The Ohio case, Keyes v. Car-X Auto Services, Case No. 1:2007cv00503, decided on the Plaintiff’s Motion for Summary Judgment, dealt with a “hybrid” pay plan that included commissions paid against a minimum hourly rate.

Employees of retail or service establishments are generally compensated in any one or a combination of five ways:

(1) Straight salary or hourly rate: a stipulated sum paid weekly, biweekly, semimonthly, or monthly or a fixed amount for each hour of work.

(2) Salary plus commission: a commission on all sales in addition to a base salary.

(3) Quota bonus: paid on sales over and above a predetermined sales quota.

(4) Straight commission without advances: a flat percentage on each dollar of sales he makes.
(5) Straight commission with “advances,” “guarantees,” or “draws.”

Each of these compensation plans, except for the “straight salary or hourly rate,” qualifies as “bona fide commission plans” under federal law.

Car-X had compensated Keyes and his compatriots in this way: employees were paid the greater of either the commission rate on the total gross sale of services and products attributable to the employee during a given pay period, or, alternatively, a “default” guaranteed wage rate, which was calculated by multiplying the employee’s regular hourly rate by the number of hours actually worked in a given pay period.

In this hybrid kind of plan, there would be times an employee was paid on commission and times when he or she would not.

So, at least for the purposes of this Summary Judgment motion, this court found in this case that, “the default guaranteed wage represents a salary and only that amount in excess of such constitutes the true commission portion.”

So, after the math is done, the case will be decided. If you are in this position, please contact our offices to evaluate your situation.

Not according to a federal trial court in Kentucky, which ruled against an employee who was sent to Alcoholics Anonymous meetings by his employer during off- duty time as a stated requirement of his employment. The Court based its decision on an evaluation of who benefited the most from treatment—the Plaintiff, or the Defendant.

Todd is a police officer with LFUCG. He had blacked out while at home in 2006 after drinking alcohol and taking Ambien. After Todd’s wife’s 911 call, his police department (along with the fire department) took him to the hospital, where he spent the better part of a week drying out.

As a result of the hospitalization, Todd underwent a “fit for duty” examination by a staff psychiatrist, and was ordered to attend AA meetings, undergo random testing and other monitoring, have his prescription drug intake evaluated, and quit drinking alcohol, all in order to keep his job.

In a meeting with HR, Todd agreed to follow this program, agreeing that, “his continued employment as an officer with the … [LFUCG] Division of Police … [was] contingent upon the adherence to these recommendations for the duration of his career with this government.”

The police department apparently would not allow Todd to attend AA meetings while on the clock, so he attended them on his own time.

Todd’s argument in requesting to be compensated for his time was that attendance at these meetings and psychiatric evaluations was a condition of employment, and therefore compensable. The county’s argument was that “fit for duty” does not equate to a pre- condition or an existing condition for employment, any more than lifting weights does.

The Court agreed with the defendant, holding that the AA meetings were primarily for the benefit of Todd, and not a condition of employment. Basically, the Court said that the department would run just fine without him, if he started drinking again and got fired.
Not a pretty decision for employee rights or keeping the workplace sober.

We shall see what happens in appeal.

If you have been ordered to attend a 12- step program as a condition of your employment, you may yet have a case, depending on your circumstances. Please contact our office for a full evealution of your case.

The case, BAILON v. SEOK AM#1 CORP (W.D.Wash.12-9-2009), Case No. C09-05483JRC, concerned the defendant’s requests for discovery that went to the issue of their immigration status.

The Plaintiff had sued under the FLSA for back wages. Defendant filed the usual affirmative defenses (laches, etc.), counterclaimed for indemnification from the Plaintiff, and asked for discovery based on finding out the employee’s immigration status.

The court said no to all three claims, stating: “After carefully reviewing the case law and the facts as alleged by the parties, it appears that plaintiffs’ immigration status is irrelevant to any issue in this case. While the Supreme Court ruled that immigration status bars recovery for future wages, see Hofman Plastics Compounds v. NLRB, 535 U.S. 137, 149, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002), if the wage claim involves damages for past work performed, then the immigration status of the plaintiff is irrelevant.”

Because of that ruling, the Court granted the defendant’s motion for a Protective Order to keep the defendant from discovering the plaintiffs’ immigration status.

Regarding the defendant’s attempts to recoup the costs of the action against an employee the court said: “No cause of action for indemnity by an employer against its employees who violate the Act appears in the statute, nor in forty years of its existence has the Act been construed to incorporate such a theory.”

This is a clear win for undocumented aliens who seek protection under the FLSA. If you are in this situation in the state of Georgia, you should immediately contact a Georgia employment attorney to see if this case affects your status.

The FLSA does not specifically limit the ability of an employer to deduct the cost of a uniform from an employee, nor does it require the wearing of a uniform.

If the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, it may not cut into the overtime compensation required by the Act, or affect your minimum wage.

However, if the employee were paid $7.75 per hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from the employee's wages would be $15.00 ($.50 X 30 hours).

The employer may prorate deductions for the cost of the uniform over a period of paydays provided the prorated deductions do not reduce the employee's wages below the required minimum wage or overtime compensation in any workweek.

If you are having a uniform cost deducted from your wages incorrectly, or if you have any other questions about Georgia employment law, please contact us.

The exemption, Section 7(i), applies to retail and service establishments, which are defined as "establishments, 75% of whose annual dollar volume of sales of goods or services (or of both) is not for resale, and is recognized as retail sales or services in the particular industry."

