Overtime Lawyer Blog

Senate Majority Leader Harry Reid (D-Nev.) has reintroduced the Paycheck Fairness Act, a bill first introduced by then-Senator Hillary Clinton (D-N.Y.) in January 2009. The Paycheck Fairness Act would amend portions of the Fair Labor Standards Act (FLSA).

The Act has several components, including the following:

• Employers who violate sex discrimination prohibitions would be liable in civil actions for compensatory and punitive damages;
• Employers must show that any wage discrepancy is caused by a bona fide factor other than sex, such as education, training and experience, and that this factor is job-related and a business necessity;
• Anti-retaliation provisions are incorporated into the FLSA that would protect employees who have made a complaint, filed a charge or participated in an investigation of an unfair wage complaint;
• Class actions governed by the Federal Rules of Civil Procedure for violations of the Equal Pay Act are authorized; and
• Mandated training and other outreach efforts by the Equal Employment Opportunity Commission (EEOC) and the Labor Department’s Office of Federal Contract Compliance Programs on wage discrimination issues.

The Lily Ledbetter Fair Pay Act, which passed in 2009, eliminated the time limit within which an employee must file a complaint of pay discrimination as long as he or she is still on the payroll. The Paycheck Fairness Act will “”further level the playing field” by increasing damages and protecting against retaliation.

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Recently, a contractor for retailers such as Macy’s and Forever 21 reached a settlement with its employees for overtime compensation for “identifiable workers” and required the company pay for an independent monitor to oversee the company’s compliance with all workplace laws for one year.

Employees of Seventeen filed a lawsuit in July 2009 accusing the garment manufacturer and its owners of violating the Fair Labor Standards Act ("FLSA") by forcing workers to work 12-hour shifts, sometimes two or three shifts back-to-back, without overtime pay or breaks, six days a week. Other allegations include falsification of payroll and time records to hide the fact that employees were being underpaid.

Workers also accused Seventeen of creating hazardous and unhealthy workplace conditions, including unsanitary bathrooms lacking clean water or working plumbing. They further alleged that exits from the building were blocked or locked at night, making it impossible for night-shift worker to exit the building at night.

The FLSA was enacted specifically to protect against these abuses. The FLSA establishes minimum wage and requires overtime compensation be paid to workers who work more than 40 hours/week at a rate of 1 ½ times their standard rate of pay. Unfortunately, FLSA violations in the garment industry are all too common. The Department of Labor estimates that 50% of the registered garment contractors pay less minimum wage, nearly 2/3rds do not pay over-time and a third operate with serious health and safety violations.

With the downturn in the economy, the prevalence of “sweatshop” type conditions is increasing. Employers may try to avoid paying all compensation due, especially overtime, and pay less than minimum wage. Failure to do so may constitute a violation of the FLSA.

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A federal judge has recently approved a $3 million settlement in a class action lawsuit brought against Olan Mills based on violations of the Fair Labor Standards Act (“FLSA”).

In the lawsuit, 18 current and former employees alleged that Olan Mills, Inc. violated the FLSA by forcing employees to work off the clock, including performing work duties before their shifts started and after they ended, as well as being required to attend meetings without compensation. Additional allegations included the failure to pay overtime, denial of time for meals, and the withholding of wages owed to employees.

Under the FLSA, all employees who are not exempt must be paid overtime benefits at a rate of one and one half times their regular rate of pay for all hours worked in excess of 40 hours in a work week. Where non-exempt employees are expected to perform work duties during non-work hours, they must be compensated. If the additional time spent working constitutes overtime, employers must pay employees at the higher overtime rate of pay.

Here, Olan Mills denied the allegations but reached a settlement agreement through a neutral mediator. Mediation often provides a more efficient and less expensive alternative to traditional litigation.

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A New York Supreme Court judge has rejected precedent in determining that beauty salon workers may bring a claim for retaliation based on claims they were denied overtime pay.

The Fair Labor Standards Act (“FLSA”) provides that eligible employees must be paid overtime at a rate of one and one-half their regular rate of pay. Additionally, many states have overtime laws that incorporate the FLSA and may provide substantive and procedural advantages over the FLSA.

In Ji v. Belle World Beauty, the court reviewed a provision of New York’s Labor Law incorporating the FLSA with respect to overtime. Writing for the court, Judge Emily Goodman explained based on prior case law “some form of overtime compensation is appropriate.” Further, retaliation for complaining about violations of overtime law could support a violation as well. The court concluded that the previous ruling that held “there are no provisions governing overtime in New York Labor Law” misconstrued an earlier decision.

Nearly all U.S. employers are governed by the Fair Labor Standards Act. As a result, nearly all employees who are not exempt must receive overtime compensation. Although state laws may differ, employees who fail to receive adequate overtime compensation may be able to bring a claim for a violation of the FLSA or similar state provision.

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