Wage & Hour Law

New York Employees Can Prove Overtime Claim Even if They Falsely Recorded Working No Overtime

July 12, 2011 | by Jonathan I. Nirenberg

The United States Court of Appeals for the Second Circuit Court recently ruled that an employee who follows his supervisor’s instruction to falsely report that he did not work any overtime hours still can pursue an overtime claim. It reversed a decision from the Western District of New York, which had dismissed the claim because it did not believe the employee could prove how many hours of overtime he had worked.

Greg Kuebel was a Retail Specialist for Black & Decker (U.S.) Inc. He filed class action lawsuit against Black & Decker, claiming the company’s overtime pay practices violate the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL). Specifically, Mr. Kuebel claims Black & Decker violated the law by failing to pay him for the overtime hours he worked but did not record on his timesheet — in other words, his “off-the-clock” overtime hours.

Black & Decker’s official policy required Retail Specialists to accurately record their hours on timesheets that they submit to their managers. There was no official Black & Decker policy which prohibited Retail Specialists from working, recording, or being paid for overtime. However, Black & Decker expected its Retail Specialists to finish their work in a 40-hour work week.

Mr. Kuebel alleges it was impossible to finish all of his work in 40 hours per week, and as a result often worked overtime. However, he did not list any overtime on his timesheets, and therefore was not paid for his overtime hours. Mr. Kuebel explained that he falsified his timesheets because his supervisors instructed him not to record more than 40 hours of work per week because the company could not afford overtime. Mr. Kuebel testified that to the best of his memory he worked more than 40 hours almost every week, and averaged between 1 to 5 hours of overtime per week. After Mr. Kuebel told his supervisor that he had been falsifying his timesheets, Black & Decker fired him for poor performance, dishonesty, and falsification of company records.

In Kuebel v. Black & Decker Inc., the Court explained that to prove an overtime case under the FLSA, an employee has to prove he was not properly paid for working more than 40 hours in a work week, and his employer either actually knew it or should have known about it under the circumstances. To prove the amount of overtime pay to which he is entitled, an employee needs enough evidence to show the amount and extent of the overtime he worked. However, he does not have to prove the amount of overtime he worked with definiteness, and can prove his overtime hours through an inference. Accordingly, the Court ruled that when a company’s time records are inaccurate or inadequate, the solution is not to penalize the employee by denying him any legal recovery.

To summarize, an employee can win an overtime case if (1) he proves he actually worked overtime and was not properly paid for it, and (2) he has enough evidence to show how much overtime he worked through a reasonable inference. An employee can meet this burden through estimates based on his own recollection. This can be true even when the employee admittedly falsified his own timesheets, at least where the employee’s falsification was based on an instruction from a manager or supervisor. That is because it is the employer’s duty to maintain accurate time records for its employees, and employers cannot delegate that duty to their employee. Once an employer knows or has reason to know an employee is working overtime, it cannot deny compensation simply because the employee failed to properly record or claim his overtime hours.

U.S. Supreme Court Rules FLSA Forbids Retaliation Against Employees Who Make Oral Complaints

April 1, 2011 | by Jonathan I. Nirenberg

On March 22, 2011, the United States Supreme Court ruled that the Fair Labor Standards Act of 1938 (“FLSA”) prohibits employers from retaliating against employees who make oral complaints about violations of the FLSA. The FLSA is a federal law that sets minimum wages, maximum hours, and overtime pay requirements. It includes an anti-retaliation provision which forbids employers from firing or otherwise discriminating against employees because they “filed any complaint” under the FLSA.

The case, Kasten v. Saint-Gobain Performance Plastics Corp., involves Kevin Kasten’s lawsuit against his former employer, Saint-Gobain Performance Plastics Corporation. Mr. Kasten claimed Saint-Gobain fired him in retaliation for his verbal objections to the company’s violation of the FLSA. Specifically, he repeatedly told his supervisor, several human resources representatives, and other Saint-Gobain officials that the company was violating the law by locating its time clocks in a place where employees could not get credit for the time they spent putting on and taking off their protective gear. In a separate lawsuit, Mr. Kasten proved that Saint-Gobain violated the FLSA because it was required to pay its employees for the time they spent “donning and doffing” their protective gear.

