Called A ‘Manager'? You Still May Be Entitled To Overtime

The New York Times recently published a great article about tricks employers use to try to avoid paying overtime, such as labeling a worker a “manager” when he or she is really no such thing. In part, the article provides an example of a Panera Bread worker:

For four years beginning in 2014, Tiffany Palliser worked at Panera Bread in South Florida, making salads and operating the register for shifts that began at 5 a.m. and often ran late into the afternoon.

Ms. Palliser estimates that she worked at least 50 hours a week on average. But she says she did not receive overtime pay.

The reason? Panera officially considered her a manager and paid her an annual salary rather than on an hourly basis. Ms. Palliser said she was often told that “this is what you signed up for” by becoming an assistant manager.

The story then notes how employers avoid paying the require overtime:

Federal law requires employers to pay time-and-a-half overtime to hourly workers after 40 hours, and to most salaried workers whose salary is below a certain amount, currently about $35,500 a year. Companies need not pay overtime to salaried employees who make above that amount if they are bona fide managers.

Many employers say managers who earn relatively modest salaries have genuine responsibility and opportunities to advance. The National Retail Federation, a trade group, has written that such management positions are “key steps on the ladder of professional success, especially for many individuals who do not have college degrees.”

But according to a recent paper by three academics, Lauren Cohen, Umit Gurun and N. Bugra Ozel, many companies provide salaries just above the federal cutoff to frontline workers and mislabel them as managers to deny them overtime.

Lebau & Neuworth is one of the premier wage-hour law firms representing workers. We are here to fight for you, so contact us at (410) 296-3030 or lebauneuworth.com/contact-us.

Minimum Wage Increase in The District of Columbia

Washington, D.C.’s minimum wage increased from $15.50 to $16.10 per hour for non-tipped employees.

Meanwhile, the base minimum wage for tipped employees went up from $5.05 to $5.35 per hour. If a worker’s hourly tip earnings plus base wage do not equal the city’s minimum wage of $16.10 on a weekly average, then his or her employer has to pay the difference.

The increase comes as part of the 2016 law driven by the “Fight for $15” labor movement.

D.C. has a strong wage-hour law that allows a worker to recover owed wages with significant penalties added to the recovery along with attorney fees.

If you think you may need legal assitance with a wage issue, Lebau & Neuworth has been fighting for the wages or workers since our founding, so contact us at at (410) 296-3030 or lebauneuworth.com/contact-us.

BIG WIN FOR MARYLAND WORKERS: Wages Required for Employer-Required Activities Before or After Work

In Amaya et al. v. DGS Construction LLC et al., Maryland’s highest court has held that Maryland workers are entitled to get paid for some employer-required tasks performed before and/or after work. For example, in Amaya, the Maryland-based workers were required to park at an off-site location, take an employer-provided bus to the actual worksite, and then wait in a security line to be checked in for work.

Maryland’s highest court found in favor of workers, who said they should be paid for the time the process took. The Court has ruled that Maryland labor laws, specifically the Maryland Wage and Hour Law and Maryland Wage Payment and Collection Law, do not include an exception for before- and after-work required tasks that exists in federal law under the Portal-to-Portal amendment to the Fair Labor Standards Act, the federal law that governs minimum wages and overtime wages.

The Portal-to-Portal act provides that employers do not have to pay employees for time spent performing certain activities that are considered preliminary and postliminary to the employees’ “principal” or main job duties that they are employed to perform. Such activities can include but are not limited to traveling to and from work, waiting in parking areas, waiting in security lines, and putting on and taking off equipment such as safety gear. But now, according to Maryland’s highest court, Maryland State law does have that exception.

This is a huge win for Maryland employees because it means you may be entitled to additional wages for tasks your employer requires you to perform at the beginning and end of your work day.

If you think you may be owed additional wages for work you are required to perform before your work day begins or ends, the attorneys at Lebau & Neuworth may be able to help. For a consultation, contact us at (410) 296-3030 or lebauneuworth.com/contact-us.

Federal Wage-Hour Law Expanded to Include Overtime ‘Gap’ Claims

Recently in Connor v. Cleveland County North Carolina, the federal Fourth Circuit Court of Appeals, of which Maryland is part, held that the Fair Labor Standards Act (FLSA) allows claims for unpaid straight-time wages in weeks when an employee works overtime hours.

Typically, the FLSA only requires that an employee be paid the required minimum wage, currently $12.50 in Maryland for employers with 15 or more employees (Montgomery County has a separate minimum wage based on employer size), and overtime for all hours worked at a rate of one-and-one-half times the employee’s regular rate of pay.

