Articles Posted in Wage and Hour Disputes

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clock-time-calendar-agenda-163200Federal and state employment laws in New Jersey protect workers’ right to overtime compensation. Employers can violate employees’ rights under these statutes in a variety of ways, the most obvious of which involves a requirement to work extra, unpaid hours. Violations can occur whenever an employee’s total compensation for a pay period does not include the overtime rate of time-and-a-half. Some employees work at multiple locations, which might be owned and operated by different companies. If the two companies have sufficient ties to one another, they could be deemed “joint employers,” who must collectively provide overtime compensation to that employee. A collective action currently pending against a New Jersey hospital and other defendants includes this allegation. Layer v. Trinity Health Corp. et al, No. 2:18-cv-02358, complaint (E.D. Pa., Jun. 6, 2018).

The federal Fair Labor Standards Act (FLSA) requires employers to pay overtime compensation to non-exempt employees, at a rate of one-and-a-half times their regular wage for any hours in a week over forty. 29 U.S.C. § 207(a)(1). The statute identifies numerous exemptions, including people who work “in a bona fide executive, administrative, or professional capacity.” Id. at § 213(a)(1). Non-exempt employees are, very broadly speaking, hourly workers who do not hold a managerial position. Employees may file suit against their employers for alleged violations of overtime rules on their own behalf, or on behalf of “themselves and other employees similarly situated.” Id. at § 216(b). A claim brought on behalf of other employees is known as a “collective action,” and is similar in many ways to a class action.

Employees can work for more than one employer. For many people, holding down more than one job is an unfortunate necessity. In most cases, the two employers are legally separate from one another, and are only obligated to pay an employee overtime if their total time working for that employer exceeds forty hours. Two or more employers may, however, be deemed “joint employers,” meaning that they are jointly liable for overtime compensation when an employee’s total work time at any of their locations exceeds forty hours in a week. The determination of whether employers are “joint” or not “depends upon all the facts in the particular case.” 29 C.F.R. § 791.2(a). If an employee’s work for one employer “is not completely disassociated” from their work for another employer, all of their work for the two employers could be “considered as one employment for purposes of the [FLSA].” Id.
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Hurricane Sandy on October 29, 2012Business laws in New Jersey and around the country protect corporate directors and officers from personal liability for most actions undertaken by the business. Courts will only “pierce the corporate veil” and allow suits against individual directors or officers in limited situations, such as illegal conduct by those individuals. In the context of employment, some statutes allow claims against individuals, while others do not. A putative class action alleging violations of a New Jersey wage law sought to hold individual directors liable along with the employers. A federal court, while allowing the lawsuit to proceed against the business entity defendants, ruled that New Jersey’s Prevailing Wage Act (PWA) “does not impute personal liability.” Palmisano, et al v. Crowdergulf, LLC, et al, No. 3:17-cv-09371, mem. order at 1 (D.N.J., May 29, 2018).

The PWA “establish[es] a prevailing wage level for workmen engaged in public works.” N.J. Rev. Stat. § 34:11-56.25. “Public works,” as defined by the statute, includes most construction and maintenance work performed under government contract, or performed on government-owned property. Id. at § 34:11-56.26(5). The “prevailing wage” is the rate paid in accordance with collective bargaining agreements in force in the geographic area of the public work. Id. at § 34:11-56.26(9). Workers must be paid, at minimum, the current prevailing wage, which may vary based on location, type of work, and other factors. If an employer pays a worker less than the prevailing wage rate, the worker may file a private cause of action to recover amounts owed to them. Id. at § 34:11-56.40.

The defendants in the Palmisano case include corporations and limited liability companies that entered into contracts with the State of New Jersey for cleanup work after Hurricane Sandy. The hurricane caused extensive damage to the mid-Atlantic region in late October 2012. It made landfill in New Jersey on October 29, killing thirty-seven people, damaging or destroying nearly 350,000 homes, and causing an estimated $30 billion in damage. The state entered into contracts with companies from all over the country to repair the damage.

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airport cartA group of baggage handlers employed by a major airline at Newark Liberty International Airport enjoyed a victory in their wage lawsuit recently, when a federal judge granted their request for class certification. Ferreras, et al. v. American Airlines, Inc., No. 2:16-cv-02427, opinion (D.N.J., Mar. 5, 2018). The plaintiffs allege that the defendant violated the New Jersey Wage and Hour Law (NJWHL) by requiring them to work during times when they were “off the clock.” The lawsuit originally asserted causes of action under both the NJWHL and the federal Fair Labor Standards Act (FLSA). Airline employees are specifically exempted from the FLSA’s minimum wage provisions, but they are covered by the NJWHL.