The Supreme Court found that Mr. Kasten is entitled to try to prove his retaliation case because “filing any complaint” under the FLSA can include making a verbal complaint to your employer. The Court noted that the word “filed” has different meanings in different contexts. Sometimes it implies something in writing, but in other contexts it can include verbal statements. It then considered that when Congress passed the FLSA, it recognized enforcement of the law was likely to depend on “information and complaints received from employees seeking to vindicate rights claimed to have been denied,” and that the anti-retaliation provision was intended to encourage employee to come forward by preventing employers from silencing them through “fear of economic retaliation.” Accordingly, the Court concluded that Congress did not intend to limit the FLSA’s anti-retaliation protection to written complaints, since that would make it more difficult for illiterate, less educated, and overworked workers to complain. It also explained that limiting complaints to written complaints would prevent Government agencies from using hotlines, interviews, and other verbal complaint methods, and would discourage employees from using informal workplace grievance procedures.

However, the Supreme Court also recognized that it would not be fair to employers if the FLSA’s anti-retaliation provision applied when the employer did not have fair notice that the employee made a complaint that could subject the company to a retaliation claim. It therefore ruled that an oral complaint must have enough formality that the employer either understood or reasonably should have understood that the complaint was a business concern. In other words, a complaint is “filed” when a reasonable person would have understood that the employee put the employer on notice that he was asserting a right under the FLSA.

Minor League Yankees Play Hardball with Mascot’s Overtime Pay

February 10, 2011 | by Jonathan I. Nirenberg

Last Wednesday, a mascot who worked for the Scranton/Wilkes-Barre Yankees minor league team filed a federal lawsuit claiming the team violated the Fair Labor Standards Act (“FLSA”) and state law because it failed to pay him for his overtime hours. Specifically, Brian Bonnor’s lawsuit alleges the team improperly designated him as a “manager” to avoid paying him time-and-a-half when he worked more than 40 hours in a week.

Specifically, Mr. Bonnor, who was laid off by the New York Yankees’ AAA affiliate in January, alleges he was paid a salary of $22,000 per year to dress up as the team’s mascot, Champ, and make appearances at games and other events. However, his lawsuit claims he had no supervisory or managerial job duties. He also claims he sometimes worked 80-hour weeks, but the team never paid him for his overtime. The team denies it violated the law.

The FLSA is a federal wage and hour law. It requires employers to pay most employees time-and-a-half for their overtime hours unless they fall into specifically defined categories, including certain “executive,” “administrative,” and “professional” employees. Companies that violate the FLSA can be required to pay the employee not only for their unpaid overtime, but if the violation is “willful” they also can be required to pay double damages (called “liquidated damages”). An employee who wins a case under the FLSA also can recover his attorney’s fees and litigation costs.

New Rights For New York Hotel and Restaurant Employees

January 12, 2011 | by Jonathan I. Nirenberg

Starting on January 1, 2011, New York employees in the Hotel and Restaurant Industries have new rights and legal protections under New York’s Hospitality Wage Order. While there are numerous changes to the law, the following describes some of the more noteworthy changes.

Changes to Minimum Wage
The new law makes it clear that tipped employees must receive at least $7.25 per hour between salary and tips, and reduces the maximum tip credit for food service workers from $2.60 per hour to $2.25 per hour. It also sets new minimum base wages (before tips) for service employees and chambermaids in resort hotels.

Employees Must Be Paid By the Hour
Under the Wage Order, employers in the Hotel and Restaurant Industries now are required to pay non-exempt employees by the hour, rather than based on salaries, weekly rates, day rates, or piece rates. This requirement does not apply to commissioned salespeople.

