01/16/14

A Good New York Times Op-Ed on Overtime Laws

On Friday January 10, 2014 The New York Times published an op ed by Ross Eisenbrey of the Economic Policy Institute. The op ed suggested a reform that President Obama could enact through executive action.

Currently under the Fair Labor Standards Act regulations most exemptions only require that a “salaried” employee be paid at least $455 a week to qualify for the exemption. Normally an employee who works more than 40 hours in a week must be paid 1.5 times their hourly rate for each hour of forty in that week. Under the current regulations a salaried employee who meets certain duties tests can make as little as $22,000 a year and be exempt from overtime pay. The article points out that the $455 figure is only $2 a week more than the poverty level income for a family of four.

Mr. Eisenbrey proposes that the raised to $970 a week. This is about $46,500 before taxes. He takes the $970 figure based on the ratio to minimum wage when the Ford Administration raised the threshold. At that time the threshold was 1.6 times minimum wage. 1.6 times the minimum wage is a little more than $1000 a week, so Eisenbrey is calling for an amount on the low side of what was previously the case.

Raising the threshold will effectively make more workers eligible for overtime pay. Making more workers eligible for overtime will have a number of benefits. One important benefit of raising the threshold is that more workers will be paid overtime. Another benefit Eisenbrey identifies is that more overtime eligible workers will mean that employers will hire additional workers to perform work rather than pay the more expensive overtime rate of time and a half. Encouraging the sharing of hours among more workers was one of the goals of the Fair Labor Standards Act.

Classifying low level employees as exempt for overtime purposes is all too common. There are lots of assistant “managers” out there making little more than $455 a week while working crazy hours. Increasing the legal threshold for exempt salaried employees will help people working these low pay, high hours jobs and potentially help decrease unemployment. The best part is there is no need to worry about dealing with a hostile congress.

01/4/14

5 New Year’s Resolutions For Independent Contractors (Who May Have Been Misclassified).

Last year I posted a list of New Year’s resolutions for the workplace. This year I decided to provide New Year’s resolutions for independent contractors who think they may have been improperly classified and as a result lost out on pay and benefits they would have otherwise received.

1. What ever the business may do in regards to keeping track of my hours I will make sure I keep my own log of the hours I worked.

If there is an issue with classification and it turns out you are owed unpaid overtime, then you need to have an idea of how many hours you have worked. If the company does not keep accurate records then the court will take the worker’s reasonable good faith estimate. Keep records so it is easy for you to make that estimate.

2. I will make sure I keep any correspondence between myself and the business. This is especially important if the company sends the correspondence to somewhere they control (i.e. a company email account).

Whether a worker is an employee or an independent contractor commonly rests on how much control the company had over the worker’s work. Emails directing you to be somewhere at a certain time or do a task in a certain way can help to show that the company exercised control over your work. If the emails go to a company controlled email account then you may find your access to those messages will be restricted or ended as soon as you are terminated.

3. I will keep records of any deductions that the company took from my pay for any reason.  

Companies that employ independent contractors may make the contractor pay for things that they would typically provide for an employee or cover for an employee. For example, truck drivers  may be asked to pay for maintenance on trucks they don’t own. These deductions may be illegal under state and federal law if you are later classified as an employee. Having possession of the records makes it easier to bring a case in the first place.

4. I will always keep a copy of the contractor agreement that I signed.

Too many people don’t have a copy of the contract that sets out their relationship with the company. It is maybe the most important document for an independent contractor/business relationship. The contract sets out your rights and responsibilities and may be very important when deciding whether you are an employee or an independent contractor. Don’t let the company keep possession of the only copy of the contract and don’t sign the contract before they give you a copy. This is true for any agreement that you sign with a business or employer.

5. I will contact my federal Representative and Senator and ask them to support the Payroll Fraud Protection Act of 2013 (S. 1687).