Both federal and state laws require employers to pay overtime compensation to non-exempt employees for work performed in excess of 40 hours in a week, at one-and-a-half times the regular hourly rate. See 29 U.S.C. § 207(a)(1), N.J. Rev. Stat. § 34:11-56a4. Ideally, employees submit time sheets showing the total amount of time worked, and for any time worked over 40 hours per week, the employer pays them time-and-a-half. In reality, however, some employers require “off the clock” work, meaning employees must perform job-related services during time that is not included on their time sheets. If the total compensation received does not reflect the total amount of time actually worked, the employer could be liable under the FLSA or the NJWHL.

A wide range of jobs are exempt from the FLSA’s minimum wage and overtime provisions. Perhaps the best-known of these exemptions is for those who work “in a bona fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1). Some jobs are only exempt from the overtime requirement. This includes “any employee of a carrier by air subject to” federal legislation. Id. at § 213(b)(3). The NJWHL only exempts “employee[s] of a common carrier of passengers by motor bus.” N.J. Rev. Stat. § 34:11-56a4. While the statute does not define “motor bus,” it has been construed not to include airplanes.

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Jets cheerleadersProfessional football presents multiple legal issues related to employment. New Jersey officially has no team in the National Football League. That said, both of the New York-based NFL teams, the Giants and the Jets, have used stadiums in Northern New Jersey as their home fields since the early 1980s. Issues affecting players in the NFL, particularly the lasting effects of concussions and other injuries, have received media attention in recent years. NFL cheerleaders have also made a variety of complaints regarding wages, working conditions, and sexual harassment. In 2016, the New York Jets settled a New Jersey wage and hour lawsuit filed on behalf of a class of NFL cheerleaders. In 2018, a former cheerleader, who had recently been fired by another team, filed a sex discrimination complaint with the Equal Employment Opportunity Commission (EEOC).

While NFL players usually receive generous salaries under contracts with their teams, cheerleaders are often paid far less and do not have the protection of a defined term of employment. NFL cheerleaders have recently made several successful wage claims. A lawsuit filed in New Jersey in 2014, Krystal C. v. New York Jets LLC, alleged that the compensation received by members of the Jets’ cheerleading squad, when compared to the number of hours they were required to work, was often substantially less than minimum wage. Cheerleaders were paid $150 per game and $100 for appearances at team-sponsored events, but not for other required activities like practices and rehearsals. The parties entered into a settlement agreement in 2016, in which the team agreed to pay $325,000 to the class of plaintiffs.

Claims of sex discrimination involving NFL cheerleaders have not received as much attention in the court system as wage claims. Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination prohibit discrimination on the basis of sex. Cheerleading, as an occupation, presents some challenges in this area. Technical skill, including proficiency in dance, is not the only requirement for the job of cheerleader. To put it bluntly, cheerleaders are expected to meet a particular standard of physical attractiveness.

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Restaurant BillThe Fair Labor Standards Act (FLSA) establishes a nationwide minimum wage, which has been $7.25 per hour since 2010. This does not apply to all workers, however. The minimum wage that employers of tipped employees, such as restaurant servers, must pay is considerably less than $7.25 per hour, with the understanding that tips received from customers will at least make up the difference. In late 2017, the U.S. Department of Labor (DOL) proposed a rule that would give employers more control over the distribution of tips, which met with considerable criticism. In March 2018, a member of the House of Representatives from Connecticut introduced the Tip Income Protection (TIP) Act of 2018. While this bill has not advanced, a similar measure made it into the Consolidated Appropriations Act (CAA) of 2018, which was signed into law on March 23. This effectively rendered the proposed DOL rule moot.

A “tipped employee,” under the FLSA, is someone who, in the course of their job, “customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t). Employers are obligated to pay tipped employees a base rate of $2.13 per hour. Id. at § 203(m)(1), 29 C.F.R. § 531.50(a). If the amount of tips received by a tipped employee, when added to this base income amount, is less than $7.25 per hour, the employer must pay the employee the difference. 29 U.S.C. § 203(m)(2). The statute allows tipped employees to pool their tips, but employers may not require them to do so. A New Jersey wage and hour lawyer can help you bring a claim if your employer instituted an improper tip pooling program.

In December 2017, the DOL published a proposed rule that would remove restrictions on employers’ control over tips paid by customers, essentially allowing them to require tip pooling. 82 Fed. Reg. 57395 (Dec. 5, 2017). The DOL claimed that this would allow a more fair allocation of tip income among employees, including cooks and dishwashers who do not ordinarily receive tip income. Since the proposed rule would only apply to employers that already pay tipped employees at or above the minimum wage, critics alleged that the rule would allow employers to pocket any tip income above the minimum wage threshold. The proposed rule received more than 218,000 comments from the public.

