Kansas City Employment Lawyer Blog

The Labor Department is cracking down on employers who cheat their employees out of wages. In so doing, the Department is entering agreements whereby information will be shared between the Department, several states, and the Internal Revenue Service. The Labor Department's top attorney, Patricia Smith, has indicated that when state and federal agencies share information, businesses can then be assessed multiple fines. She explained, "There's more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased." So, for example, a company that in the past might have paid only a single fine to a state agency for improper unemployment insurance payments will now pay additional fines and penalties to the Labor Department and the IRS.

This information sharing targets specific illegal wage and hour practices that deprive employees of minimum wage and overtime pay as well as other benefits. These practices include misclassification of workers as exempt employees and improper labeling of employees as independent contractors. Such misclassifications result in the denial of employees' rights to workers' compensation benefits, unemployment insurance, overtime pay, and social security benefits. Additionally, employers engaging in independent contractor misclassification do not make proper deductions for federal taxes. So, the reporting of these violations by any state to the IRS allows the IRS to go after the company for unpaid taxes. The states cooperating with the Labor Department on these issues include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. The states of New York and Illinois are expected to follow suit in the near future.

Since taking office in 2009, Labor Secretary Hilda Solis, has made increased enforcement of federal wage-and-hour laws a top priority. The industries that are the focus of such "wage theft" by the Department include the hotel, restaurant, janitorial, health care and day care industries. Additionally, the Department has targeted homebuilders for failing to pay workers the minimum wage or overtime. The head of the Department's Wage and Hour Division, Nancy Leppink, recently stated, "The urgency of addressing this issue has become more pronounced because we're seeing these illegal business practices used by more and more industries, like restaurants."

The stepped up enforcement comes at a time when businesses are favoring the employment of independent contractors or freelancers in order to save money or avoid hiring staff in an uncertain economy. Figures and estimates from some government agencies indicate that 20 to 35 percent of all employers have classified people as independent contractors either mistakenly or intentionally, when they really should be classified as employees.

Notwithstanding the losses borne by misclassified employees, these illegal employment practices have broad implications for both business and government. For example, when an employer classifies an employee as a contractor, that employer maintains a competitive advantage since his or her total labor costs are lower. Richard A. Sebeck, program manager for the Maryland Department of Labor, Licensing and Regulation's Division of Labor and Industry explained, "It's bad for all honest businessmen." From a Government perspective, millions of dollars in payroll tax and other revenues are lost. For the worker, many benefits are lost, including Social Security, health care and unemployment insurance. Mr. Sebeck also added that when employees are misclassified as contractors and get hurt on the job, they are not entitled to workers' compensation.

It is very important that workers be properly classified as employees to prevent the employer from being potentially subject to thousands of dollars in fines and back wages. If a company's so called "independent contractors" are required to follow the company's specific instructions for completing tasks and are also required to clock in and out on a routine basis, it is likely that they are misclassified, and are, in the eyes of the law and the various enforcement agencies, employees.

Frank Vasquez, with Case & White law firm, states that, "The penalties for this misclassification [are] so severe that every employer is wise to consider it." If a complaint is filed by a contractor that is really an employee, the employer could be liable for any overtime wages owed, back payroll taxes, plus unemployment insurance. Mr. Vasquez suggests that if an employer wishes to utilize temporary workers, the employer should consider hiring them through arrangements with a temporary employment agency.

Just since 2009, upwards of $9 million in back wages for 15,000 workers have been collected by the Labor Department just in cases where misclassification of independent contractors was alleged.

Sources:

Labor Department Expands Enforcement of Wage Violations, Associated Press, by Sam Hananel, September 19, 2011

Working: U.S. and Local Governments Crack Down on Employers Who Pay Workers as Contractors, The Washington Post, Capital Business, by Vickie Elmer, October 9, 2011.

