for the hours they work.
Overtime must be paid after 40 hours of work in the workweek to all non-exempt employees regardless of the method of compensation, such as hourly, piece rate, task basis, or salary.
The hours worked by a janitor who works in more than one establishment must be counted together for overtime purposes.
Source: U.S. Department of Labor (Fact Sheet #4, Revised July 2008).
Security Guards, Maintenance Services & Janitorial Services employees who believe they are victims of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] to request a free, no-obligation evaluation of potential legal claims.