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Summer Intern SessionInternships often allow students to gain “real world” experience before entering the job market, but they have been a subject of controversy in the area of employment law. New Jersey labor law provides a statutory test for determining when an individual may be considered an intern, who is not necessarily protected by state wage and hour laws, and when they are an employee who should receive a paycheck. N.J.A.C. § 12:56-2.1. The federal Fair Labor Standards Act (FLSA) does not expressly define the difference between an intern and an employee, so the job of interpreting the statute goes to the Wage and Hour Division (WHD) of the U.S. Department of Labor. In January 2018, the WHD issued Field Assistance Bulletin No. 2018-2, which sets forth a new test for determining, in claims involving federal law, when an intern is actually an employee.

The FLSA governs the payment of wages to employees and the hours they may be expected to work, including provisions for minimum wage and overtime compensation. It defines an “employee” as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). The statute’s equally unhelpful definition of “employ” is “to suffer or permit to work.” Id. at § 203(g). It does not provide a definition for “intern” or “internship.” The commonly accepted definition of an internship is a temporary position that allows a student to gain experience in a particular field. The actual job description of an internship varies widely from one industry and one company to another. Interns in one company might spend much of their days getting coffee and running other errands, while interns in another company might gain hands-on experience in the profession of their dreams. Internships are often unpaid, based on the rationale that interns gain experience and connections that will help them start their careers.

The WHD established a six-part test for determining whether an individual is an employee under the FLSA in 2010 in a document entitled Fact Sheet No. 71. While the WHD has since updated that sheet on its website to reflect the new test, some court decisions evaluating the old test include its original text. The test considered whether the internship (1) was similar to instruction the intern would receive at school, (2) primarily benefited the intern rather than the employer, (3) did not displace existing workers, (4) provided “no immediate advantage” to the employer from the intern’s activities, (5) included no promise of a permanent job, and (6) involved an understanding between both parties that no wages were to be paid. Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 534-35 (2d Cir. 2016). An intern is not an employee if all six questions are answered in the affirmative.

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calendarEmployment statutes at the federal and state levels require New Jersey employers to pay a minimum wage to their employees, and to pay overtime to many employees for work performed in excess of 40 hours per week. The federal Fair Labor Standards Act (FLSA) sets a nationwide minimum wage and rules for employees who are entitled to overtime pay. The New Jersey Wage and Hour Law (NJWHL) establishes similar standards within the state. If an employer fails to meet its legal obligations to pay regular and overtime wages, these statutes allow employees to bring lawsuits to recover back pay and other damages. Two recently filed New Jersey overtime lawsuits allege non-payment of wages by a major retail company. Baccicheti v. Urban Outfitters, Inc., No. 2:17-cv-10919, complaint (D.N.J., Nov. 3, 2017); Trapp v. Urban Outfitters, Inc., No. 2:17-cv-11067, complaint (D.N.J., Nov. 3, 2017).

As a general rule, the FLSA requires employers to pay non-exempt employees a rate of one-and-half times their regular wage for any hours worked in a week beyond the usual 40 hours. 29 U.S.C. § 207(a)(1). The statute includes numerous exceptions and exemptions from the overtime requirement, including anyone “employed in a bona fide executive, administrative, or professional capacity,” outside salespeople, certain agricultural employees, newspaper employees, and others. Id. at § 213(a). While it is impossible to generalize, it is probably fair to say that most “non-exempt” employees who are entitled to overtime pay are paid by the hour and work in a position that is subordinate to management.

Employers are prohibited from violating the overtime rules established by the FLSA. Id. at § 215(a)(2). The statute allows for fines of up to $10,000 and up to six months’ imprisonment for wage and hour violations, id. at § 216(a), although employees are often more interested in getting paid by their employers than punishing them. In addition to imposing administrative penalties, the FLSA allows employees to recover unpaid wages, liquidated damages in an equal amount, and equitable relief such as reinstatement or promotion. Id. at § 216(b).

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stethoscopeOvertime laws have many exceptions and exemptions, but even when an employee is indisputably entitled to overtime, disputes may also arise over what, precisely, constitutes “work time” for which the employee is owed compensation. A New York appellate court recently ruled on this question with regard to home care attendants who do not reside with their clients but who work 24-hour shifts. Andryeyeva v. New York Health Care, Inc., 2017 NY Slip Op 6421 (N.Y. App., 2d Dept., Sep. 13, 2017). While the industry standard does not require employers to pay home care attendants for time spent sleeping or eating, the plaintiffs alleged that this practice violated a state regulation regarding non-residential employees. The court ruled that non-residential home care attendants are entitled to pay for sleep and meal periods. Another New York appellate court reached similar findings earlier this year in Tokhtaman v. Human Care, LLC, 2017 NY Slip Op 2759 (N.Y. App., 1st Dept., Apr. 11, 2017). These decisions do not directly affect New Jersey wage and overtime disputes, but they could have some impact in the future.

