Tag Archives: Fair Labor Standards Act

Gaga about the FLSA

Lady_Gaga_on_Fame_Ball_Courtesy of Wikipedia.org.jpgEmployment lawyers don’t often get a chance to write about pop superstars, but as it turns out the Fair Labor Standards Act is providing just such an opportunity.

In December 2011, Lady Gaga’s personal assistant, Jennifer O’Neill, filed a lawsuit against Lady Gaga’s touring company claiming that she is owed more that $350,000 in unpaid overtime under the Fair Labor Standards Act and New York State Labor Law.

What’s the crux of the dispute?  

Well, really it’s not much different than those faced by many “more traditional” employers.  The former personal assistant claims that she was misclassified as an “exempt” employee when she was actually non-exempt.  As a result, she alleges that she is owed over 7,000 hours of overtime compensation for time that she spent attending to Lady Gaga at “stadiums, private jets, fine hotel suites, yachts, ferries, trains, and tour buses.”  

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The Department of Labor Issues Proposed Rule Expanding FLSA Coverage to Companionship and Live-In Workers

By: Dean Silverberg, Evan Spelfogel, Peter Panken, Douglas Weiner and Donald Krueger

Reversing its prior stance, the U.S. Department of Labor (“DOL”) proposes to extend the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) to domestic workers who provide in-home care services to the elderly and infirm. See Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. In 1974, when domestic service workers were first included in FLSA coverage, the DOL published regulations that provided an exemption for such “companions”, whether employed directly by the families of the elderly and infirm, or by a third party employer/staffing agency. Now, heeding calls from organized labor and certain members of Congress, the DOL is moving to close this “loophole.” See“Is the Department of Labor Considering a Revision to the Domestic Service Exemption for Home Health Care Aides?” .

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Combining State Court Rule 23 Class Action with Federal FLSA Collective Action

By Evan J. Spelfogel

For several years, employers’ counsel have moved to block the combining of state wage and overtime claims with federal Fair Labor Standards Act (“FLSA”) claims, arguing that Rule 23 opt-out class actions were inherently inconsistent with FLSA collective opt-in actions. For support, they cited to the decision of the Third Circuit in De Asencio vs. Tyson Foods, Inc., 342 F. 3d 301 (3rd Cir. 2003) reversing a district court’s exercise of supplemental jurisdiction because of the inordinate size of the state-law class, the different terms of proof required by the implied contract state-law claims, and the general federal interest in opt-in wage actions. Since De Asencio, numerous district courts in the Third Circuit have dismissed state law wage claims that paralleled FLSA claims because of the “inherent incompatability” between opt-in collective actions and opt-out class actions. 

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National Restaurant Chain Seeks Guidance from U.S. Supreme Court on Tip Credit

By:  Ana S. Salper

With the recent surge in class action wage and hour lawsuits, hospitality employers have developed a heightened sensitivity to tip pooling arrangements, distributions of service charges to employees, and application of the “tip credit.” A case before the U.S. Supreme Court this month, Applebee’s International Inc. v. Gerald A. Fast et al., is likely to add further fuel to the fiery “tip credit” world,  as the high court will have to decide whether tipped employees should be paid minimum wage for nontipped tasks employees perform.

Under the Fair Labor Standards Act (“FLSA”), tipped employees can be paid below minimum wage – as low as $2.13 per hour – so long as employees earn enough tips to reach the minimum wage (which is $7.25 under federal law, although state minimum wages may be higher).  In the case pending before the high court, Applebee’s is asking the Court to decide whether employers can use the tip credit to pay tipped employees — namely, waiters and bartenders — below minimum wage even if they spend more than 20 percent of their time performing nontipped tasks. Applebee’s is challenging a U.S. Department of Labor (“DOL”) rule that requires an employer to pay a tipped employee the regular minimum wage if they spend more than 20% of their work time in a given week performing non-tipped duties. 

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Law Moving in Right Direction for "Half-Time" Method of Calculating Damages in FLSA Overtime Cases

By: John F. Fullerton III and Douglas Weiner

The current prevalence of lawsuits for unpaid overtime compensation under the Fair Labor Standards Act (“FLSA”) by employees who claim they were misclassified by their current or former employer as “exempt” from overtime has been well-documented.  These lawsuits continue to present challenges to employers, not just in terms of the burdens and costs of defending the cases, but in the uncertainty of the potential financial exposure. As our colleagues have previously reported (here and here), there are two methods in which the employees can be compensated for the allegedly unpaid overtime wages in such a case.  Under the FLSA, overtime compensation for non-exempt employees is computed at “a time and half” rate for hours worked in excess of forty in a week.  In appropriate situations, however, when the employees have received a fixed salary for all hours worked (which is frequently what has occurred in a misclassification case because the employer has treated the employees as exempt from overtime), the overtime compensation owed to non-exempt salaried employees can and should be calculated based on the “half-time” or “fluctuating workweek” method. 

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Wage & Hour Division Continues Enforcement Actions against Virginia Hotels

By:  Kara M. Maciel

The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:

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N.Y. Court Allows Restaurant Servers to Pursue Class Claims against Batali Restaurants due to Tip Policy

By:  Kara M. Maciel and Jordan Schwartz

On May 10, 2011, the Southern District of New York conditionally certified a collective action against eight New York metropolitan area restaurants owned by celebrity chef Mario Batali alleging violations of the Fair Labor Standards Act. In the action, restaurant servers argue that the Batali restaurants are paying employees less than minimum wage and unlawfully retaining a portion of their tips.

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Why Doesn’t the Supreme Court Provide a Pathway Through the Morass of Retaliation Law?

The EEOC has reported that it receives more charges of retaliation than any other type of employment discrimination charge, and that there are thousands of cases involving allegations of illegal retaliation filed every year.  Retaliation is often prohibited by statute, but the Supreme Court has expanded the scope of actionable retaliation lately, holding that there was a cause of action for retaliation even though the statute in question did not expressly cover the situation at issue.

The Fair Labor Standards Act (FLSA) prohibits discrimination against an employee “because such employee has filed any complaint” under the Act.  In Kasten v. Saint Gobain Performance Plastics Corp. (PDF), 563 U.S. ___ (2011), the U.S. Supreme Court held that, although there can be no retaliation if the employer is not on fair notice of the initial complaint, a complaint need not necessarily be in writing to trigger protection under the Act.  

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Don’t Touch That Phone–It May Cost You! California Applies Different Rules for "On Call" Time

A client recently asked us to provide them with a summary of the California rules for paying non-exempt employees for “on-call” time.  Our client requires non-exempt IT employees to carry cell phone and/or pagers after hours and on weekends so they can respond to requests for assistance and emergencies at the facility which operates on a 24/7 basis.  The employees are required to respond to a call or page within 10-15 minutes and to be available to go to the facility immediately if necessary.  The questions presented were: 1) whether these employees should be paid for the time spent carrying the cell phone or pager and 2) is there a minimum amount of pay the employees must receive if they are required to report to the facility.  We thought that it would be helpful to share our thoughts here. 

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Don’t Forget the Tip! DOL issues new regulations for tipped employees

Not even the United States Department of Labor (DOL) forgets the tip. On April 5, 2011, the DOL amended the Fair Labor Standards Act (FLSA) regulations for tipped employees. The regulations require employers with tipped employees to take action before the regulations take effect on May 5, 2011. Here are a few “tips” for employers regarding the new regulations:

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