As I mentioned not too long ago, Senators Bob Casey (D-PA), Tom Harkin (D-IA), and Sherrod Brown (D-OH) introduced the Payroll Fraud Protection Act of 2013 on 11/12/13. This bill helps workers who have been improperly classified as an independent contractor by  requiring double damages when the employer misclassifies the employee as an independent contractor and then fails to pay overtime and/or minimum wage. The bill also introduces an anti-retaliation provision that protects independent contractors who voice concerns about their classification. This bill is needed because improper classification is rampant in many industries. However the protections for workers and penalties for businesses who violate the law have not kept up with the changing employment landscape.

Bonus Resolution: I will become familiar with the tests that courts and agencies use to determine whether a worker is properly classified as an independent contractor or employee.

State courts, federal courts, and different agencies will use different tests or factors to determine whether a worker has been properly classified. Information can be found at various state Department of Labor websites. For instance, in Georgia go to www.dol.state.ga.us. Information about the tests used in federal court can be found at the federal Department of Labor website or at the IRS website.

 

 

These are just a few suggestions. This is not legal advice and is not intended to create an attorney client relationship between the reader and Attorney Kandy. In Georgia contact Attorney Benjamin Kandy if you are concerned that you may have been improperly classified as an independent contractor.
12/16/13

Good NY Times Op-Ed about Misclassified Independent Contractors

As a follow up to my recent post about S. 1687, Payroll Fraud Protection Act of 2013, I saw this good op-ed in the New York Times. The author, a historian, makes a good case for passing the bill right now. The author also makes an interesting suggestion for another change to federal law that could help protect America’s workers. She suggests that the right to bargain collectively should be guaranteed by adding it to Title VII of the Civil Rights Act of 1964. This would mean that employees who take action to come together and bargain collectively with their employer would be protected from discrimination or retaliation because of their actions on behalf of themselves and their fellow workers. Check out the op-ed here

12/8/13

Truck Drivers are Commonly Misclassified as Independent Contractors

Owners of logistic and trucking companies have sometimes played fast and loose with the independent contractor/employee distinction by classifying their employee drivers as independent contractors. By misclassifying their drivers as independent contractors instead of employees the companies can avoid paying taxes, state benefits like workers compensation and unemployment insurance, not follow laws like the Fair Labor Standards Act and the Family Medical Leave Act, and make otherwise improper deductions from the drivers’ paychecks. This last advantage is maybe the most important for the companies.

Some trucking companies force their drivers to pay all kinds of expenses and fees. The deductions can be for necessities like tires, gas, and maintenance even when the driver doesn’t own the truck to penalties for accidents and government fines. Misclassifying employees as independent contractors allow the companies to push the hassles and costs of being an owner to the drivers while retaining the upside for themselves. These deductions can push a driver’s effective hourly rate to well below the federal minimum wage of $7.25 an hour.  While interstate truck drivers may be exempt from the overtime requirements of the Fair Labor Standards Act, the exemption does not allow the companies to pay their drivers less than minimum wage.

The Fair Labor Standards Act regulates what an employer can deduct from the employee’s paycheck for and how much they can deduct from the paycheck. The general rule is that an employer can not make a deduction that causes the employee’s paycheck to go below the minimum wage. Making deductions for fuel, repairs, etc. that cause the driver’s pay below minimum wage means could be a violation of the Fair Labor Standards Act. In most states the minimum wage is calculated based on a work week (i.e. divide the pay for the week by the numbers of hours worked that week and the rate needs to be above the minimum). Some states have higher minimum wages than the federal rate and some states like calculate minimum wage on a day by day basis (i.e divide the pay for the day by the number of hours worked that day and the amount has to be above the minimum wage).

The companies argue that the drivers are independent contractors and not employees so the Fair Labor Standards Act does not apply. As discussed in previous articles determining whether a worker is an employee or independent contractor is fact intensive. When a driver doesn’t own the truck classification as an independent contractor is especially circumspect. There have been a number of recent court decisions that found drivers had been improperly classified as independent contractors instead of employees. For instance a court in California ruled drivers at the Port of Long Beach had been improperly classified as independent contractors. State legislatures are also working to tackle the problem of driver misclassification. New Jersey Governor Chris Christie recently vetoed a state bill that would have made it so drivers are presumed to be employees unless the company can prove otherwise.