Stricter Regulations of Tips
Employers and employees in the Hotel and Restaurant Industries are allowed to share and pool tips, meaning combine all of the tips received before redistributing them to employees. However, employers must give employees advance written notice of their tip sharing and tip pooling policies. Employers who use tip pooling or sharing also must keep records of all of the tips they receive, and all of the tips they distribute to their employees. In addition, employers also must treat any special fee for a banquet, special function or package deal as a tip unless they clearly inform customers that the fee is not a gratuity and will not be distributed to employees.

New Requirements For Employee Meal Breaks
When an employee in the Hotel and Restaurant Industries has a work shift that is long enough that he or she is legally entitled to a meal break, the employer must either allow employees to bring their own food, or offer employees a meal at a cost of no more than $2.50, which is the legally required meal credit. Under a separate law, New York State Labor Law Section 162, most employees in New York who work more than a six hour shift that starts before 11 am and ends after 2 pm are entitled to take at least a half hour lunch period between 11 am and 2 pm.

Effective Date
Although the law went into effect on January 1, 2011, employers have until February 28 to make changes to their payroll and bookkeeping systems. However, by the first regular payday after March 1, 2011 employers must pay employees based on the new rules retroactively to January 1, 2011.

New York Passes Wage Theft Protection Act

December 30, 2010 | by Jonathan I. Nirenberg

On December 13, 2010, New York State Governor David A. Paterson signed the Wage Theft Prevention Act (“WTPA”) into law. The WTPA is intended to help protect employees working in New York against violations of their wage and hour law rights.

The WTPA requires employers to provide information to employees about how they are being paid. For example, employers must notify employees, in writing, of:

Their rate and basis for their pay, such as whether they are paid by the hour, shift, day, week, salary, piece, commission, or otherwise;

New York Requires Employers to Provide Written Notice of Overtime Rate

November 16, 2009 | by Jonathan I. Nirenberg

Starting on October 26, 2009, employers in New York State must give newly hired employees written notice of their regular hourly pay rate. For employees who are entitled to receive overtime pay, employers also must state their overtime rate. Employers also need to obtain written confirmation from new employees, confirming they received the required information.

These new requirements are an amendment to New York Labor Law Section 195(1). Their purpose is to “allow workers to determine whether their paychecks properly reflect the hourly wage rates their employers agreed to at the time of hiring, including the overtime rate.” They are a response to the fact that many employees are only told their annual or weekly salary when they are hired, which makes it difficult to determine their hourly and overtime pay rates. The new law also should help minimize any confusion about whether employees are entitled to receive overtime pay, by requiring employers to address the issue up front.

If you work in New York or New Jersey and believe your employer violated your right to receive overtime pay, or another one of your rights as an employee, you should consider contacting an experienced employment lawyer.

Senate Votes in Support of Fair Pay Act

January 25, 2009 | by Jonathan I. Nirenberg

On January 22, 2009, the United States Senate voted to pass the Lilly Ledbetter Fair Pay Act of 2009. If into becomes law, the Act would reverse the United States Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), which requires an employee to bring a federal claim of pay discrimination in violation of the Title VII of the Civil Rights Act of 1964 (Title VII) within 180 days (or in some states, including New York and New Jersey, within 300 days) of the decision that caused the pay disparity.

In the Ledbetter case the Supreme Court ruled that Lilly Ledbetter was too late when she filed her gender discrimination lawsuit against Goodyear. In her case, Ms. Ledbetter as seeking damages because she was paid a lower salary than men in comparable positions at the company. The Supreme Court ruled that her claim was untimely because she did not file a charge of discrimination with the United States Equal Employment Opportunity Commission (EEOC) within 180 days after the company’s initial discriminatory decision, even though she was still underpaid due to the past discrimination, since her salary remained lower than her male coworkers throughout her career.

The Ledbetter decision has been highly criticized ever since it was decided. One problem with it is that employees generally do not know how much their coworkers are paid, often making it difficult or impossible for them to determine that their employers are discriminating against them with respect to their compensation, As a result, employees who have been underpaid because of their race, color, sex (gender), religion, national origin, or disability are unlikely to know about it until long after the 180 (or 300) day EEOC filing deadline.