On September 15, 2011, a class action wide settlement was approved on behalf of workers at 41 Tyson poultry plants. More than 17,000 Tyson employees had participated in the lawsuit in which plaintiffs claim they had not been properly paid for putting on (donning) and taking off (doffing) required protective gear prior to and after the close of their daily shifts. These practices by Tyson, the lawsuit alleges, are in violation of the Fair Labor Standards Act (FLSA).

The settlement for $32 million dollars was approved by the US District Court in Georgia. The United Food and Commercial Workers International Union, not a party in this case, issued a press release stating that each current and former Tyson worker would receive a payment of approximately $1,000. The spokesman for Tyson, Gary Mickelson, reported that the terms of the settlement are such that public commentary is not allowed either from the company or the plaintiffs. Mr. Mickelson also stated that the matter was settled satisfactorily.

Around the same time that Tyson's competitor, Perdue Farms, Inc., reached an agreement with the Department of Labor (DOL) regarding pay practices for time spent donning and doffing, the DOL filed a similar suit against Tyson Foods Inc. in Alabama. The suit alleged that Tyson violated the FLSA and that back wages and liquidated damages should be paid to current and former employees. Additionally, the complaint sought an injunction restraining Tyson from future violations of the FLSA at all of its domestic poultry processing facilities.

In the agreement that the Department of Labor reached with Perdue Farms Inc. in 2002, the company decided to change current and future pay practices at all of its U.S. facilities to compensate workers for the time they must spend donning and doffing personal protective equipment (PPE). Under the Consent Judgment, Perdue Farms agreed to retroactively pay its processing employees on the production line an additional eight minutes each workday for time spent putting on and taking off certain clothing and equipment, as well as developing an initiative to record and pay employees for such activities going forward. The agreement was estimated at that time to be worth approximately $10 million for Perdue's current and past employees.

So, the gamble made by Tyson several years ago, with the decision not to pay for donning and doffing did not pay off, and now the company is paying $32 million to compensate employees for the time they spend putting on and taking off personal protective equipment (PPE), which are essential tasks in order to perform their job duties, according to a consent decree filed in U.S. District Court in Columbus, Ga. Workers sued the company, stating they were deprived of compensation for the time they spent putting on and taking off PPE, time they considered part of their job. Tyson settled a similar dispute last year with the Labor Department by agreeing to change its compensation policy.

Sources:
Tyson Pays $32 Million to Settle PPE Donning and Doffing Lawsuit, by Sandy Smith, EHS Today, September 20, 2011.

Perdue Farms Settles, Tyson Foods Fights Donning and Doffing Disputes, EHS Today, May 10, 2002.

Tyson Settles Donning, Doffing Case for $32M, Meatpoultry.com, September 20, 2011.

The New York Times published an editorial during the Labor Day weekend of 2010, written by former Labor Secretary, Robert Reich. The article addressed the issues this country continues to endure one year later. Specifically, Mr. Reich states that, "this dismal state of affairs is unlikely to improve until we address the deep structural flaws in our economy; flaws that have made it impossible for the American consumer - i.e. the middle class American worker - to sustain the level of spending needed to keep our economy going." The state of affairs includes the low population of organized labor relative to total private work force, high unemployment, and little hope for recovery.

Added to this dismal state of affairs is the fact that the U.S. poverty rate has now risen faster during the last 3 year period than any similar period since the early 1980's, a time when this country was suffering from an energy crisis, unemployment and out of control, spiraling interest rates. According to the census, there are 46 million now living in poverty, which is the largest number since the census started tracking poverty in 1959.

The average American worker's ability to consume continues to erode, as working wages have been on a steady downward trend during the past three decades. During this timeframe, we have seen major U.S. manufacturing firms invest in technology to reduce labor expenses and move manufacturing overseas in order to take advantage of a non-unionized, low wage labor pool. Mr. Reich goes on to predict that full employment, when calculated in conjunction with real income decline, would not be enough to provide the demand necessary for the products that the U.S. is capable of producing. He cites the structure of the economy as the real culprit, not the business cycle. The wealthiest 1% of our population in 1970 earned about 9 percent of the nation's total income, compared with 23.5 percent of the nation's total income by 2007. Reich theorizes that the rich spend much smaller portions of their income than the rest of the population, and so the economy loses much of the demand needed to continue to grow.