If you are a truck driver who DOESN’T own their own truck, but is treated as an independent contractor, then you may have been misclassified and you may have been paid improperly. It is important to speak with an attorney on your jurisdiction. In Georgia contact attorney Benjamin Kandy.

11/20/13

Misclassified Independent Contractors – New Senate Bill Aims to Prevent the all too Common Practice

As I  discussed earlier, the misclassification of employees as independent contractors is all too common. The practice of improperly classifying employees as independent contractors costs workers and governments millions of dollars every year. Independent contractors are responsible for the employer and employee portions of payroll taxes and independent contractors are not covered by many employee protections under Federal law like Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act, and the Family Medical Leave Act to name a few. Independent contractors may not be covered by state laws like unemployment insurance and workers compensation.

Senators Bob Casey (D-PA), Tom Harkin (D-IA), and Sherrod Brown (D-OH) introduced the Payroll Fraud Protection Act of 2013 (S. 1687) on 11/12/13.

The bill requires employers to classify workers accurately as employees or non-employees and notify each new worker of his or her classification as an employee or non-employee, together with information concerning their legal rights. Crucially the bill has anti-retaliation protections making it illegal to discharge or otherwise discriminate against an individual who has opposed any practice, or filed a complaint or instituted any proceeding related to the Act. This means, for instance, that an independent contractor who complains that they have been wrongly classified can bring a lawsuit if their employer fires them for complaining.

The bill also substantially increases the damages owed when an employer misclassifies an employee as an independent contractor and then fails to pay that employee overtime or minimum wage. Currently overtime and minimum wage violations are punished by a liquidated damages provision. Under the Fair Labor Standards Act, employers who fail to pay minimum wage or overtime when it is accrued must pay liquidated damages in an amount equal to the unpaid overtime and/or minimum wage in addition to the amount owed in unpaid overtime and/or minimum wage . (29 USC 216(b)). The bill as introduced would double liquidated damages where the employer misclassified the employee and failed to pay overtime and/or minimum wage. This appears to mean that in those situations, the amount owed in liquidated damages would be two times the unpaid overtime and/or minimum wages.

Senator Casey told the Senate Subcommittee hearing – Payroll Fraud: Targeting Bad Actors Hurting Workers and Businesses misclassifying employees as independent contractors is “a problem cheating workers, employers, and taxpayers.”  Among other problems created by misclassification, Casey explained, is independent contractors are not entitled to “basic safeguards” such as workers’ compensation and unemployment.  This creates an “uneven playing field” for law-abiding businesses that are forced to bid against companies that do not incur the same labor costs.

Other panelists at the hearing presented studies illustrating the problems of misclassification.  One panelist referenced a study commissioned by the DOL in 2000 which found that up to 30% of employers misclassify their employees as independent contractors, and that various state studies indicate this number could be as high as 47 percent. The panelist also mentioned a 2009 study conducted by the Government Accountability Office (GAO) estimating independent contractor misclassification abuses resulted in a loss of federal revenues of $2.72 billion in 2006.

The Payroll Fraud Protection act creates critical new safeguards for employee who have been misclassified as independent contractors. Unfortunately, the GOP controlled House is unlikely to allow this bill to be brought to the floor, let alone pass the bill into law. If your employer has classified you as an independent contract it might be worth speaking to an attorney in your jurisdiction about whether you are misclassified. Under current Federal law misclassified independent contractors still have rights and remedies. If you are in Georgia contact attorney Benjamin Kandy.

 

11/12/13

Giving Notice Before Taking Family Medical Leave Act (FMLA) Leave

When an employee wants to take leave under the Family Medical Leave Act (FMLA) they are required to give their employer some sort of notice. The FMLA requires an employee provide 30 days advance notice of the need to take leave when the need is foreseeable. When 30 days notice is not possible, the employee must provide notice as soon as practicable.

The law also requires employees provide adequate information for the employer to figure out if the leave may qualify for FMLA protection. Employees must also give the anticipated timing and duration of the leave. Employers are allowed to ask for certification and periodic re-certification supporting the need for leave.

The FMLA notice requirements can become a point of contention when an employee claims they were improperly denied FMLA leave or retaliated against for taking leave. In an emergency situation an employee notifying their employer of the need for FMLA leave may not be thinking if their notice is legally sufficient.

