Showing posts with label FLSA. Show all posts
No FLSA retaliation claim available to prospective employees
The Fourth Circuit, in a divided opinion, holds the retaliation protections of the Fair Labor Standards Act apply only to current and former employees of an employer, not prospective employees. In Dellinger v. Science Applications International the majority finds this result compelled by the statutory language. Relying on Robinson v. Shell Oil Co., 519 U.S. 337 (1997) which held a former employee can state a retaliation claim under Title VII for conduct occurring after termination of the employment relationship, the dissent argues the Plaintiff states a claim. Money quote after the jump.
The majority thus ignores Robinson and resorts to its unsanctioned "original intent" methodology, presumably because it cannot adequately square the result it reaches with the Act’s substantive context, that is, the literal words of § 216(b) affording victims of retaliation the alternative reme- dies of "reinstatement" and "employment." Obviously, only former employees can be reinstated, leaving the remedy of employment to those who cannot be reinstated, i.e., those, like Dellinger, who have yet to be employed.
Gimme!
Purdham v. Fairfax County Sch. Bd., (4th Cir. Mar. 10, 2011) is an interesting FLSA case involving a public school golf coach who also was employed by the school as a safety and security assistant. The coach claimed he was entitled to overtime for his services as a golf coach. The court determines his duties as a coach were not a condition of continuation in his "day job" and accordingly he was properly deemed a volunteer coach, not an employee. Former Justice Sandra Day O'Connor participated in the unanimous decision.
Employer loses FLSA appeal-Per Diem payments part of regular rate
An employer's use of a per diem rate did not insulate it against an employee's claim under the Fair Labor Standards Act (FLSA). The employer's contract with an experienced aircraft painter, specified a $5.50 hourly rate and a $20.00 overtime rate. The employee also received a per diem of $12.50 for every hour worked up to 40 in a work week. A year into the contract the employer announced a $1.00 and hour raise. Plaintiff's $5.50 straight time rate was not changed, the per diem was raised $1.00. The Fifth Circuit, in Gagnon v. United Technisource, Inc. et al, No. 09-20098 (May 27, 2010) affirmed summary judgment to the employee. More after the jump.
The Court notes
"UTI/AIS argue that their payment scheme does not violate the FLSA because the FLSA only requires employers to pay overtime at a rate of time and a half, and UTI/AIS paid Gagnon overtime at a rate more than three times his base pay. UTI/AIS also argue that Gagnon’s per diem reasonably approximated his reimbursable expenses and should therefore be excluded from the determination of Gagnon’s regular rate for the purposes of overtime pay. According to UTI/AIS, “[i]t cannot be argued . . . [that] the per diem was a ploy to avoid paying Gagnon overtime compensation.” We disagree.
In its Field Operation Handbook, the Department of Labor states that “if the amount (footnote 6) of per diem or other subsistence payment is based upon and thus varies with the number of hours worked per day or week, such payments are part of the regular rate in their entirety.” Although the Handbook does not bind our analysis, we can and do consider its persuasive effect. See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (“[T]he rulings, interpretations and opinions of the [agency], while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”). The FLSA requires that non-exempt employees who work more than forty hours in a work week must be paid one and one-half times their “regular rate” of pay. 29 U.S.C. § 207(a)(1). The FLSA broadly defines “regular rate” as the hourly rate actually paid the employee for “all remuneration for employment.” 29 U.S.C. § 207(e); see also Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 42 (1944). “The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments.” Bay Ridge Operating Co. v. Aaron, 334 U.S. 446, 461 (1948). The “regular rate” becomes a mathematical computation once the parties have decided on the amount of wages and the mode of payment, which is unaffected by any designation to the contrary in the wage contract. Id. The “regular rate” is not an arbitrary label))it is an actual fact. Id. Here, UTI/AIS have tried to avoid paying Gagnon a higher “regular rate”
by artificially designating a portion of Gagnon’s wages as “straight time” and a portion as “per diem.” Although per diem can be excluded from an employee’s regular rate, 29 U.S.C. § 207(e)(2); see also 29 C.F.R. § 778.217(b), the “‘regular rate’ of pay . . . cannot be left to a declaration by the parties as to what is to be treated as the regular rate for an employee; it must be drawn from what happens under the employment contract.” 29 C.F.R. § 778.108 (citing Bay Ridge Operating Co., 334 U.S. at 465). The Department of Labor has recognized that when, as here, the amount of per diem varies with the amount of hours worked, the per diem payments are part of the regular rate in their entirety.
