Wage and Hour Disputes and Class Action Claims

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

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 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!

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 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

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 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

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 Examples of recent 2014 settlements
attached
 Recent wage & hour DOL victories
attached
Class Actions

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 Utah labor Commission agreement with
DOL—attached
 DOL seeking $800,000+ in Utah -attached
DOL Activity in Utah

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 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

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– 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.)

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– 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.)

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 $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

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 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

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 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

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 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

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 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

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 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

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 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

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– 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.)

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 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

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 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.)

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 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

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Thank You
 W. Mark Gavre
direct: 801.536.6834
email: mgavre@parsonsbehle.com

Wage and Hour Disputes and Class Action Claims

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