As Harry Truman once said, "There is nothing new in the world except the history you do not know." As we watch the U.S. poverty rate rise and as wages continue to stagnate, perhaps we need to stop and look back on our history of success. What structure really worked? What were the very basic building blocks that led to the financial strength of the United States?

The reform that was the New Deal provided the necessary tools for long term economic prosperity for both the American worker and the American economy. The New Deal was not just about relieving the unemployed with WPA projects. It introduced labor legislation in the form of The National Labor Relations Act, passed in 1935, which in turn, put into place the National Labor Relations Board, and along with it, the right to collective bargaining. Additionally, the Fair Labor Standards Act (FLSA) set a minimum wage and mandated the 40 hour work week, along with the right to overtime pay. All of these laws, in conjunction with financial reform and investment in education through the GI bill, led to a much larger and better paid middle class with access to post secondary educational opportunities.

On July 1, 2011, Janice M. Nittoli offered solutions in her op-ed piece in the New York Times. She realistically assumes that our government is unlikely to generate good paying jobs. Instead, Nittoli hones in on the jobs already financed with federal dollars and the fact that nearly one fourth of workers are employed by companies that have contracts with the federal government to supply goods and services. Many of these contractors violate wage and hour laws, so not only do workers not get paid properly, but they are likely to utilize government subsidies such as food stamps and Medicaid in order to survive. Employers should have to certify adherence to wage and hour laws or risk the loss of large, multimillion-dollar contracts.

Instead of arguing against jobs bills and solutions such as that offered by Nitolli, our Washington politicians should consider the ongoing expense of entitlements and low economic demand in the face of high unemployment and low wages. Why not diligently enforce the rules implemented with the FLSA, especially for employers providing jobs with Federal money, and improve the structure of the economy with an environment that entices manufacturing back to the United States, and once again build a strong middle class? The proven lessons of history should not have to be relearned at so great a cost to our society and its members.

Sources:

FDR and Labor: Earning Our Way Out of the Great Recession, Huffington Post, September 1, 2010

How to End the Great Recession, New York Times, September 2, 2010

Pay Workers Fairly and Save Money, NY Times, July 1, 2011

Income Slides to 1996 Levels, Wall Street Journal, September 13, 2011

In 1974 Congress added domestic workers to the Fair Labor Standards Act (FLSA), however, those employees that provided "companionship services" were exempted. At that time, the business of providing home care was barely a cottage industry with companions described as "elder-sitters."

Fast forward to present day. In the 37 years since the 1974 change to the FLSA with respect to domestic workers when the companionship exemption was enacted, the home health care industry has grown exponentially. With the baby boomer generation sandwiched between caring for children and aging parents and making a living, the services provided by these agencies are high in demand. It is also these types of services that extend the possibilities for elders to have the freedom to stay in their own homes and remain independent, thus postponing the expensive alternative of an assisted care or skilled nursing facility.

These home health workers provide a very valuable service, that if performed in an assisted living facility or nursing home would be covered by the minimum wage and overtime provisions of the FLSA. As it is, these home health workers are some of the lowest paid jobs. Additionally, due to the nature of the work and its physical demands, these workers are more prone to injury and are generally not covered by health insurance. The turnover rate is very high, thus making the consistency and quality of care unstable. Most importantly, because they are not covered by the FLSA, their employers are not required to pay them a minimum wage or overtime pay for all hours worked in excess of 40 in a work week.

A bill has recently been introduced by Rep. Linda Sanchez (D-CA) and Sen. Robert P. Casey, Jr. (D-PA) on June 23, 2011. The Direct Care Job Quality Improvement Act [S. 1273/H.R. 2341] promises to provide the framework to allow for higher valued home care workforce.

