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WAGE AND HOUR DISPUTES
AND CLASS ACTION CLAIMS
W. Mark Gavre
Tuesday, May 6, 2014
The Little America Hotel
26th ANNUAL EMPLOYMENT LAW SEMINAR
parsonsbehle.com4813-8465-0266
2
 Unpaid overtime, unrecorded worktime,
minimum wage, meal break time
 DOL: Two years back pay for everyone
affected
 Private lawsuit: Three years back pay,
amount automatically doubled, plus
attorney fees and litigation costs
 Class actions where common facts
predominate
Wage & Hour Claims
Are Dangerous!
3
 Incorrectly classifying non-exempt as
exempt
 Incorrectly classifying employees as
independent contractors or consultants
 Off-the-clock work
 Deducting for meal breaks improperly
 Not recording hours worked
 Not paying minimum wage—see state law
 Retaliation against complainers
Areas of Risk
4
 Multiple employees and former employees
in one lawsuit—small amounts become big
 Strict employer liability—no knowledge or
bad intent needed for a violation
 No defense to a violation—strict liability
 Personal liability possible
 Lawyers’ fees, expert fees and litigation
costs recoverable
 State laws can be more generous
Costly Class Actions
5
 Examples of recent 2014 settlements
attached
 Recent wage & hour DOL victories
attached
Class Actions
6
 Utah labor Commission agreement with
DOL—attached
 DOL seeking $800,000+ in Utah -attached
DOL Activity in Utah
7
 Federal minimum wage: $7.25
 21 States now have higher minimum
wages—and are going higher
– CA $8.00 now; $10.00 in 2016 (OT after 8
hours)
– San Francisco $10.74 now
– LA considering $15.37
 WA $9.32; $15.00 likely in stages
• Seattle airport $15.00 now
Minimum Wage
8
– CT $8.70 now; $10.10 by 2017
– OR $9.10
– VT $8.73
– CO $8.00
– MT $7.90
– Santa Fe, NM $10.66
 2014 new increases in minimum wage
– HI $10.10 by 2018 (in steps)
– MD $10.10 by 2018
Minimum Wage (cont.)
9
– MN $9.50 by 2016; indexed to inflation in
2018
– DE $8.25 by 2015
– W. Va. $8.75 by 2016
– Washington, D.C.: $8.25 now; $11.50 in 2016
and indexed to inflation
Minimum Wage (cont.)
10
 $7.25 with health benefits
 $8.25 without health benefits (“living wage”)
 Overtime after 8 hours if paid less than
$10.875 with health benefits
 Overtime after 8 hours if paid less than
$12.375 without health benefits
 Overtime after 40 hours if paid more
Nevada Minimum Wage and OT
11
 2/12/14 Pres. Obama issued executive
order raising minimum wage for
contractors and subcontractors on federal
projects to $10.10
 Effective 1/1/15; applies to new or
renewed contracts
 Starting 1/1/16 to be raised annually to
reflect inflation
New Minimum Wage for Federal
Government contractors
12
 3/13/14 Pres. Obama directed DOL to
consider revisions to FLSA regulations to
give more employees OT benefits
 FLSA substance in the regs, not statute,
and can be changed by DOL (1949, 2004)
 Most exemptions from OT require only
$455 weekly salary or $23,600 annually
 Raise to $700, $1,000 or more?
 Other changes possible
Planned Revisions to FLSA
Exemptions from Overtime
13
 Since 2008 upsurge in college students
working as unpaid interns to get
experience and job opportunities
 Class action lawsuits for interns as
employees entitled to minimum wage and
overtime
Unpaid Interns
14
 Intern experience should be educational,
similar to college training
 Internship for benefit of intern
 Intern cannot displace regular employee
 No immediate advantage to employer
 Intern not entitled to job subsequently
 Both intern and employer agree in
advance that it is unpaid position
DOL Unpaid Intern Requirements
15
 If worker is incorrectly classified as a
consultant or independent contractor:
– Employer liable for required withholdings for
state and federal income tax, Social Security,
Medicare, unemployment insurance—
retroactive
– Matching FICA contributions to be made
– Unpaid minimum wage and OT risks
– May lose “exclusive remedy” protection of
workers compensation law
Independent Contractor Risks
16
 Does employer have the right to control
how the work is performed?
 Does employer merely contract for the
result, but leaves the “how” up to the
consultant?
 Is the consultant in business for herself?
– Have a business license?
– Business card or website?
– Potential for profit or loss?
Employee vs. Independent
Contractor
17
– Free to do same work for others?
– Full-time or part-time work?
– Long-term working relationship?
– Use her own equipment or tools?
Independent contractor? (cont.)
18
 Administrative and executive exemptions
 Must be paid a “salary,” not a wage:
– fixed amount per month, etc. regardless of
quality or quantity of work performed
 Case-by-case analysis based on actual
work performed, not job description
 Must be office, non-manual work directly
related to management or general
business operations
White Collar Exemptions
From Overtime
19
 Primary duty requires exercise of:
– Discretion and independent judgment
– On matters of significance:
• Compares and evaluates possible courses of
action and makes/recommends decision after
possibilities considered
• Authority to formulate/implement policies free from
immediate supervision
• Can commit employer in significant matters
• Can deviate from regular policies or procedures
• More than use of skill in applying standards
White Collar Exemptions (cont.)
