FLSA – Fair Labor Standards Act – Overtime

FLSA Overtime Wage Claims
Oregon employees have two separate sets of laws which may require employers to pay their employees overtime wages. Overtime laws, in the context of this article, require the employer to pay 1 1/2 times the normal rate of pay for hours worked in excess of 40 hours in a single workweek. There are other situations where overtime could apply, but for most employees, the 40 hour workweek is the time frame that entitles employees to overtime premium wages.

Most employees are entitled to overtime premium wages when they work more than 40 hours in a single workweek. Either from Oregon’s overtime laws, or from the federal counterpart called the FLSA (aka “Fair Labor Standards Act”). This blog discusses some factors which make the FLSA more advantageous to employees. It does not explore what factors make Oregon’s overtime laws more advantageous. Each set of laws can be more beneficial in the correct circumstances.

Liquidated Damages as a Penalty for Failing to Pay Overtime Wages
When an employer fails to pay overtime wages under the FLSA, the employee is entitled to the unpaid overtime wages, plus an amount equal to the unpaid overtime wages as liquidated damages. Where the employer has been failing to pay overtime wages for a while, and the employee has worked lots of unpaid overtime hours, the liquidated damages can be significant. For instance, an employee working just 5 hours of overtime per week, for 50 weeks (1 year less 2 weeks of vacation), at $12 per hour, the employee would be due $4,500 in unpaid overtime wages. In addition, the employee is likely due another $4,500 in liquidated damages under the FLSA. Going back the maximum of 3 years, the employee would be due $13,500 in overtime and the same as liquidated damages under the FLSA, for a total of $27,000. This is far greater than could be recovered under Oregon law in this circumstance.

The Employee Bringing an FLSA Overtime Claim Assumes Less Risk
Unlike Oregon’s overtime laws, the FLSA overtime laws do not provide attorney fees to an employer that prevails on the wage claim. Attorney fees can be a significant deterrent, especially in situations where the employee is required to rely solely upon the employer’s records. By limiting the harm if the claim is not prevailed upon, more employees can file claims for the unpaid overtime wages.

Other Considerations that Lead to Filing of an FLSA Overtime Claim
The FLSA includes more items in the calculation of your hourly rate for overtime purposes. For instance, bonuses and travel pay, can be considered wages for purposes of calculating the rate overtime should be paid under the FLSA. For instance, if an employee works 50 hours, makes $10 an hour, and receives a production bonus of $100 the overtime would be calculated like this:

$500 (50 * $10 per hour) + $100 (production bonus) = $600
$600 (total regular wages paid) / 50 (hours worked in workweek) = $12.00 per/hour

Thus, under this example the employee would be do overtime wages calculated at $12 per hour, not $10 per hour.

Sometimes it is simply more advantageous to file your overtime claim under the FLSA. Other times, it may be more advantageous to file your claim under Oregon’s overtime laws. The lawyers at Schuck Law are familiar with both and can help employees navigate these confusing laws to determine the best way to proceed.

Google By David Schuck

Oregon Still Considering Ways to Increase Minimum Wage

Debate continues regarding Oregon’s minimum wage rates
Currently, Oregon’s minimum wage rate is $9.25. BOLI. The Oregon Bureau of Labor and Industries is required to adjust minimum wage based upon specific criteria. Therefore, each year, with some exceptions, the minimum wage increases. Minimum Wage Page. New proposals are suggesting a faster increase and allowing local governments to increase the minimum wage in their cities/counties. Oregonian. This means that minimum wage could be higher in cities than rural counties. Currently, Portland cannot consider having a $15 minimum wage like Seattle. However, if this recent proposal goes through, Portland and other cities/counties would have that option. If you would like to see the minimum wage increase in your area, start paying attention to those representing your interests in Salem.

Google By David Schuck

What happens if your employer is stealing your tips

Tips – Who is entitled to the tips and what does the law classify tips to be
The status of tips under the law is far more complex than it should be. We all have an understanding what tips are. We provide tips to our servers regularly. Most consumers believe that the tips we provide to the worker remain with that worker. However, this is often not the case.