This bill should be considered in the long run as a vehicle that could provide government savings. It is estimated that more than 75% of long-term care is financed by federal programs. If the value of these home health care jobs were protected and promoted by FLSA rights, the quality of home health care would increase due to a more stable and trained workforce, which would, in turn, provide savings to our health care system by postponing the use of nursing homes and decreasing hospitalizations. In addition to minimum wage and overtime provisions, the proposed bill would implement data collection and reporting requirements and provide for grants to states in support of recruitment, training and supply of these workers.

On the other side of the issue Paul Hogan, who is chairman of Home Instead, a very large company that employs more than 65,000 caregivers in the United States, is seeking a Congressional sponsor for another bill. This competing bill would enforce the companionship exemption in the FLSA and would go another step further by preventing any future administration from changing the rules. "We're asking that the decision-making be removed from the Department of Labor," Mr. Hogan said.

Sources:
A Fair Wage for Home Care Workers, NYTimes.com, July 20, 2011.

Fair Pay for Quality Care, Direct Care Alliance, Inc.

The Fair Labor Standards Act or "FLSA" is a federal statute, enacted by congress that protects many workers' rights to fair pay. Under the FLSA, covered employees have minimum wage protections as well as rights to receive overtime compensation for hours worked over 40 in a workweek. The act, originated during the Great Depression, was passed in 1938, and has protected workers' rights to fair pay for over 70 years. Republican lawmakers are now indicating a willingness to reform the FLSA, this evidenced by a Congressional hearing held mid-July.

The hearing was called by Rep. Tim Walberg (R-Mich.), the chair of the House education and workforce committee, in order to discuss the FLSA, relative to today's work force and business environment. Specifically, the purpose was to investigate if the FLSA is "meeting the needs of the 21st century." Two business executives and a lawyer testified and said, "The statute has become too onerous for contemporary employers, leading to an explosion of costly lawsuits brought by workers."

Walberg said, "The law was a significant expansion of the government's authority when it was created in the midst of the Great Depression. Good intentions can often lead to unintended consequences. It is hard to imagine a law intended for the workforce known to Henry Ford can serve the needs of a workplace shaped by the innovations of Bill Gates."

At the time of Henry Ford, the assembly line was a huge innovation in the manufacture of automobiles, just as Bill Gates' Microsoft continues to lead innovation today. So, are workers any less deserving of fair pay for a fair day's work today than they were during the Great Depression? Are workers today less deserving of rightful protection under the law? Are today's workers less deserving of overtime pay for all hours worked over 40 in a work week?

Henry Ford said himself, "Where people work longest and with least leisure, they buy the fewest goods. No towns were so poor as those of England where the people, from children up, worked fifteen and sixteen hours a day. They were poor because these overworked people soon wore out -- they became less and less valuable as workers. Therefore, they earned less and less and could buy less and less." Ford also said, "There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." Henry Ford wanted to assure that any man working on his assembly line could afford to buy one of his automobiles.

The major topic of Walberg's hearing was with regard to exempt vs. non-exempt employees and how these categories of employment relate to employees' protection under the FLSA. Non-exempt employees are protected by the law's provisions, that provides for federal minimum wage plus overtime pay for any hours worked in excess of 40 in a week. Exempt employees that are predominantly white-collar workers and paid on a salary basis, are not protected by the law and can be worked overtime without being paid for it. The issue involves the definitions for exempt and non-exempt.

Republican witnesses at the hearing used large, million dollar law suit settlements as evidence that employees and their attorneys exploit the FLSA. This is because non-exempt employees that think they have been cheated out of pay can sue an employer.

A senior vice president at IBM, J. Randall McDonald said "Our ability to use technology has dramatically changed the workplace". His opinion is that the FLSA statute needs to be amended so that some workers now covered by the law would no longer be able to rely on its protections.