An overtime gap claim exists when an employer pays an employee more than the minimum wage but less than his/her guaranteed hourly rate during a week when the employee worked overtime hours and is owed overtime pay. For example, if an employee has a fixed hourly rate of $15 per hour but is only paid $13 per hour and during that week the employee worked over 40 hours in the workweek and is entitled to overtime wages, there is a possible $2-per-hour overtime gap claim.

Prior to the Connor decision, an employee had no claim for the difference for what was supposed to be paid as the guaranteed hourly rate and what was actually paid during weeks when they worked overtime hours. The Connor case makes clear that when an employee and employer have an expressed agreement for a set hourly rate, the employee is entitled to be paid all of his/her guaranteed regular straight-time rate before overtime wages are calculated. The Court relied on the plain language of the FLSA and relevant federal overtime regulation to make its decision.

In Connor, the agreement between the employer and the employee was a collective bargaining agreement. It is an open question as to what is needed for an employee to prove that there was an agreement that bound an employer and could not be changed.

Importantly, even if an employee does not have a viable overtime gap claim, the employee may still have a claim under the Maryland Wage Payment and Collection Law, the Virginia Wage Payment Act, and the District of Columbia law. This is because these laws require that employers timely and correctly pay their employees.

Although the decision in Connor allows for “overtime gap time claims,” “pure gap time claims” are still not allowed under the FLSA. “Pure gap time claims” are for unpaid wages when an employer pays an employee more than the minimum wage but less than his/her guaranteed hourly rate during a week when the employee did not work overtime hours of more than 40 hours in a workweek.

If you think your employer has not paid you all that you are owed (overtime, commissions, bonuses, etc.), contact the lawyers at Lebau & Neuworth at (410) 296-3030 or lebauneuworth.com/contact-us.

Employers Can’t Avoid Overtime Wages by Playing Dumb

Recently in Richardson et al. v. Alliance Residential Company, the U.S. District Court for Maryland was asked to review and clarify its ruling in a Fair Labor Standards Act (FLSA) case. Specifically, the employer, Alliance, sought clarification regarding whether it could argue it lacked knowledge that the employees worked overtime hours.

The Fair Labor Standards Act is the federal law that sets the rules employers must follow regarding minimum and overtime wages. Under the FLSA, employers must pay overtime wages at one and one-half times an employee’s regular rate of pay for all hours worked over 40 hours per week. A central issue in determining whether or not an employer owes unpaid overtime wages is whether or not the employee actually worked overtime hours and whether or not the employer knew about that work.

In Richardson, the employer, Alliance, argued that a manager violated company policy by telling an employee not to record his overtime hours, and because of that policy violation, Alliance could not be held liable for any unrecorded overtime hours of which it was not aware. The Court rejected that argument and held that because the employee’s supervisor was responsible for monitoring his hours worked, the supervisor knew the employee was working overtime hours and that knowledge could, therefore, be imputed on Alliance. In other words, what the supervisor knew, Alliance knew.

This is an important case for employees because corporations often try to avoid liability for unpaid overtime wages by hiding behind corporate policies and management. This case reminds employers that they cannot “play dumb” or hide behind the actions of management to avoid liability under the FLSA.

If you think you are owed unpaid overtime wages, the lawyers at Lebau and Neuworth may be able to help. For more information, contact us (410) 296-3030 or lebauneuworth.com/contact-us.

Unpaid Damages in Overtime Cases can Amount to Three Times What is Owed

Maryland and federal laws require the prompt payment of overtime-eligible employees – and the consequences for employers that fail to do so can be severe.

Under the Fair Labor Standards Act, the federal overtime law, an employer that fails to pay required overtime can be responsible for two times the amount owed, as well as attorney fees and costs incurred by the work involved in filing a lawsuit.

According to the Maryland federal district court in the recent case of Braxton v. Jackson, double damages must be imposed against the employer unless “the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation” Further, good faith in this context requires more than “remain[ing] blissfully ignorant of FLSA requirements” and taking “an ostrichlike approach to [FLSA].” Good faith “requires that an employer first take active steps to ascertain the dictates of the FLSA and then move to comply with them.” So, an employer will have to prove that it made some efforts to learn about overtime requirements and cannot simply play dumb.

Maryland wage laws provide that triple damages can be imposed against an employer for failing to timely pay owed overtime. To avoid that penalty, an employer must show there is a “bona fide dispute” about whether overtime is owed. Depending on the circumstances of the case, this may or may not be a difficult burden for a guilty employer to satisfy.

Lebau & Neuworth has helped thousands of Maryland and District of Columbia workers recover overtime wages with the penalty damages. To get help with getting what you are owed, contact us at (410) 296-3030 or lebauneuworth.com/contact-us.