Blanchard & Walker PLLC : Workers on a “Day-Rate” Pay System are Still Owed Overtime Pay.

“Day-rate” regulations under the Fair Labor Standards Act (“FLSA”) are very clear: “day-rate” workers” are entitled to additional pay for hours worked over forty in a week. The Department of Labor Regulation, 29 C.F.R. § 778.112, requires that when employees paid on a day-rate work more than forty hours in a week, their hourly rate is calculated by totaling all money received in the workweek and dividing by the total hours actually worked in that week. Such employees are then entitled to an overtime half-time premium for all hours worked over forty that week.

In one recently-filed Blanchard & Walker case, a client worked in construction and demolition of merchandizing fixtures for big box stores, such as AutoZone and Meijer, but she was paid only a straight day rate for each day worked.  She worked more than ten hours a day, six or seven days a week without the overtime pay required under the law. Unfortunately, this type of payroll fraud is very common.

The U.S. Secretary of Labor filed a similar case in Michigan last year, and the Federal District Court for the Eastern District of Michigan easily disposed of the restaurant owner’s defenses and granted Summary Judgment for the DOL for “day-rate” restaurant workers:

Although the FLSA does not require employers to compensate their employees on an hourly basis, “the overtime compensation due to employees must be computed on the basis of the hourly rate derived therefrom, and therefore, it is necessary to compute the regular hourly rate of such employees during each workweek.” 29 C.F.R. § 778.109. The “regular rate” will necessarily fluctuate when an employee’s hours vary. 29 C.F.R. § 778.108. In this case, Defendants paid their employees a flat day rate, regardless of the hours worked. The Secretary calculated overtime due by performing a mathematical computation to determine the “regular rate.” The Secretary used the total remuneration as the dividend, and the hours worked as the divisor, to determine the “regular rate” as the quotient. Using this calculation, the Secretary determined that Defendants failed to pay overtime at one and a half times the regular rate for any of their employees. Defendants have failed to show that the Secretary’s calculations do not comport with the strictures of the FLSA. Accordingly, Defendants’ pay practices violate the FLSA’s requirement for overtime compensation under 29 U.S.C. § 207(a) and the Secretary is entitled to summary judgment.

Acosta v. Min & Kim Inc., No. 15-CV-14310, 2018 U.S. Dist. LEXIS 9507, at *18-19 (E.D. Mich. Jan. 22, 2018)

Unfortunately, many employers violate this wage law hoping they won’t get caught on this type of payroll fraud…  and even if they do get caught, hoping that it will cost less to settle a lawsuit and pay off one plaintiff rather than changing their system and paying all workers what they are legally owed. 

At Blanchard & Walker, we fight back for the overtime right of day-rate workers. In one recently-filed FLSA collective action in the Eastern District of Michigan, the lead plaintiff came forward with allegations for herself and other similarly situated employees who also worked weeks, sometimes sixty or seventy hours, but only received a flat “day-rate” for each day worked.  Blanchard & Walker lawyers continue to investigate and talk to day-rate workers across transportation, service, and construction industries.

Blanchard & Walker PLLC: Federal Lawsuit Alleges “Day-Rate” Workers Deprived of Overtime Pay for 70+ Hour Weeks

Display Assembly Workers Deprived of Overtime Pay

“Day-rate” regulations under the Fair Labor Standards Act (FLSA) are clear: “day-rate workers,” such as retail display assembly workers, are owed an additional half-time pay for hours worked over 40 in a week.

Blanchard & Walker PLLC Payroll Fraud Case Pending: Plaintiff worked doing construction and demolition of merchandizing fixtures for DisplayMax aka FixtureMax, servicing big box stores such as AutoZone and Meijer. Even though she worked more than ten hours a day, six or seven days a week, she was paid only a straight day-rate for each day worked—without the overtime pay required by law. “Day-rate” regulations under the Fair Labor Standards Act (FLSA) are very clear: “day-rate” workers are entitled to an additional half-time pay for hours worked over forty in a week. Plaintiff in the federal court lawsuit alleges she is owed the FLSA-mandated half-time premium for all overtime hours, and brought the case so that all similarly situated employees of DisplayMax and FixtureMax will have an opportunity to opt-in and recover the overtime pay legally owed to them. Blanchard & Walker lawyers are currently taking calls with impacted workers to investigate the scope of the pay practices at issue.