20
 Employer must provide “a reasonable
break” for nursing mothers to express
breast milk as needed
 Applies only to non-exempt employees
 Covers first year after birth of child
 A space, other than bathroom, shielded
from view and free from intrusion
 Employers with less than 50 employees
exempt if imposes “undue hardship”
Break Time for Nursing Mothers
21
Thank You
 W. Mark Gavre
direct: 801.536.6834
email: mgavre@parsonsbehle.com

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Wage and Hour Disputes and Class Action Claims

  • 1. WAGE AND HOUR DISPUTES AND CLASS ACTION CLAIMS W. Mark Gavre Tuesday, May 6, 2014 The Little America Hotel 26th ANNUAL EMPLOYMENT LAW SEMINAR parsonsbehle.com4813-8465-0266
  • 2. 2  Unpaid overtime, unrecorded worktime, minimum wage, meal break time  DOL: Two years back pay for everyone affected  Private lawsuit: Three years back pay, amount automatically doubled, plus attorney fees and litigation costs  Class actions where common facts predominate Wage & Hour Claims Are Dangerous!
  • 3. 3  Incorrectly classifying non-exempt as exempt  Incorrectly classifying employees as independent contractors or consultants  Off-the-clock work  Deducting for meal breaks improperly  Not recording hours worked  Not paying minimum wage—see state law  Retaliation against complainers Areas of Risk
  • 4. 4  Multiple employees and former employees in one lawsuit—small amounts become big  Strict employer liability—no knowledge or bad intent needed for a violation  No defense to a violation—strict liability  Personal liability possible  Lawyers’ fees, expert fees and litigation costs recoverable  State laws can be more generous Costly Class Actions
  • 5. 5  Examples of recent 2014 settlements attached  Recent wage & hour DOL victories attached Class Actions
  • 6. 6  Utah labor Commission agreement with DOL—attached  DOL seeking $800,000+ in Utah -attached DOL Activity in Utah
  • 7. 7  Federal minimum wage: $7.25  21 States now have higher minimum wages—and are going higher – CA $8.00 now; $10.00 in 2016 (OT after 8 hours) – San Francisco $10.74 now – LA considering $15.37  WA $9.32; $15.00 likely in stages • Seattle airport $15.00 now Minimum Wage
  • 8. 8 – CT $8.70 now; $10.10 by 2017 – OR $9.10 – VT $8.73 – CO $8.00 – MT $7.90 – Santa Fe, NM $10.66  2014 new increases in minimum wage – HI $10.10 by 2018 (in steps) – MD $10.10 by 2018 Minimum Wage (cont.)
  • 9. 9 – MN $9.50 by 2016; indexed to inflation in 2018 – DE $8.25 by 2015 – W. Va. $8.75 by 2016 – Washington, D.C.: $8.25 now; $11.50 in 2016 and indexed to inflation Minimum Wage (cont.)
  • 10. 10  $7.25 with health benefits  $8.25 without health benefits (“living wage”)  Overtime after 8 hours if paid less than $10.875 with health benefits  Overtime after 8 hours if paid less than $12.375 without health benefits  Overtime after 40 hours if paid more Nevada Minimum Wage and OT
  • 11. 11  2/12/14 Pres. Obama issued executive order raising minimum wage for contractors and subcontractors on federal projects to $10.10  Effective 1/1/15; applies to new or renewed contracts  Starting 1/1/16 to be raised annually to reflect inflation New Minimum Wage for Federal Government contractors
  • 12. 12  3/13/14 Pres. Obama directed DOL to consider revisions to FLSA regulations to give more employees OT benefits  FLSA substance in the regs, not statute, and can be changed by DOL (1949, 2004)  Most exemptions from OT require only $455 weekly salary or $23,600 annually  Raise to $700, $1,000 or more?  Other changes possible Planned Revisions to FLSA Exemptions from Overtime
  • 13. 13  Since 2008 upsurge in college students working as unpaid interns to get experience and job opportunities  Class action lawsuits for interns as employees entitled to minimum wage and overtime Unpaid Interns
  • 14. 14  Intern experience should be educational, similar to college training  Internship for benefit of intern  Intern cannot displace regular employee  No immediate advantage to employer  Intern not entitled to job subsequently  Both intern and employer agree in advance that it is unpaid position DOL Unpaid Intern Requirements
  • 15. 15  If worker is incorrectly classified as a consultant or independent contractor: – Employer liable for required withholdings for state and federal income tax, Social Security, Medicare, unemployment insurance— retroactive – Matching FICA contributions to be made – Unpaid minimum wage and OT risks – May lose “exclusive remedy” protection of workers compensation law Independent Contractor Risks
  • 16. 16  Does employer have the right to control how the work is performed?  Does employer merely contract for the result, but leaves the “how” up to the consultant?  Is the consultant in business for herself? – Have a business license? – Business card or website? – Potential for profit or loss? Employee vs. Independent Contractor
  • 17. 17 – Free to do same work for others? – Full-time or part-time work? – Long-term working relationship? – Use her own equipment or tools? Independent contractor? (cont.)
  • 18. 18  Administrative and executive exemptions  Must be paid a “salary,” not a wage: – fixed amount per month, etc. regardless of quality or quantity of work performed  Case-by-case analysis based on actual work performed, not job description  Must be office, non-manual work directly related to management or general business operations White Collar Exemptions From Overtime
  • 19. 19  Primary duty requires exercise of: – Discretion and independent judgment – On matters of significance: • Compares and evaluates possible courses of action and makes/recommends decision after possibilities considered • Authority to formulate/implement policies free from immediate supervision • Can commit employer in significant matters • Can deviate from regular policies or procedures • More than use of skill in applying standards White Collar Exemptions (cont.)
  • 20. 20  Employer must provide “a reasonable break” for nursing mothers to express breast milk as needed  Applies only to non-exempt employees  Covers first year after birth of child  A space, other than bathroom, shielded from view and free from intrusion  Employers with less than 50 employees exempt if imposes “undue hardship” Break Time for Nursing Mothers
  • 21. 21 Thank You  W. Mark Gavre direct: 801.536.6834 email: mgavre@parsonsbehle.com