Overtime Lawyer Blog

The Federal Labor Standards Act (FLSA) guarantees certain minimum wage and overtime standards applicable to virtually all U.S. employers. Not covered though – the hundreds of thousands of workers who tend to the sick and elderly in their homes.
Earlier this week, Representative Linda Sanchez (D-Calif.) introduced legislation designed to change that. The Sanchez bill seeks to extend the FLSA to cover home care workers – including certified nursing assistants and home health aides – currently exempted by the FLSA. Many point to this exclusion as creating a home care workforce that earns less and works longer hours than most other professions, placing them amongst the lowest paying jobs in the county.

If afforded protections under the FLSA, home health care workers would be entitled to a federal minimum wage of $6.55 per hour and overtime at a rate of one and one half times their regular rate of pay.

The Department of Labor also seeks to address the issue of those providing home health care aid – also called “companionship services” through new regulations, and has indicated that it will issue a proposed rule in October 2011.

As Georgia attorneys dedicated to employee’s rights, we will be following these developments closely and reporting on any changes to the FLSA in this blog.

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The Fair Labor Standard Act (the FLSA) provides certain guarantees to employees such as requiring a minimum rate of pay and that eligible employees must be paid overtime at the rate of 1 ½ times their regular rate of pay.

In addition to federal law, many states have overtime laws. Often, these laws may offer greater employee protections than the FLSA, and may provide substantive and procedural advantages over the FLSA. In many cases, employees are able to choose between filing in state or federal court.

In a recent case involving California and Texas employment law, the U.S. Court of Appeals for the Ninth Circuit held that where the complained of actions arose out the nature of employment arrangement, rather than the terms of a contact, “the choice of law provision” contained in the driver’s employment agreements was not dispositive.

In Narayan v. EGL Inc., three California drivers brought a claim against a trucking company alleging that they were denied overtime pay, expense reimbursements, and meal periods required by California law. However, each of the drivers had previously signed independent contractor agreements providing that the agreements “shall be interpreted by the State of Texas.” Although the company argued that Texas law must apply, the Ninth Circuit disagreed, reasoning Texas choice of law provisions only refer to contractual issue. Because the drivers brought their claims under “a California regulatory scheme, the court determined they were entitled to have their claims interpreted pursuant to California law.

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In a recent decision, the Second Circuit determined that Novartis Pharmaceutical Corps representatives were not covered by the “outside sales” exemption under the Fair Labor Standards Act and hence, were entitled to overtime pay.

Pursuant to the FLSA, employees who are not exempt must be paid at a rate of one and one half times their regular rate of pay for all hours worked in excess of 40 hours in any workweek.

One of the biggest issues to arise under the FLSA is whether the work you do is considered “exempt.” Generally, exemptions under the FLSA fall into three main categories – executive, administrative, and professional.

In Novartis, the company asserted that the representatives were covered by the administrative exemption as outside sales employees. Under the FLSA, an “outside salesman” is an employee whose primary duty is make sales or “obtaining order of contracts for services.”

Judge Amayla L. Kearse, writing for the U.S. Court of Appeals for the Second Circuit disagreed, reasoning that although a pharmaceutical representative may be “actively engaged in persuading physicians to prescribe a drug” the reps were not specifically making sales. As a result, the reps did not fit within the “outside salesman” definition and were not exempt. Judge Kearse noted that although her interpretation differed from other federal district courts’, it more closely followed the Secretary of Labor’s interpretation of this provision.

Further, Kearse noted that the skills characterized by the company as evidence of the reps’ exercise of discretion were actually developed and/or honed in Novartis training sessions. These skills were not evidence of independent thinking and judgment, but rather actions further bolstering the reps’ claims that their work was strictly controlled by the company.

Determining whether a particular job is covered by the FLSA can be confusing. As this case demonstrates, even federal courts may disagree on what job duties are considered exempt.

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A Minnesota court recently determined that a pizza delivery driver for “Domino’s Pizza” is similarly situated with nearly 22,000 current and former delivery drivers. As a result, the Domino’s employee may bring his claim on behalf of the nearly nationwide class that Domino’s violated the Fair Labor Standards Act (FLSA) by not paying its drivers the federal minimum wage.

The current federal minimum wage is $6.55 per hour, although in a few states – unfortunately not Georgia – the minimum wage is higher.

In Luiken v. Domino’s Pizza, the court reviewed whether a compensation scheme that was based certain factors such as drivers’ fuel economy, maintenance, operating and other fixed costs but did not reimburse for actual delivery costs ended up paying drivers less than the federal minimum wage. In 2009, the delivery driver filed a suit on behalf of current and former delivery drivers from 2006 to the present for unpaid wages and liquidated damages.

Domino's argued that the drivers’ reimbursement rates varied by region and should not be allowed to proceed as a class. The court disagreed, concluding that all drivers were subject to the same nationwide policy. The court also stated that it was exercising its discretion to provide notice to all potential class members due to the large size and geographic scope affected.

Often a company may follow a policy that on its face seems fair, but in practice violates the FLSA – either by denying its workers minimum wage or all overtime compensation due. In Luiken, the policy in question met federal minimum wage standards on its face, but on closer look, the actual wages earned fell below the minimum wage requirements.

Continue reading " Dominos Pizza Delivery Drivers Similarly Situated Under The FLSADominos Pizza Delivery Drivers Similarly Situated Under The FLSA " »