Again, Henry Ford's assembly line dramatically changed the workplace. Just because a worker slaves over a computer instead of an assembly line, that worker is not less deserving of protection under the law.

Aaron Albright, who was the spokesman for the Democrats, commented that Republicans would like to "roll back" the FLSA so that fewer workers are covered by its provisions. He feels the Republican goal is to diminish the number of workers that are eligible for overtime or the minimum wage. He said, "What's the purpose for the tinkering? It's basically to reclassify workers so they're not eligible for overtime or minimum wage."

Rep. Dennis Kucinich (D-Ohio) asked all the witnesses if the federal minimum wage (7.25) should be raised, lowered or kept the same.

J. Randall McDonald said he did not understand the question and the other two Republicans dodged the question altogether.

Does this exchange tell us anything about the Republican intent toward the Fair Labor Standards Act?

Source:
Minimum Wage, Overtime Laws Due For Reform: Republicans, Huffington Post, Dave Jamieson, July 14, 2011

In 2006, a federal appeals court whose decisions are binding precedent for the United States District Court of Kansas (as well as lower federal courts in several other States) examined whether oil riggers were entitled to be paid overtime for certain travel time under the Fair Labor Standards Act (FLSA). In that case, the Tenth Circuit Court of Appeals sided with the employer. Nonetheless, the Court's reasoning could provide a basis for FLSA overtime claims for many other employees.

The Court held that the oil riggers in question were not entitled to have certain travel time included as "compensable time" for purposes of overtime rights because the traveling amounted to preliminary "commute time" rather than "work time." Nonetheless, the court relied on prior decisions to establish a framework to distinguish between "commute time" and "work time." Specifically, the court explained that if an employee is hauling equipment that is indispensible to the work to be performed, the travel time is not merely commute time, but rather is compensable work time. On the other hand, where the "equipment" being transported is nominal or incidental, the travel time remains non-compensable commute time, unless other factors would lead to a contrary result. The case law and regulations provide some examples to draw this distinction. For example, where a construction worker transports a hard hat, earplugs and steel-toed shoes, or where a repair person transports "ordinary hand tools," the travel time, unless other factors lead to a contrary result, is not compensable. By contrast, where a logger transports a portable power saw to the woods for tree cutting, or an oil rigger transports 109 gallon tanks of butane gas 30 miles in a pickup truck to the rigging site, such travel time is compensable.

Many installation and repair technicians transport equipment far more substantial than "ordinary hand tools" or a hard hat, earplugs and steel-toed shoes, such as computer-related electronic equipment, HVAC equipment, plumbing equipment, etc. As a general proposition, the more substantial the equipment, and the more unique the equipment is for the task at hand, such as installing such equipment at the job site, the more likely the transportation time will be found to be compensable for purposes of the employee's overtime rights.

Unpaid wages and overtime are sought by employees at a Kansas slaughterhouse, Creekstone Farms Premium Beef. The federal lawsuit seeks class-action status for the 700 individuals employed by the Arkansas City plant.

Workers at the plant are seeking monies for uncompensated work and time as well as the legal costs associated with bringing this action. The lawsuit filed in U.S. District Court, claiming unpaid wages for all time worked, names Paz Sanchez and Elvis Posadas as the representative plaintiffs and will endeavor to include any individuals who worked at the plant in the past three years.

Allegedly, Creekstone Farms pays hourly meat processing employees "based on a principle of so-called gang time." The suit contends that workers are paid only for the time that their assigned production lines are running, along with 10 minutes a day to put on their protective clothing. Additionally, the suit also charges that the company failed to pay for overtime.

"The failure of an employer of food processing employees to pay the employees for all their compensable time is a common occurrence," said Mark Kistler, the Overland Park attorney representing the workers. "It seems the employers have an attitude of 'catch me if you can.'"