Footnote 6
In its Field Operation Handbook, the Department of Labor states that “if the amount of per diem or other subsistence payment is based upon and thus varies with the number of hours worked per day or week, such payments are part of the regular rate in their entirety.” Although the Handbook does not bind our analysis, we can and do consider its persuasive effect. See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (“[T]he rulings, interpretations and opinions of the [agency], while not controlling upon the courts by reason of their authority,
do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”).
Furthermore, we are suspicious of UTI/AIS’s claims that Gagnon’s employment contracts were not a scheme to avoid paying overtime. It is difficult to believe that a skilled craftsman would accept a wage so close to the minimum wage when the prevailing wage for similarly skilled craftsmen was approximately three times the minimum wage. We are similarly troubled by the fact that the combined “straight time” and “per diem” hourly rates approximately match the prevailing wage for aircraft painters. Further, it is suspect that a “raise in all pay” was effectuated by increasing the hourly “per diem” rate rather than the “straight time” rate. Finally, we can conceive of no reason why a legitimate per diem would vary by the hour and be capped at the forty-hour mark, which not-so coincidentally corresponds to the point at which regular wages stop and the overtime rate applies.We find this case analogous to other cases in which employers have sought to artificially lower an employee’s regular rate by mischaracterizing a portion of it as a bonus or where employees were paid low “straight rates” for the first hour or two worked-usually set around minimum wage—after which they earned one and one half times the straight rate, and were consequently paid no premium for their actual overtime work. See Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 425 (1945); see also 29 C.F.R. § 778.502.
We hold that Gagnon’s hourly per diem allowances of $12.50 and $13.50 were part of his hourly “remuneration for employment” and must be considered in his regular rate for the purpose of determining overtime pay due under the FLSA. Helmerich & Payne, 323 U.S. at 42. Accordingly, we affirm the district court’s determination that UTI/AIS violated the FLSA by not including Gagnon’s per diem in their calculation of his regular rate." (footnotes omitted).
Unpaid interns
The New York Times reports the DoL intends stepped up investigation of unpaid internships. Nancy Leppink, Deputy Administrator of the Wage Hour Division of the federal Department of Labor issued a guidance letter concerning workplace training. At page 8 she underscores the criteria for excluding interns from coverage under the Fair Labor Standards Act. More after the jump.
"The U.S. Department of Labor’s Wage and Hour Division (WHD) has developed the six factors below to evaluate whether a worker is a trainee or an employee for purposes of the FLSA:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees;
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
If all of the factors listed above are met, then the worker is a “trainee”, an employment relationship does not exist under the FLSA, and the FLSA’s minimum wage and overtime provisions do not apply to the worker. Because the FLSA’s definition of “employee” is broad, the excluded category of “trainee” is necessarily quite narrow. Moreover, the fact that an employer labels a worker as a trainee and the worker’s activities as training and/or a state unemployment compensation program develops what it calls a training program and describes the unemployed workers who participate as trainees does not make the worker a trainee for purposes of the FLSA unless the six factors are met."
Formality rejected
in FLSA, Kasten, retaliation, Wage Hour
In a divided opinion, (Breyer) the Supreme Court has decided that a written complaint is not a necessary prerequisite to a retaliation claim under the Fair Labor Standards Act. The Court refused to decide whether the complaint must be filed with a court or the government, (as dissenters Scalia and Thomas urged) because the Employer did not raise the issue in its Petition for Certiorari. Nevertheless, much of the reasoning in the majority opinion would support the position that an internal complaint would also be protected by the anti-retaliation provisions.
Res judicata does not bar subsequent retaliation claim
The 11th Circuit just decided an interesting FLSA retaliation case. The plaintiffs filed suit concerning overtime violations. Subsequently, after the initial suit was filed, the plaintiffs filed a second suit alleging retaliation occurring after the filing of the original claims. Because there was no amendment or subsequent pleading asserting the second claim in the first suit, disposition of the first suit did not bar the second suit as res judicata.
Minimum wage and job loss
Does an increase in the minimum wage cause a reduction of minimum wage jobs? In the past some studies suggested there is a job loss associated with increases in the minimum wage. But a new study, reported here, using comparisons between counties in different states with different minimum wages suggests neither short term nor long term negative effects on jobs occur as a result of increases in minimum wage requirements. Video here
Senate candidates think minimum wage laws unconstitutional
Two Senate candidates have claimed regulation of the workplace by Congress is unconstitutional. This despite a unanimous Supreme Court upholding the validity of the Fair Labor Standards Act in 1941.
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