The 5th Circuit Court of Appeals (covering Louisiana, Mississippi, and Texas) recently handed down a decision that addressed this issue. In the case Lanier v. University of Texas Southwestern Med. Center, the court looked at whether the plaintiff employee’s notice sent via text message met the FMLA notice requirements. Employee Lanier texted her supervisor that her father was in the emergency room and she couldn’t cover her scheduled on call shift. Lanier was switched to another shift. Lanier resigned later that month claiming that her employer had interfered with her FMLA rights and they were retaliating against her because she took FMLA leave to care for her father while he was in the ER.

The court looked at Lanier’s text message and ruled that it wasn’t sufficient as FMLA notice. The court felt the text only appraised Lanier’s employer of her request to be relieved of on-call duty for that evening. Even though Lanier claimed her supervisor knew that her father was over 90 and had breathing problems, the court believed “it would be unreasonable to expect [the supervisor] to know that Lanier meant to request FMLA leave based on these facts.” (Lanier v. University of Texas Southwestern Med. Center, pg. 6). The court pointed out that Lanier had successfully taken FMLA leave in the past “and was familiar with the proper way to request it, yet did not do so here.” (Id.).

This case shows that even though there is no categorical rule for the required content of FMLA notice and an employee need not use the phrase “FMLA leave”, the notice must give the employer reason to at least inquire further as to whether the leave may fall under the FMLA. The court warns employees that “the employer is not required to be clairvoyant.”(Satterfield v. Wal-Mart Stores, Inc., 135 F.3d 973, 980).

What does this mean for employees looking to take FMLA leave, especially in emergency situations where advanced notice is not practical? The language an employee uses to provide notice DOES seem to matter. While using the word “FMLA” is not required, it is hard for an employer to argue that they didn’t know the employee was requesting FMLA covered leave if the employee uses the word “FMLA”. The method by which notice is provided may be important. While the law does not specify that an employee provide notice using any particular method, using the method closest to the company’s stated policy as practical might help an employee’s notice to be considered legally sufficient.

When employees are trying to take FMLA covered leave giving their employer adequate notice is the first step. Giving proper, timely notice helps to make sure the employee can take their leave and return to their job without any problems.

 

If you have an FMLA issue in Georgia please contact Attorney Ben Kandy. This is not legal advice. This information is not intended to create an attorney-client relationship between the reader and Attorney Kandy. Please contact an attorney in your state if you have further questions.
10/22/13

The Truth About the Spilled Coffee

The New York Times Retro Report has a video about the case of Stella Liebeck. Ms. Liebeck is the woman who sued McDonalds after a cup spilled coffee on her causing 3rd degree burns that required skin grafts and other surgeries. She was injured in 1979 and sued McDonalds in 1980. At trial the jury awarded Ms. Liebeck $2.9 million in punitive damages in addition to compensation for her medical bills and pain and suffering. The 2.9 million figure came from 3 days of McDonalds’ coffee sales. Ms. Liebeck eventually settled with McDonalds for around $500,000.

The “spilled coffee” case has been twisted and spun by those who wish to restrict our Seventh Amendment right to a jury in civil trials. Please watch the Times video and also check out the documentary Hot Coffee. It is available for streaming on Netflix. I have to warn you that the images of Ms. Liebeck’s injuries are not easily forgotten. Whenever someone talks about the epidemic of “frivolous lawsuits” remember Ms. Liebeck. The jury system is something that should be cherished and protected. “Tort reform” is an effort to weaken our ability as citizens to see that justice is served. Tort reform seeks to empower wrongdoers –typically corporate wrongdoers– at the expense of those who have been hurt through no fault of their own.

10/22/13

Plaintiffs in Discrimination Cases Filed in the Northern District of Georgia Rarely Get Their Day in Court

The Atlanta Journal Constitution published an important article on Sunday, October 20th. The front page article looked into a study of decisions in 2011 and 2012 by judges in the Northern District of Georgia(NDGA) when ruling on motions for summary judgment. The study was done by Atlanta plaintiffs employment law firm Barrett & Farahany (full disclosure: I used to work for Barrett & Farahany as an associate).