Source:
Workers file wage lawsuirt against Creekstone Farms, Business Week, April 7, 2011

On March 28, 2011, Judge Barbara S. Jones, a Federal judge of the U.S. District Court for the Southern District of New York, preliminarily approved a $2 million class and collective action settlement for Creighton v. Oppenheimer & Co. Inc. et al. A hearing is scheduled for September 7, 2011 to determine fairness and good faith of the settlement based on class and collective action procedures and requirements and to enter judgment.

The class action lawsuit was filed in May of 2006 by Leon Greenberg along with Mark Thierman, Blumenthal & Markham and United Employees Law Group. The suit alleges that the Oppenheimer brokerage firm violated the Fair Labor Standards ACT (FLSA) by misclassifying stock brokers as exempt from overtime pay.

Brokers allege that their pay is based on sales commissions and that they are not paid a guaranteed salary. Oftentimes they work greater than 40 hours per week, for which they should be paid overtime.

Sources:
Oppenheimer To Settle Stockbrokers' OT Suit For $2M, Law360, March 29, 2011

Lawsuit against Oppenheimer alleges Stock Brokers may be entitled to Overtime Pay, LawyersandSettlements.com, May 29, 2006

A lot of workers (and their employers) are confused about whether or not an employee must be paid for their "on call" time. In the days of iPhones and Blackberries employees can be reached almost anywhere, anytime. Many workers believe that if they can be called into work, they should be paid for that time and even be eligible for overtime. However, usually, "on call" time is not usually compensable if your employer is following a few rules.

First thing's first, if you are on your employer's property and cannot leave because you are "on call", you should be paid for that time. Even though you may be watching TV, reading a book or talking on the phone, if you are "on call" (meaning you must begin work as soon as you are notified) and you are on your employer's property, you should be paid for all of your time.

If you are off duty, meaning you are at home or at another location, which you are free to come and go but still "on call" your time is generally not compensable. However, for this time to not be compensable, your employer must follow three rules. First, you must be fully compensated for your regular "on duty" shifts. Second, you must be paid for your actual time responding to calls (meaning, if you are sent an email or take a phone call, you must be paid for that time, even if you didn't have to go into work). Finally, except for having to respond to calls, you are free to use your "on call" time to eat, sleep or pursue any normal range of activities as if you were not on call.

Next time you have an "on call" shift, make sure you think about whether your time is really your own, and if you are being compensated for each phone call and email that you are required to respond to. If you aren't being fully compensated, you likely have a claim for unpaid wages.

"Tipped employees," such as restaurant servers and bartenders, are often paid a minimum wage of only $2.13 by their employer. The federal minimum wage is $7.25 an hour, but allows for a "tip credit" of up to $5.12 an hour for a tipped employee. As long as the tipped employee receives at least $7.25 an hour in combined wages and tips during the pay period, such an arrangement is generally lawful. But "generally" is a tricky word when it comes to the law and tipped employees. If fact, there are several exceptions to the general rule, and when any of those exceptions apply, employers frequently violate their employees' rights. Here are some common violations of the rights of tipped employees.

First, only employees who directly serve the public are allowed to be paid the lower tipped minimum wage. Thus, dish washers and cooks, for example, must be paid the full minimum wage from their employer. Also, only employees who directly serve the public may be included in a "tip pool." A tip pool is where tips received during a shift are pooled and then distributed to employees on a pro rata or some other basis. Paying out part of a tip pool to employees who don't directly serve the public nullifies the employer's right to the tip credit, entitling all employees participating in the tip pool to be paid $7.25 per hour by their employer. For example, some employers unlawfully include "expediters" in their tip pools. An expediter typically inspects plates of food just before they are delivered to customers to make sure that orders are filled correctly and presented in an appetizing way. Such expediters don't directly serve the public, and cannot lawfully be included in a tip pool.

Second, some states have a higher minimum wage for tipped employees than federal law. In Missouri, for example, an employer must pay tipped employees at least $3.63 an hour, $1.50 more than the federal requirement.