From a federal perspective, tips are property of the employee to which the tip is provided. Oddly enough, federal wage law allows employers to reduce wages which would otherwise be due as minimum wage under the FLSA. That means that the employer need not pay all minimum wages under the FLSA minimum wage laws because the employee receives tips. Despite the fact that the tips are the sole property of the employee, federal law also allows management to force employees to be in tip pools. How it can be the sole property of the employee and still be subject to the mandatory control of the employer, your guess is as good as anyone else’s. The tip pools are also limiting on the employer. Only regularly tipped employees can participate in the tip pools. However, in a fairly recent case, the Ninth Circuit Court of Appeals held that so long as a tip credit was not being taken, the rules regarding who can share in a tip pool are not covered. This is especially important in states like Oregon which forbid tip credits.

Side effect of Oregon’s failure to allow employers a tip credit against minimum wage
Oregon law is different than federal law in that it does not allow a tip credit. Because an employer cannot escape liability for minimum wages in Oregon by taking a tip credit, and because the federal case states that the tip pool requirements do not control where no tip credit is taken, Oregon’s law gets more confusing.

No case in Oregon has ruled on whether a tip is classified as a wage for purposes of wage and hour laws. However, some tax and employment department statutes consider a tip a wage for purposes of those laws. For instance, there are rules regarding payment of tips and taxing tips on the paycheck stubs. Apparently, the government is less concerned with whether the employee actually receives their tips than they are in ensuring that the taxes due on the tips are paid by someone. (unemployment taxes and income taxes).

The effect that this confusion has had to employees
Employers have begun to use tips, not only to offset minimum wages, but to simply add to their bottom line. I have seen multiple cases where 100% of the tip goes to the owner of the restaurant. Or where the credit card tips never get paid to the employee. I have also seen situations that there is no accounting for the tips such that the employee cannot tell what they were due in tips and thus have no way to ascertain whether they have received all their tips. The creativity of the ways the employer are stealing tips from employees varies by employer. As a consumer I am appalled, if tips are to be used to pay the restaurant, the server should so state so that the customer knows what they are actually being charged. I personally would not tip if it was known to me that the tip was going to the restaurant and not the server.

As an employee, what can you do if management steals your tips
Just as the business owners are finding unique ways to steal tips, the employee must find ways to get them back. As examples, the employee could file a wage claim asserting that tips were wages. While this is against federal law, it provides many options if won in state laws. The employee could recover penalty wages. The employee could also assert the deductions of tips were unlawful and thus entitled to damages. In the right case, where the employer fails to comply with other wage laws, the tip could be combined with that claim reducing risk of the litigation. Alternatively, the employee could file claims for conversion (theft of tips). Under the right circumstances, an employee may be able to file the tip conversion case such that their attorney fees would be paid.

Google By David Schuck

Employers Can Use Time Clocks to Steal Your Wages

Modern Time Clocks are Computers and Can Be Programmed to Steal Your Wages
Employers have used time clocks for many years to track hours worked and calculate wages due employees. Older time (punch) clocks used paper time cards. The employee placed their time card into the employer’s time clock stamping a date and time on the employee time card. The employer then used the times recorded on the employee time card to calculate the wages due the employee. Now, most time clocks have transition from punch cards to an electronic time clock. What some may not realize is that the electronic time clocks often have sophisticated computers operating in the background. This allows your managers to go in and manually change the time you start or stop work without your knowledge. It also allows the employer to program the time clock to automatically discard specific time from all employees. For instance, if you are scheduled to work at 10am, but your work it already busy, the employer could ask you to start early. The electronic time clock could be programmed to ignore any time worked before you were scheduled to start. This is true regardless of whether your manager told to start your shift early.

By altering your punch-in and punch-out times electronically, the number of hours you are paid is reduced to a number that is lower than the hours you actually worked. Obviously, this causes you to earn less money on your paycheck. Usually, these alterations, whether manually performed by your manager or programmed into the time system, are fairly small. On first blush, you might believe, what is five minutes. However, when you realize that you mist 5-20 minutes per week, and you have already worked 25 weeks, you realize that you are due almost a full day’s wage. Then if you figure out how many employees the employer has, you can see why this is so profitable. For instance, in the same example, with 100 employees, you are looking at 100 days of free work. Even at minimum wage, the employer in this situation likely saves over $6,000. The more employees they have and the more they take at any one time, the more the employer can save.

Employees subject to such wage theft are likely due the unpaid wages, plus a civil penalty, and if the employment has ended penalty wages. These penalties can exceed several thousand dollars each. Always track the time you work and the time shown on your paycheck stub to determine whether you were paid for all the time you worked. If your boss is stealing your wages and refusing to pay them, call the wage and hour lawyers at Schuck Law at (360) 566-9243 for a free consultation, or visit our website at the Oregon Wage Claim page.