Motions for summary judgment are usually made after discovery has completed. The moving party (i.e. the party that files the motion) is arguing that looking at the facts in the best possible light for the other party, there is no “material fact” requiring a trial to resolve and that as a matter of law the facts show that the moving party should win. By winning a motion for summary judgment either in whole or in part, the moving party gets a decision in their favor without having to win at trial.

The study shows that in the NDGA, plaintiffs’ Title VII cases are thrown out on summary judgment more than 80% of the time compared to a national average of around 70%. Even more disturbing was the racial difference between various plaintiffs. For instance, African-American plaintiffs have their cases thrown out on summary judgment at a rate closer to 90%.

The problem with having so many cases thrown out on summary judgment is that it denies plaintiffs their Seventh Amendment right to a jury trial. Instead of having a jury serve its important role as finders of fact, judges have taken it upon themselves to act as arbiter of law as well as finder of fact. Using summary judgment so frequently also serves to weaken the protections of Title VII and makes it more difficult for people with legitimate cases to find a lawyer to help prosecute their case.

When you combine the findings of this study with the fairly recent Supreme Court decisions that make it more difficult for plaintiffs to win discrimination cases it seems like there is an effort to weaken the civil rights protections for which previous generations fought and died. Workers in Georgia need to realize that as it is at-will employment means that an employer can fire an employee for any reason or no reason at all. Weakening one of the few exceptions to at-will employment in Georgia takes away some of the protections that Georgia workers have against wrong and unfair treatment in the workplace.

10/10/13

Keeping Time

Occasionally I speak to people who have a potential overtime claim but they think that because there are no traditional time records it would be impossible for them to prove the hours they worked and therefore have no case. This is not so. As you will see, the employer bears the burden of keeping accurate time records and the employee will not be prejudiced because an employer did not fulfil their duty.

Usually these people have been working “off the clock”. Off the clock work can happen in small chunks like waiting 5 minutes every morning for the computer to boot up, or in larger amounts like being pressured to finish work at home.

Under the Fair Labor Standards Act(FLSA) employers have a responsibility to keep certain records for employees who are not exempt from the FLSA. These records include a record of “hours worked each workday and total hours worked each workweek”. 29 CFR 516.2.

Because the employer has a duty to keep records courts have decided that the lack of records should not prejudice the employee.

“[W]here the employer’s records [of work hours] are inaccurate or inadequate and the    employee cannot offer convincing substitutes …. we hold that an employee has carried out his burden if he proves he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference. The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.”

Anderson v. Mt. Clemens Pottery, 328 U.S. 680, 687-88 (1946).

This means that employees need only provide a rough approximation of the hours they worked in a given period. Hours can be proved in a number of ways. Testimony from the employee and co-workers or supervisors who witnessed the employee working, records of emails sent after work hours, security swipe card records, security camera footage, and phone records are some of the ways an employee can prove the hours that she worked off the clock.
If you have been working off the clock and there is no record of the hours you worked don’t despair. Talk to an employment law attorney in your jurisdiction. If you are in metro Atlanta please don’t hesitate to contact attorney Ben Kandy.

09/20/13

Victory! DOL Information on the Final Rule for Application of the Fair Labor Standards Act to Home Health Care Workers.

The Federal Department of Labor announced that they have finalized a new rule that brings the protections of the Fair Labor Standards Act to home health care workers. The rule will go into place January 1st, 2015. The DOL’s website has a lot more information on how the rule will be implemented and whom the new law applies.

As I wrote a few weeks ago, home health care workers who provide services to the sick and elderly inside the patients’ own home are not currently covered by the FLSA and are not entitled to minimum wage or overtime when they work over 40 hours in a week. The biggest change in the new regulations is that home health care workers employed by a third party are now always covered by the FLSA. This means that any home health care worker employed by an agency that sends the worker out to clients’ homes will be owed minimum wage and overtime once the law goes into effect January 2015.

This change is long overdue. Home health care work is a growing field and with the ageing of the US population it will only become more common. This is a good move by the Department of Labor and it will help hundreds of thousands of workers around the nation.