Continue reading "Real Tips for Tipped Employees " »

With the advent of electronic time clocks, employers have been able to track the hours employees work with greater accuracy and efficiency. However, the use of electronic time clocks and computers have also made it easier than ever for employers to monitor and sometimes modify when employees clock in and out.

It's a little known fact, but the law allows employers to round employees' hours just as long as it doesn't result in the loss of money to the employee. An employer can round to the nearest five, ten or even fifteen minute increment at the beginning or end of an employee's shift. However, it is illegal for the employer to round so that it is always in the employer's favor. So rounding forward at the beginning of a shift and backwards at the end of a shift would not be allowed.

For example, let's assume the employer wants to round to the nearest five minutes. If an employee's shift begins at 9:00 and the employee clocks in at 8:56, the employer can automatically round that employee's time to 9:00. However, if the employee clocks out at 5:03, the employer must round the employee's time to 5:05, the nearest five minutes. If the employee's time is rounded to 5:00, the rounding would be in the employer's favor and is likely illegal.

The theory behind rounding is that over long periods of time the rounding sometimes favors the employer and sometimes favors the employee. It is generally thought that the rounding will average out and neither the employer nor the employee will gain any advantage.

However, rounding becomes tricky because the only way that it is legal for an employer to round an employee's time is to ensure that the time clock rounding is done in an equal and fair way. Unfortunately, many employers get this wrong and employees are left with losing money on their paychecks.

Hospitals, nursing homes and other health care providers often do not pay employees overtime under the "8 and 80" rule that can apply to health care employees. Some health care employers, however, apply the "8 and 80" when it is unlawful to do so. The result is that affected employees are entitled to back pay for the unpaid overtime premium.

Federal wage and hour laws generally require an employer to pay an overtime premium to an employee for work in excess of 40 during a workweek. There is, however, an "8 and 80" exception that can apply in very limited circumstances to certain health care employees. If all of the requirements of the "8 and 80" rule are satisfied, an employer can pay an employee straight time for 80 hours worked during a two-week period, even if the employee worked more than 40 hours during one of the two weeks. Absent the "8 and 80" rule, the general rule would apply so that the employee would be entitled to time and a half for hours worked in excess of 40 during any workweek.

The "8 and 80" rule, however, applies strictly under specific conditions. First, only certain health care providers, such as hospitals and other in-patient facilities, are allowed to use it. Second, the employer must expressly inform the employee that the employer will use the "8 and 80" method of pay, and the employer must utilize it consistently, not just during weeks the employer can comply with its strict requirements. Third, the "8 and 80" rule only applies to 8 hour work shifts and to 80 hours during a two-week period. Thus, if the employee works any 12 hour shifts, or double-shifts of 16 hours during any day of the workweek, the "8 and 80" exception to overtime does not apply, and the employee is entitled to time and half for all hours over 40 during that workweek. Also, even if the "8 and 80" rule applies, the employee is entitled to the time and half overtime premium for all hours in excess of 80 during the two-week period.

Investigations of pay practices in the health care industry are ongoing across the nation. Many lawsuits have hit hospitals, nursing homes, and other health care providers concerning unlawful pay practices. Most of those lawsuits involve automatic payroll deductions for meal breaks, even though the breaks were often interrupted or not taken at all.

Two lawsuits have resulted in back pay for nurses and other patient-directed employees from health care providers who failed to pay them for interrupted and missed rest breaks. The Washington State Nurses Association (WSNA) has filed lawsuits against four hospitals for failing to provide nurses with adequate breaks. According to the WSNA, the two successful lawsuits demonstrate the legal principle that in order to be a bona fide unpaid break, "a nurse's rest break must be uninterrupted time away from work duties, not a series of small, intermittent breaks which consist of brief interruptions[.]"