Oregon’s New Sick Leave Law Begins January 1, 2016

Oregon Passes New Sick Leave Laws
Oregon has officially passed a state-wide sick leave law. OregonLive. The new Oregon law is somewhat complex, but generally, if you work for an Oregon employer that has 10 or more employees, you are entitled to sick pay. SB 454. In some situations, the Oregon employer can have less than 10 employees and still be required by Oregon law to provide sick pay to its Oregon employees. Small Oregon employers not required to provide sick pay are still required to provide their Oregon employees with time off, unpaid, under the new sick leave laws. The amount of sick leave and/or sick pay depends upon polices of the Oregon employer or hours worked by the Oregon employee. The minimum amount is 1 hour of sick time or sick pay for each 30 hours the Oregon employee works. The sick leave law does not require an Oregon employer to pay the Oregon employee his/her accrued sick time at the end of employment. An Oregon employer who violates this law can be sued for the unpaid wages. If an Oregon employee is fired because he/she took sick leave, the employee can sue for wrongful termination. Should your employer fail and refuse to pay the sick pay, and the employment ends, likely the employee can seek penalty wages for the late payment of final wages. Penalty wages under Oregon law are calculated by multiplying the regular hourly rate (or if the Oregon employee is not paid by the hour, a calculated rate) by 8 hours per day for up to 30 days. For example, at $15 per hour, the maximum amount of Oregon penalty wages would equal $3,600. ($15 * 8 * 30).

Google By David Schuck

Discrimination for Discussing Wages

Oregon’s Anti-Discrimination Laws Expanded for Wage Issues
Generally, an employer may fire an employee for any reason or no reason at all. This is known as “at-will” employment. Likewise, an employee may quit under the same terms. However, the at-will doctrine is not absolute. For example, an employer cannot discriminate against a person based on race or gender. Some may not know that an Oregon employer could not discriminate against an employee because the employee “has made a wage claim or discussed, inquired about or consulted an attorney or agency about a wage claim.” ORS 652.355. However, some confusion came out of the wording of the law. What if the employee was not threatening a wage claim, but simply inquiring about their wages. With the new additions to Oregon law, this issue is clear. It is unlawful to discriminate or retaliate because the employee has: “Inquired about, discussed or disclosed in any manner the wages of the employee or of another employee.” HB 2007. It is still unlawful to discriminate based upon the wage claim, but now an employer may not even discriminate because the employee discusses or compares wages. This is important because often this is how an employee learns he/she is not being paid all their wages.

Google By David Schuck

Independent Contractor vs. Employee – News & Why Do We Care

What Is an Independent Contractor?
An independent contractor is someone who runs his or her own business. There has been a trend where more companies are tying to save money by calling people who work for them independent contractors. The benefits to the employer is that they do not have to pay employer taxes, social security, worker’s compensation insurance, vacation, paid time off, sick pay, health benefits, or retirement. The more potential employees covered, the greater the savings to the employer. Companies avoid the employment relationship in several ways. For instance, the can hire employees through temporary employers or simply sign independent contractor agreements directly with the employer.

Recent Cases Highlight this Issue
In Portland, Oregon, a local barber shop called the Modern Man classified its barbers as independent contractors. When the barbers were not being paid they got on the news because they picketed the barber shop. Oregon Live Article. In response to this action, Brad Avakian, the Commissioner of the Oregon Bureau of Labor & Industries, posted the following:

Barbers at Modern Man can contact our agency with claims — we’ll investigate and determine whether they should be classified as employees, not independent contractors.

Posted by Brad Avakian on Wednesday, June 3, 2015

The purpose of determining whether the barbers were independent contractors was to provide better protection to the workers under Oregon’s Wage & Hour laws. This is because Oregon’s wage and hour laws provide employees with the right to sue for their unpaid wages, overtime wages, minimum wages, deducted wages, etc. They also allow the employee to recover their attorney fees. So there are a host of very powerful laws to protect the worker once they are classified as employees. In addition, severe penalties can be levied against the employer and for the employee where the employer fails to pay all wages as required by Oregon law.

