Tag Archives: overtime

Wage and Hour Law

USDOL: NY Construction Workers to Receive $727K, Resolving Wage Violations.

NEW YORK CITY CONSTRUCTION COMPANY, US LABOR DEPARTMENT REACH AGREEMENT ON BACK WAGES OWED TO WORKERS

NEW YORK – The U.S. Department of Labor has obtained a consent judgment in federal court requiring a New York City design and construction company and its owners to pay $726,989 in back wages and liquidated damages to 184 employees and take other corrective actions to resolve past overtime and recordkeeping violations of the federal Fair Labor Standards Act.

Design Development NYC, Inc., had misclassified almost all of its employees as independent contractors, an investigation by the department’s Wage and Hour Division found.

The misclassified employees worked in numerous jobs, including carpenters, draftspersons, drivers, electricians, laborers, painters, and plumbers and tilers. The company also wrongfully considered three employees as exempt from the FLSA’s overtime compensation requirements, paying them a fixed weekly salary without regard to hours worked.

As a result, misclassified employees and non-exempt employees – some of whom worked 70 hours per week or more – did not receive proper overtime pay when they worked more than 40 hours in a workweek. The FLSA requires that employees receive one-and-one-half their regular rates of pay when they work more than 40 hours in a workweek and that employers maintain adequate and accurate records of employees’ wages and work hours.

“This resolution commits this company to positive and effective steps to prevent future violations,” said Mark Watson Jr., the Wage and Hour Division’s northeast regional administrator.

“Our goal is to ensure that employees receive the hard-earned wages due them and that law-abiding businesses can compete fairly in the marketplace,” said Jeffrey S. Rogoff, the regional solicitor.

The company and owners, Michael Daddio and Earl Brian, neither admit nor deny the allegations; they have agreed to a consent judgment, entered in the U.S. District Court for the Eastern District of New York, which requires them to comply with the FLSA by determining employees’ overtime exemption status properly and recording employees’ work hours accurately, among other requirements. They will also submit complete samples of time and payroll records for all employees to the division for its review, and supply current and new employees with written notification of their rights under the FLSA in languages the workers understand.

The division is committed to providing employers with the tools they need to understand and comply with the variety of labor laws the division enforces. It offers useful resources ranging from an interactive E-laws advisor to a complete library of free, downloadable workplace posters. In addition, the division’s Community Outreach and Resource Planning Specialists conduct ongoing outreach activities to educate stakeholders, including employers, employees, business and labor groups and professional associations, among others, with accessible, easy-to-understand information about their rights and responsibilities.

The division’s New York City District Office conducted the FLSA investigation. Trial Attorney Frances Y. Ma of the department’s New York Regional Solicitor’s Office handled the case for the division.

For more information about the FLSA, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243) or its New York City District Office at 212-264-8185. Information also is available at http://www.dol.gov/whd.

SOL & WHD News Release:
05/03/2017
Media Contact Name:
Ted Fitzgerald
Email: fitzgerald.edmund@dol.gov
Phone Number:
(617) 565-2075

Media Contact Name:
James C. Lally
Email: lally.james.c@dol.gov
Phone Number:
(617) 565-2074
Release Number:
17-0470-NEW

Photo credit: ILO in Asia and the Pacific via Foter.com / CC BY-NC-ND

employment law, government, Legislation

Department of Labor Weighs In on New Age of Salary Servitude for ‘Executives’

Today’s post comes from guest author Roger Moore, from Rehm, Bennett & Moore.

Most of the U.S. workforce has the right, provided by the Fair Labor Standards Act, to be paid overtime for working more than 40 hours in a week. Before the federal government set rules for overtime, most employees worked longer hours, and millions of Americans worked six or seven days a week, as Chinese factory workers do today. Salaried workers also have the right to be paid a premium for overtime work, unless they fall into an exempt category as a professional, an administrator, or an executive. Exempt employees must be skilled and exercise independent judgment, or be a boss with employees to supervise. However, many companies have worked to get around these overtime rules by classifying employees like cooks, convenience store employees or restaurant workers as “managers,” “supervisors,” or “assistant managers or supervisors,” so that their employer can deny them overtime under this exception. 

In May 2016, the Department of Labor issued its final rule establishing a new minimum salary threshold for the white-collar exemptions (executive, administrative and professional) under the Fair Labor Standards Act. This new threshold of $913 per week ($47,476 annualized) more than doubles the current minimum weekly salary threshold of $455 per week ($23,660 annualized).  While that may seem like a huge increase, the old threshold level is only $2 a week above the poverty level for a family of four. Twenty-one states have filed suit to challenge this rule, citing the rule will force many businesses, including state and local governments, to unfairly and substantially increase their employment costs. 

The old rule allowed companies to put employees on “salary” at a low rate and require them to work sometimes significant overtime. The fact that so many government entities are concerned about this new rule substantially increasing their employment costs underscores the extent to which even government entities have taken advantage of employees in this fashion. Can you imagine earning $25,000/year and having to work 50, 60 or 70 hours a week? Even at 50 hours a week, that equates to an hourly wage of only $8.01!

In the first year, the department estimates that the new rule may affect, in some manner, over 10 million workers who earn between $455/week and the new $913/week threshold.  

The median worker has seen a wage increase of just 5 percent between 1979 and 2012, despite overall productivity growth of 74.5 percent (Mishel and Shierholz, 2013), according to the Economic Policy Institute. One reason Americans’ paychecks are not keeping pace with their productivity is that millions of middle-class and even lower-middle-class workers are working overtime and not getting paid for it. Before this rule change, the federal wage and hour law was out of date. This change purports to correct this modern day servitude that the law – for the last 30 years – has carved out a huge exception, allowing workers to be taken advantage of simply by assigning them a title and paying them a salary.  

 

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