Bonus reading: The Case for Good Jobs

Class Action Certified in Hungry Howie’s Pizza Delivery Driver Lawsuit

Pizza Drivers claim franchises take an illegal  slice out of every driver’s pay

Under-reimbursement of pizza delivery drivers violates state and federal minimum wage laws – that’s the allegation in a Blanchard & Walker PLLC case recently certified for class action status in the Eastern District of Michigan (read the order here).  [Read more…]

New Rules for FLSA Overtime Exemptions

JNew Rules for FLSA Overtime Exemptions oin attorney David Blanchard next Monday October 10, 2016 (12-1:30 PM) for  an Overtime Compliance Panel Focusing on the New Salary Level Rule.  We still have some spaces left but it is filling up quick.  RSVP to Kelley at lindquistk@ewashtenaw.org or 734-994-4912 by 4 p.m. on Friday, October 7th

 

The panel discussion and Q &A session following will focus on the Department of Labor’s new salary level increase for overtime exempt employees.   [Read more…]

Fighting for Independent Contractors

Clocking ovvertime

Clocking overtime for independent contractors.

Blanchard & Walker lawyers have been fighting for over a decade to secure the rights of cable technicians and other laborers who have been deprived of overtime pay by the use of “independent contractor” labels.  Still, we are amazed by the depth of the problem and astonished to hear how extreme and widespread the abuse of “independent contractor” classifications has become.   Writing for Slate, author Virginia Sole-Smith has done an excellent job to document the scope and extent of predatory misclassification of employees.  Thank you to Virginia for explaining the human toll behind these practices.

http://www.slate.com/articles/business/the_grind/2016/04/more_cable_and_internet_installers_are_independent_contractors_and_the_hours.html

With one swift re-classification, the otherwise “employers” are able to reduce costs related to unemployment insurance and workers’ compensation, and even avoid obligations to pay overtime. Or so some would assume. In fact, the protections of the FLSA are not dependent on the company’s discretion in picking job titles. Persons designated as “independent contractors” and other workers wrongly deprived of overtime pay have a legal right to recover the wages stolen through illegal misclassifications by their employers. [Read more…]

Sixth Circuit Trend Shows Preference For Jury – and not Judge – to Decide FLSA Overtime Claims

Blanchard sixth circuit

By: David Blanchard, Blanchard & Walker PLLC, Ann Arbor, MI

The Sixth Circuit federal appeals court has spoken, and “independent contractors” or other workers who may be deprived of overtime pay under the Fair Labor Standards Act (FLSA) should be pleased to hear the news. A recent trend of decisions in the federal appeals court for the Sixth Circuit (covering Michigan, Ohio, Kentucky and Tennessee) affirms a clear right to jury trial, and against judicial rulings to dismiss, to decide overtime compensation claims. Under the FLSA, non-exempt employees are entitled to overtime pay at “time and a half” for all hours worked in a week.[i] The FLSA overtime law applies regardless of contract provisions or other agreements the employer has tried to impose (including “independent contractor” labels the employer might insist upon as a condition of employment). Recent published cases in the Sixth Circuit lend encouragement for workers seeking overtime pay and a note of caution for trial judges who may be inclined to issue summary dismissals. [Read more…]

FLSA Employees vs. Independent Contractors under DOL Administrative Interpretation AI 2015-1

Blanchard FLSAThe Fair Labor Standards Act (FLSA) has been the law of the land since it was first ushered through congress by President Franklin Roosevelt almost eighty years ago.  The FLSA promised a fair day’s pay for a day’s work, and required overtime pay at time and a half for working more than forty hours a week.  Yet for the last two decades, federal courts have struggled with the scope of the FLSA protections as the “outsourced” labor model has become more prevalent in the domestic economy.  In the fractured labor market -as it has been called – companies have increasingly used workers defined as “independent contractors” to perform their core business functions.   With one swift re-classification, the otherwise “employers” are able to reduce and avoid costs related to unemployment insurance, workers compensation, and even avoid obligations to pay overtime… or so some would assume. The protections of the FLSA are not dependent on the company’s discretion.   So-called ‘independent contractors’ and other workers deprived of overtime pay have a legal right to recover the wages stolen through illegal misclassifications by their employers. [Read more…]