In federal court, the Ninth Circuit found that FedEx misclassified its delivery drivers as independent contractors in both Oregon and California. The point is that these types of misclassifications are everywhere. It is not just the small time shops, like Modern Man that make the mistake. Instead, large sophisticated companies like FedEx, and every size company in-between, make this mistake. Sometimes client fear larger companies, thinking that they have powerful attorneys on their side, but obviously large companies can perform unlawful actions as easily as the small ones.

How to determine if you are an Independent Contractor or employee
To determine whether a person is properly classified as an employee or as an independent contractor is complex. Both state and federal wage and hour law use a version of the “economic realities” test to determine whether a person could be classified as an independent contractor. Technical Assistance. The economic realities test essentially looks to determine whether and to what degree the worker is economically dependent upon the putative employer. The best way to determine if you are misclassified as an independent contractor is to call Schuck Law at (360) 566-9243 because the test gets significantly more complex as you attempt to apply facts to it. Independent Contractor page.

Google By David Schuck

Department of Labor Proposes Changes to Overtime Exemption Laws

The US Department of Labor Announces Proposed Changes to Overtime Laws Under the FLSA
The federal overtime laws are commonly referred to as the FLSA. The FLSA determines when an employee must be paid overtime.  Overtime, under the FLSA, is defined as hours worked over 40 in a seven day period called the workweek.  Where an employee works overtime, the employer is required to pay 1 1/2 times the regular hourly rate for those hours worked in excess of 40 hours in a single workweek.

An employee, under very specific circumstances, can be “exempt” from the overtime laws of the FLSA.  An employee who is exempt, is not entitled to overtime wages.  These exemptions are limited and narrowly viewed against the employer and for the employee being entitled to their overtime wages.  One of the most common exemptions is the managerial exemption.  There are specific duties the employee must perform to fit within the managerial exemption.  In addition, to be exempt under the managerial exemption, the employee must be a “highly compensated” employee and paid a salary.  Under the current FLSA, this means that the employee must be paid $455 per week, or $23,660 per year.

The Department of Labor is proposing to change the salary amount.  DOL Website. It recognizes that an employee making $455 per week is not a highly compensated employee, but instead, is being paid poverty wages.  The DOL is considering increasing the salary amount to $970 per week, or $50,440 per year. Under the proposed changes, any manager not making $50,440 per year would likely be entitled to overtime wages when they work more than 40 hours per week. This stops employers from working their assistant managers 60 hours per week and paying the $455, or the equivalent of $7.58 per hour. Under Oregon or Washington laws, this is not even minimum wage. It also means that the supervisor is getting paid several dollars less per hour, assuming no minimum wage violations, than the employees they supervise. However, under the new proposed changes, the manager would make $970 per week, $16.16 per hour, well above the minimum wage. Alternatively, the employer can pay the person at an hourly rate and pay overtime wages if they work more than 40 hours in a single work week. At the Oregon minimum wage, the same 60 hour per week worker would receive 40 hours at minimum wage ($370), plus 20 hours at their overtime rate ($277.50) for a total of $647.50. This is $192.50 more than the old salary rate of $455.

This is an important break through for many restaurant and retail management staff. The employer is required to either pay a significantly higher salary making it worth the employee’s time to work the long hours, or pay overtime for the hours worked. Where the employer does not pay the employee the correct salary, the employee can sue for the unpaid overtime. This type of claim is commonly referred to as a wage claim, or overtime wage claim. In addition to the unpaid overtime wages, the employee could receive up to double the amount of unpaid overtime. The FLSA also requires the employer to pay the employee’s attorney fees in an overtime wage claim lawsuit. This is important because it allows Schuck Law to take FLSA overtime wage claim lawsuits on a contingency fee basis, essentially being paid by the employer to win the employee’s overtime wage claim lawsuit.

Once this change in overtime law passes, it is unclear whether states like Oregon and Washington are going to change their overtime exemption. Oregon Exemption. Will they match the salary requirement of the FLSA? Or will their overtime exemption remain the same? Oregon requires the employer to adhere to the wage and hour laws, including overtime laws, which are most favorable to the employee. OAR 839-020-0115. In any event, this is an advancement that has long been overdue.