Research has shown that many health care employers are not in compliance with federal wage-and-hour laws. Such investigations have included various health care facilities, including hospitals, nursing homes, assisted-living facilities, and group homes for the disabled. Recent federal investigations resulted in findings that many health care providers are not paying proper overtime to employees working more than 40 hours in a work week. Those findings have resulted in further investigations and lawsuits delving into pay practices throughout the health care industry, resulting in hospitals, nursing homes and other health care providers around the country paying millions of dollars to settle claims for back wages to employees. Typical violations of employees' rights include failure to pay hourly employees for work before or after scheduled shifts and failure to include interrupted and missed breaks as time worked.

Federal Labor Department regulations do not require pay for "bona fide" meal periods. Those regulations, however, state that an employee must be completely relieved from work during the meal period for it to be considered a "bond fide" unpaid break. Payroll systems utilized by many hospitals and other health care providers automatically deduct a 30 minute break from each employee's shift, regardless of whether the break was interrupted by job duties and was therefore not "bona fide" as defined by law.

Federal Labor Department regulations also provide that for purposes of overtime, employers generally must include time spent by hourly employees at meetings to discuss work-related issues in such employees' work time.

Sources:
Washington Hospitals Sued, Scrubs, Oct 22, 2010

Pay Practices in Health Care are Investigated, The New York Times, August 9, 2010

Chinese Daily News (CDN), a California-based Chinese-language newspaper has lost its appeal in front of the 9th Circuit Court of Appeals. The Court of Appeals affirmed the trial court's rulings, and found that CDN had violated federal and state laws regarding overtime pay and lunch and meal breaks.

Plaintiffs originally sued CDN for wage violations. The company had alleged that the employees, who were current and former reporters for CDN, were exempt pursuant to the "creative professional exemption." Both the trial court and the appellate court disagreed. Under the "creative professional exemption," reporters may be exempt if their work requires interpretation or analysis. However, reporters who do not engage in such endeavors will not generally be exempt employees.

Specifically, the Court found that "CDN's articles do not have the sophistication of the national-level papers at which one might expect to find the small minority of journalists who are exempt," the panel said. "The intense pace at which CDN's reporters work precludes them from engaging in sophisticated analysis."

In many circumstances reporters will be eligible to receive overtime pay for hours worked over 40 in a workweek.

Source:
Newspaper loses 9th Circuit appeal in overtime, lunch break dispute, Westlaw News & Insight, November 2, 2010

Putting on and taking off safety gear, better known as donning and doffing, can take a significant amount of time and workers are often not compensated for these activities even though they are required by their employer. Donning and doffing lawsuits are filed on behalf of many types of employees including factory, slaughterhouse and manufacturing workers.

Donning and doffing lawsuits are often filed in federal court under the Fair Labor Standards Act, better known as the FLSA. State law claims can also be filed on behalf of workers who are not compensated to don and doff safety gear and equipment, sometimes with laws more favorable to workers than their federal counterparts.

A lawsuit filed in Wisconsin recently held that state law claims would survive without bringing an FLSA claim:

A Wisconsin statute requires that time spent donning and doffing safety gear is to be compensated at the minimum wage or higher; this time is to be counted towards the 40-hour workweek before the overtime rate applies. Under Section 218(a) of the FLSA, states are free to set higher hourly wages, or shorter periods, before overtime pay comes due. Thus, if Wisconsin had provided for a minimum hourly wage exceeding the rate in the bargaining agreement, then state law would trump the CBA. The appeals court rejected Kraft's assertion that Wisconsin was meddling with collective bargaining. Nothing in the Wisconsin statutes gave a state court or state official any role in interpreting or enforcing the CBA. What Wisconsin requires is that the CBA be ignored to the extent that it sets lower wages or hours than state law specifies. Thus, the district court did not err in concluding that the employees were entitled to be paid for all working time required under Wisconsin law. (Spoerle v Kraft Foods Global, Inc, 7thCir, 160 LC ¶35,792.)

Source:
FLSA did not preempt state law in Kraft donning, doffing case, CCH Aspen Publishers Technical Answers Group, September 9, 2010