The Fair Labor Standards Act (FLSA), the New Jersey Wage and Hour Law, and other statutes require employers to pay non-exempt employees time-and-a-half for hours worked in excess of 40 hours in a week. Neither statute provides a specific definition of “hours worked.” The FLSA includes “hours worked” in the section providing definitions. Rather than defining the term, however, it merely notes that time spent performing certain tasks “at the beginning or end of each workday” might not count as “hours worked” if excluding this time is part of a collective bargaining agreement. 29 U.S.C. § 203(o). Unpaid time spent changing into or out of a uniform or other required work clothes is a common basis for overtime claims.

The plaintiffs in Andryeyeva and Tokhtaman provide in-home care to elderly individuals and individuals with disabilities. They do not provide “residential” or “live-in” care, meaning that they have their own separate residences. They often work long shifts, however, lasting 24 hours or longer. During that time, they are often able to sleep and eat meals, but they must remain with or near the client. The question presented in both cases was, essentially, whether sleep and meal time counts as “hours worked.”

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volunteersNew Jersey employment laws protect workers’ rights in multiple areas, including wages and hours of work, discrimination and harassment, and retaliation for reporting suspected wrongdoing by an employer. Many of these laws apply specifically to “employees,” but no single definition of “employee” exists. Some statutes only cover paid employees, while others also apply to independent contractors, unpaid interns, or volunteers. The legal status of unpaid workers, including both interns and volunteers, has been the subject of multiple court battles. The New Jersey Appellate Division recently held that the state’s whistleblower statute, the Conscientious Employee Protection Act (CEPA), does not apply to unpaid volunteers. Sauter v. Colts Neck Volunteer Fire Co. No. 2, No. A-0354-15T1, slip op. (N.J. App., Sep. 13, 2017). In light of this decision, it is worth reviewing how various employment statutes in New Jersey view unpaid volunteers and interns.

“Volunteer” Versus “Intern”

Some laws make a distinction between volunteers and interns. Generally speaking, an internship provides some form of educational benefit to the worker, possibly including course credit at an educational institution, and it may be paid or unpaid. Even when an internship is unpaid, the worker is considered to gain an educational benefit. A volunteer position, on the other hand, is usually undertaken for primarily altruistic reasons, or at least without the expectation of any specific return.

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businesswomanFederal overtime rules seek to ensure that workers receive fair compensation for excess time spent working. Not all employees are entitled to overtime pay under the Fair Labor Standards Act (FLSA). Employees must be vigilant in identifying attempts by employers to avoid paying overtime, such as misclassification of employees under an FLSA exemption. In 2014, the Obama administration requested a review of certain FLSA overtime exemption categories, in an effort to bring them in line with the modern workplace. After the U.S. Department of Labor (DOL) published a final rule, a group of state governments and business groups filed suit and obtained a preliminary injunction. Nevada, et al. v. U.S. Dept. of Labor, et al., No. 4:16-cv-00731, mem. op. (E.D. Tex., Nov. 22, 2016). Now, a group of workers in New Jersey have filed a putative class action testing the scope and extent of the injunction. Alvarez, et al. v. Chipotle Mexican Grill, Inc., et al., No. 2:17-cv-04095, complaint (D.N.J., Jun. 7, 2017).

The FLSA requires employers to pay workers at least “one and one-half times the regular rate” for work time during any week that exceeds 40 hours. 29 U.S.C. § 207(a)(1). Some employees are exempt from this requirement, however, including anyone who works “in a bona fide executive, administrative, or professional capacity.” Id. at § 213(a)(1). The statute does not define “executive, administrative, or professional” (EAP), so the DOL developed definitions in 29 C.F.R. Part 541. These definitions have undergone multiple revisions since the FLSA was first enacted in 1938, most recently in 2004.

A memo issued by the White House in March 2014, addressed to the Secretary of Labor, sought “to modernize and streamline the existing overtime regulations for [EAP] employees.” 79 Fed. Reg. 18737 (Apr. 3, 2014). The DOL published a Final Rule in May 2016, which was scheduled to go into effect on December 1 of last year. 81 Fed. Reg. 32391 (May 23, 2016). Several months later, 21 states and a number of business groups filed suit against the DOL over the new rule.

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