Google By David Schuck

What can I do, my employer will not pay my final paycheck (Oregon)

Final Paycheck Laws and Penalty Wages in Oregon
Oregon wage and hour law sets very specific time lines when all wages are due. Late Pay Page. While there are a few minor exceptions regarding when final paychecks (wages) are due, they rarely apply. ORS 652.140. Oregon wage and hour law sets the following basic time lines for payment of all final wages/paychecks: (1) When an employer discharges an employee or when employment is terminated by mutual agreement, the final paycheck, including all wages earned and unpaid, become due not later than the end of the first business day after the discharge or termination. (2) When an employee who does not have a contract for a definite period quits employment, the final paycheck, including all wages earned and unpaid at the time you quit, become due and payable immediately if the employee has given to the employer not less than 48 hours’ notice, excluding Saturdays, Sundays and holidays, of intention to quit employment. (3) When the employee quits and has not given 48 hours’ notice, the final paycheck, including all wages earned and unpaid, become due within five days, excluding Saturdays, Sundays and holidays.

You are Likely Due Penalty Wages if Your Final Paycheck was Late
Where the employer fails to timely pay all final wages at separation from employment (termination or quit), generally the employee can recover the wages, plus penalty wages. By all wages, the law means everything. For instance, if the employer makes an unlawful deduction during employment, those wages still remain due and must be timely paid at the end of employment. Deduction Page. Also where the employer does not pay for all hours worked, like an off-the-clock situation. Hours Worked. In such situations, the employer did not pay all wages in the final paycheck. Penalty wages are duce only where the failure to pay was willful, but willful does not carry a common meaning. Willful for penalty wages generally means that the employer is free to determine what it will pay, and chooses to pay the final paycheck when it did and in the amount it did. Penalty wages for a late final paycheck are calculated by multiplying the regular hourly rate (could be salary or commissions reduced to hourly rate) for 8 hours per day until paid. There is a maximum of 30 days for the penalty. Thus an employee earning $15 per hour could be due up to $3,600 in penalty wages if his employer failed to pay final wages for 30 days. Under the right circumstances, other damages or penalties could be assessed under either federal or state wage and hour laws. Such as where the employer fails to pay overtime wages, or minimum wages.

Costs and attorney fees
In most situations where the employee wins their case proving that the employer did not timely pay their final paycheck timely, or that the final paycheck did not include all wages, attorney fees and costs are awarded in addition to the amounts owing the employee under Oregon wage and hour law. This makes it possible for the wage and hour attorneys at Schuck Law to take wage claims on a contingent basis essentially being paid to win the wage claim lawsuit for the employee and have the employer pay the fees and costs.

Google By David Schuck

Oregon Wage Deduction Limitations

Oregon Wage Deduction Limitations
Generally Oregon law limits the deductions employers can take from the wages of its employees. Generally speaking, if it is not taxes, garnishments, or voluntary payments for the benefit of the employee, little else can be deducted. The specific details can be found in ORS 652.610 subsection three. ORS Ch. 652. In addition to limiting what may be deducted from an employee’s paycheck, the statute also requires that the employer track the payment and inform the employee of the reason for the deduction. The simple fact that the paycheck does not correctly show the deduction may be enough to make an otherwise lawful deduction unlawful.

Whether or not a deduction is unlawful can be a huge difference in the value of a wage claim to the employee. When an employer unlawfully deducts wages, the employee is due the greater of $200 or damages. Usually the damages are the amount of the deduction, but could be the value of any loss to the employee. For instance, if the employer deducts medical payments from the employee’s wages, but does not purchase medical insurance for the employee, the employee may be in a position to argue that the cost of medical appointments or procedures are their damages. Damages could also arguably include bounced check fees, late payment fees on loans, or any other damage sustained as a result of the unlawful deduction.

More often than not, the amount of the deduction is the damage. However, this is not the only wage and hour laws that the unlawful wage deduction likely causes. For instance, if the employee works at or near minimum wage, the wage deduction may cause the employee to be paid less than minimum wage. This may entitle the employee to a civil penalty under Oregon wage and hour laws. Minimum Wage Page. The Oregon minimum wage civil penalty can equal a maximum of 30 days of wages.

Another Oregon wage and hour law that may be violated by an unlawful deduction is the failure to pay all wages timely upon the ending of employment. Under ORS 652.140, an employer must pay all final wages at the end of employment within a specific time period depending upon how the employment ended. Late Pay Page. Like the minimum wage civil penalty, where an employer fails to pay final wages timely, the employee is due up to 30 days of penalty wages. The penalty wages are calculated by multiplying the regular hourly rate by 8 hours per day for up to 30 days. So an employee earning $15 per hour could receive up to $3,600 for the late payment wage claim under Oregon law.

Google By David Schuck