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.

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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.

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.

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Class Action Wage Claim Attorneys.

Class Action Wage Claim Attorneys
The lawyers at Schuck Law, LLC focus their law practice on wage claim lawsuits. Our lawyers regularly prosecute Oregon minimum wage claim lawsuits.  In addition, our attorneys regularly prosecute Oregon unpaid wages lawsuits, Oregon overtime pay lawsuits, and Oregon wrongful deduction lawsuits.  Our attorneys are also experienced in prosecuting minimum wage class action lawsuits as well as other class action wage claim lawsuits. In addition to the claims for damages outlined above, an employee may also sue to recover their costs, disbursements, and attorney fees incurred in prosecution of the minimum wage claim lawsuit. This allows the attorneys at Schuck Law, LLC to take most minimum wage and other wage claim lawsuits on a contingency fee basis. This means, with minor exceptions that are within your control, that our attorneys only get paid their attorney fees if they recover wages, penalties, penalty wages, or other damages for you.

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