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Overtime Issues

Employers Face Numerous Issues With Overtime Claims

Overtime Exemption schemes are numerous.  Employers use various tactics to try and deny their workers fair compensation.  Some of them are discussed below. However, the laws are continually changing, and legal representation as to these issues is mandatory.

Courts Sometimes Narrowly Construe Exemptions

Any FLSA exemptions, such as the Motor Carrier Act and 49 U.S.C. § 31502, must “be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.” The burden of proving an exception rests upon the employer.  The party asserting an exemption, usually the employer, bears the burden of showing the applicability of the exemption, and that the employer is “clearly and unmistakably within the spirit and the letter of [the exemption’s] terms.”

Overtime Issues are Numerous and Complex

The following is a list of some overtime issues, but the law is constantly changing and a lawyer should be consulted in all situations:

  • Making less than $23,660 per year: The new overtime law mandates that if you earn less than $23,660 per year (or $455 per week), you are entitled to overtime even if you are on salary. As such, assistant managers at fast food or retail stores are often entitled to overtime.
  • Misclassifying employees: Employers avoid paying overtime due to their employees by inappropriately classifying them as “exempt” from overtime pay. Employers will refer to employees as “managers” or “assistant managers” but require them to perform tasks that are not considered “managerial.” These persons must be paid overtime, despite their title.
  • Uncompensated breaks or lunches: Rest periods of short duration such as 20 minutes or less must be counted as hours worked. Also, if an employee is required to clock out for lunch but that employee is not completely free from her duties during lunch, the employer must pay the employee for that time. A common example is a delivery driver who eats lunch while making deliveries is still working.
  • Adding workweeks: Overtime must be paid if, during any week, the employee’s hours exceed 40 hours. An employee who works 30 hours one week, and 50 hours the next week, must be paid 10 hours of overtime.
  • “Off-the-Clock” or take-home work: Employers who require their employees to perform any tasks before clocking in or after the employee clocks out are liable for those additional hours worked. Sometimes, employees are required to begin working (such as setting up, roll call, time putting on or removing protective gear, etc.) but don’t clock in until later. Another example is a fast-food worker who voluntarily continues to work at the end of the shift to finish cleaning.
  • Unpaid Final Paycheck: Employers often terminate someone and then fail to give them their final paycheck. Normally, workers must receive their final paycheck of at least their minimum wages. Because the federal minimum wage is $5.15/hour, an employer violates federal law by failing to pay less than the minimum wage.
  • Improperly treated as an independent contractor: Employees that are largely controlled by the company are not independent contractors and must be paid overtime.
  • Tips: Employers are not permitted to require their employees to share their tips with managers, dishwashers, cooks, chefs or others who are not entitled to share in tips. This is improper usage of what’s referred to as a “tip credit”, and violates the FLSA.
  • Bonuses: Employees paid bonuses or something “extra” are entitled to have these bonuses, shift differential, commissions and/or other incentive pay included in the calculation of overtime pay. Most employers fail to abide by this requirement.
  • Requiring pre-approval for overtime: Denying employees overtime pay when the overtime is not approved by management often results in unfair treatment. If an employer knows or should know of an employee’s overtime work, it must be paid.
  • Being “on call” or waiting time: Requiring the attendance of work-related meetings and/or training sessions but do not paying for those hours is also a violation. This includes employees that are “on call”, spent time traveling or who are not paid for time waiting (such as a secretary who is not paid while waiting for a client).
  • Improper timekeeping: Some employers purposefully change their employee’s time, or use sloppy methods for recording the time. For example, using methods that automatically deduct lunch periods or automatically end the time at a certain period is often improper.

Fluctuating Workweek

Employers often may employe the “Fluctuating Workweek.” This method of payment typically applies to employees whose hours fluctuate constantly. For example, firefighters, emergency medical workers, and county club employees that work longer hours in the summer and shorter during the winter. When applying this method, courts typically include bonuses in the overtime calculation.  Also, the mathematical formula typically does not include non-productive time or PTO/holiday hours.  These and other issues can void the election to use the fluctuating workweek.

Defenses to an Overtime Complaint

There are numerous viable defenses to a Plaintiff/Employee’s overtime complaint. Some of the most common pled, including some exemptions, are:

  • Plaintiff’s claims are barred in part by the provisions of Section 11 of the Portal-to-Portal Act, 29 U.S.C. § 260, because any acts or omissions giving rise to this action were done in good faith and with reasonable grounds for believing that the acts or omissions were not a violation of the FLSA.
  • The claims are barred in whole or in part by the provisions of Section 10 of the Portal-to-Portal Act, 29 U.S.C. § 259, to the extent actions taken in connection with Plaintiff’s compensation were done in good faith in conformity with and reliance upon written administrative regulations, orders, rulings, approvals, interpretations, and written and unwritten administrative practices or enforcement policies of the Administrator of the Wage and Hour Division of the United States Department of Labor.
  • Overtimes claims are often barred in whole or in part by the doctrine of de minimis non curat lex.
  • The employee’s claims are barred in whole or in part by the doctrines of estoppel and unclean hands to the extent that Plaintiff’s own conduct resulted in him not being compensated in accordance with the Florida Minimum Wage Act or the Fair Labor Standards Act.
  • To the extent that Plaintiff has suffered a loss of wages, Defendant is entitled to offset any unpaid wages with other wages, compensation or benefits paid to Plaintiff. See, e.g., 29 C.F.R. § 785.19.
  • Plaintiff’s minimum wage and/or overtime claims are denied to the extent they fall within an applicable exemption, including but not limited to, the executive, administrative or fluctuating workweek exemptions.
  • Defendant at all times acted in good faith to comply with the FLSA and with reasonable grounds to believe that its actions did not violate any federal law cited in the Complaint. Defendant asserts a lack of willfulness or intent to violate federal law as a defense to any claim by Plaintiff for liquidated damages.
  • To the extent Plaintiff claims he had no understanding of the payment method, the claims fail as he cannot satisfy his burden of proving that he had no clear and mutual understanding with his employer concerning the salary plus overtime system under which he was paid during the relevant time frame. Moreover, he cannot satisfy his burden of proving that his hours of work did not fluctuate. Finally, he and cannot satisfy his burden of proving that he was not properly paid under the fluctuating workweek system.

Contact Our Overtime Defense Lawyers

Contact Massey & Duffy, PLLC, today if you or someone you know might need a defense to an overtime action. We are uniquely situated to help both employers and their owners defend such claims. We have vast experience in both brining and defending them.

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