Articles Posted in Wage and Hour

On December 6, 2019, the the United States Court of Appeals for the Second Circuit decided an important case which clarifies the law concerning settling federal wage and hour cases. Today’s Long Island employment law blog takes a look at this decision.

In 2015, the United States Court of Appeals for the Second Circuit issued a decision which sent employment lawyers in New York into a panic. The decision, known as Cheeks, essentially requires that when parties settle a lawsuit arising under the Fair Labor Standards Act (FLSA), a court or the Department of Labor must approve the settlement. In other words, in the normal course, parties may settle cases under whatever mutually agreeable terms they decide on and the court has no say in the matter. Cheeks altered this practice for FLSA cases (the federal statute regulating minimum wage and overtime).

Moreover, Cheeks requires that when deciding whether to approve FLSA settlements, courts must review the settlement agreement for fairness and other requirements, including that the release is limited to wage claims and that the agreement does not require confidentiality. Further, courts review any amount of the settlement allotted for attorneys fees to ensure their reasonableness.

Through the Fair Labor Standards Act (FLSA), Congress enacted laws which set minimum wage and overtime pay requirements for employers. The Department of Labor is authorized to issue further guidance about the law, to implement additional rules concerning overtime and minimum wage, and to enforce compliance with the rules and regulations. On September 24, 2019, the United States Department of Labor issued a final rule concerning updates to the overtime rules existing for the past 15 years. Today’s Long Island employment law blog discusses these changes.

Under the FLSA, employers must pay minimum wage to employees. Currently, the federal minimum wage is $7.25 per hour. States may set higher rates, though. For instance, in New York, the minimum wage rate varies depending on county, but it is at least $11.10 per hour and can be as high as $15 per hour in New York City (as of 2019).

The FLSA also requires that employers pay overtime to employees. Overtime pay is one and one half times the employee’s regular rate of pay and kicks in when the employee works more than 40 hours in a workweek. But, not at all employees are entitled to overtime pay. The FLSA classifies employees as either exempt or non-exempt. Exempt employees are not entitled to overtime pay and typically are paid by salary, which remains they receive the same pay no matter how many hours the employee works. Non-exempt employees are typically paid on an hourly basis (or commission) and must be paid overtime hours.

On May 1, 2019, United States District Court Judge Joan M. Azrack issued an ordered in a wage theft case filed by Long Island employment lawyers Famighetti & Weinick, PLLC in the Eastern District of New York. The case alleged that a Long Island food delivery service failed to pay overtime wages to two employees and failed to provide proper and legal wage statements under New York Law.

The lawsuit was served on the defendant corporation and an owner, but the defendants refused to defend themselves. Accordingly, the firm asked the court to enter a default judgment against them. As part of the motion, partner Matt Weinick set forth the applicable laws under the Fair Labor Standards Act and New York Labor Law concerning overtime pay. Weinick discussed how the affidavits submitted by the two employees established that the employer violated the wage and hour laws.

Next, the firm calculated the damages owed to each employee. Weinick set forth the hours each employee worked and how much each was owed for the overtime worked. Weinick also set forth the statutory damages the employer owed for not providing proper wage statements and the amount of liquidated damages allowed for under the FLSA and NYLL.

The Fair Labor Standards Act is the federal law which sets minimum wage and requirements for employers to pay overtime to workers. The law also establishes rules under which employees may be exempt from the overtime requirements.  On March 7, 2019, the United States Department of Labor proposed a rule which would alter the current rules for exempt employees. Today’s Long Island employment law blog discusses the proposal.

Under the FLSA, employers must pay overtime to employees who work more than 40 hours in a workweek.  Overtime must be 1.5 times the employee’s regular rate of pay.

But, some employees are exempt from this requirement. To be exempt, the employee must receive a minimum weekly salary and the employee’s job responsibilities must meet the definition of one of the law’s exemptions.  In 2004, the Department of Labor set the salary requirement to $455 per week, and that amount has remained unchanged since then.

Internships offer students the opportunity for hands on supervised learning experiences in their particular field of study. But, must companies pay their interns? This question has been the subject of fierce litigation for several years and a matter considered by New York’s federal appellate court.  On February 5, 2019, the Second Circuit Court of Appeals considered yet another case concerning unpaid interns. Today’s Long Island employment law blog discusses the case, Velarde v. GW GJ, Inc.

Generally, federal and state labor laws, such as the Fair Labor Standards Act or FLSA, and the New York State Labor Law or NYLL, require that all employees receive, at least, the minimum wage for the hours they perform work for their employer. So, if interns are considered employees, then companies must pay their interns. But, are interns employees entitled to minimum wage or other pay?

In 2015, the Second Circuit faced, for the first time, the question of whether a company must pay temporary interns. The case, known as Glatt v. Fox Searchlight Pictures, set forth a primary beneficiary test.  In its simplest form, the test seeks to determine who is the primary beneficiary of the internship.  For instance, if the internship genuinely provides the intern with a learning experience or other opportunity which benefits the intern more than the company, then the intern is not owed wages. If, on the other hand, the company receives the primary benefit, then the intern is considered an employee and must receive wages.

Unpaid wage and overtime claims are on the rise across New York. There is no question that companies can be legally on the hook for lawsuits alleging the business did not pay its employees properly. But, can corporate shareholders and owners be personally liable, also? Today’s Long Island employment law blog discusses this issue, including a recent decision from New York’s federal appellate court.

The New York Labor Law (NYLL) and the federal Fair Labor Standards Act (FLSA) both require that employers pay minimum wage and overtime to non-exempt employees. But, who is an employer? Is it just the corporation or can individuals also be considered employers. In the Second Circuit Court of Appeals case, Tapia v. Blch 3d Ave., LLC, the court revisited this question.

In Tapia, the plaintiffs alleged, among other things, that the defendants failed to pay overtime, minimum wage, spread of hours pay, and that they failed to provide wage statements to the employees. After a trial, the District Court judge found in favor of the plaintiffs on all the counts. In addition to a corporation, two individual defendants who owned the corporation were also named as defendants.  The District Court determined that one defendant, Ajit Bains, was personally liable, but that another individual defendant, Satinder Sharma, was not liable. The plaintiff appealed that decision.