1. the employee must be employed by a retail or service establishment, and

2. the employee's regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked, and

3. more than half the employee's total earnings in a representative period must consist of commissions.

Unless all three conditions are met, the Section 7(i) exemption is not applicable, and overtime premium pay must be paid for all hours worked over 40 in a workweek at time and one-half the regular rate of pay.

The representative period for determining if enough commissions have been paid may be as short as one month, but must not be greater than one year. The employer must select a representative period in order to determine if this condition has been met.

In applying this rule, if the employee is paid entirely by commissions, or draws and commissions, or if commissions are always greater than salary or hourly amounts paid, the-greater-than-50%-commissions condition will have been met.

If the employee is not paid in this manner, the employer must separately total the employee's commissions and other compensation paid during the representative period.

The total commissions paid must exceed the total of other compensation paid for this condition to be met.

To determine if an employer has met the "more than one and one-half times the applicable minimum wage" condition, the employer may divide the employee's total earnings attributed to the pay period by the employee's total hours worked during such pay period. If the result is greater than time and one-half the minimum wage, this condition of the exemption has been met.

Obviously, the main point of interest if you are employed in this way is record- keeping. You have the absolute right to see all of your pay records any time that you want, but you also need to keep track yourself.

If you have any questions about overtime pay for a commission job, feel free to contact us.

The case, Magnoni v. Smith & Laquercia, S.D.N.Y., No. 07-9875, (9/11/09), arose under a set of circumstances that may be apart from the norm, but it is certainly informative.

She became a salaried employee with no overtime compensation in 2003. From then until she was fired in 2007, she earned around $50- 60,000 in salary, supplementing her income from the Smith firm with her independent contractor work. Her total compensation from the firm exceeded $100K, although her paralegal salary was always less than that.

Magnoni filed suit in November 2007 after her termination, asking for overtime worked from 2003- 2007.

Smith’s Motion for Summary Judgment was based upon the theory that the combination of the two incomes from the firm placed Magnoni in the highly compensated employee under the FLSA (29C.F.R. § 541.601(a)).

The court disagreed, saying that, “[T]he language of § 541.601 leaves no doubt that it applies only to an employee's total annual compensation; indeed, under the FLSA, independent contractors are exempt from overtime requirements. Therefore, Magnoni's compensation for her independent contractor responsibilities cannot be considered part of her total annual compensation as S & L's employee under the FLSA.”

The court further rejected the firm's attempts to blur the lines between her paralegal duties and duties performed for the firm as an independent contractor.

“[I]t would be antithetical to the spirit of the FLSA to consider payment received as an independent contractor to constitute “employee” compensation, particularly given the mandate that exemptions should be narrowly construed against employers,” the court said.

While there is no way to tell either how the trial will go, or how a Georgia court or whether the 11th Circuit would agree, this seems pretty strong language on this point. If you are in this position, you would do well to contact a Georgia employment lawyer.

You can read the entire case here.

Generally, the FLSA says about online training that it is not compensable if the following four criteria are met:

2. Attendance is actually voluntary. It is not considered to be voluntary if the employee thinks that the job depends on completing the training.

3. The course, lecture, or meeting is not directly related to the employee’s job. The training is considered to be directly related to an employee’s job if it is designed to make the
employee handle his job more effectively, rather than training for another job or for a new skill. It is also not considered to be job- related if it corresponds to courses offered by outside training schools; and

4. The employee does not perform any productive work while engaged in this training.

Failing to meet all of these criteria may result in the employee getting paid his or her wages for taking the class.

The opinion letter regards a case where employees were taking a two- step, voluntary training class with an equipment provider. The first step was a ten- hour online class, which the employee was supposed to do on his own, followed by the regular paid training class.

The question was: was the ten- hour prep class subject to wage payment?

The opinion letter said that the time was, indeed, compensable. The prep class met criteria 1, 2, and 4, but not 3. The letter said that the prep class was not designed to create a new skill, but to train for the current job. In addition, the prep class didn’t meet the exception for outside training class, because the class was provided by the equipment provider, and not by an outside school.

If you have been taking some training for your job, and wonder whether or not you should be paid for it, contact an employment attorney.

But there are some jobs that just don’t fit that description. There is an exception to that “constant wage” rule, but it is very narrow and very specific and needs to be in writing. It is called a “Belo Plan,” named after the Supreme Court case that allowed the exception, (Walling v. A.H. Belo Co., 316 U.S. 624 (1942)), and provides for a constant wage, even though overtime is actually worked.

But before an employer can tell you that you’re on a Belo Plan, and not collecting overtime compensation, there are a number of hoops that the employer needs to jump through.

An allowable Belo plan must be in writing, and must meet the following criteria, all of which are delineated in CFR 778 et. seq.:

* The nature of the employment must necessitate irregular hours of work. As stated in the CFR, “the nature of the employee’s duties must be such that neither he nor his employer can either control or anticipate with any degree of certainty the number of hours he must work from week to week.”
* There must be significant variations in weekly hours of work both above and below the maximum limit of 40 hours of work.
* The regular rate of pay may not be less than the minimum hourly rate.
* The employee’s regular rate of pay has to be specified, and can only include hours worked, and not any other form of compensation.
* The employer must guarantee time and one-half the regular rate for hours worked over 40.
* The maximum number of hours worked for the guaranteed compensation cannot be for more than 60 hours per week. After that, it is time and a half.

If you have any questions about this very complicated area, you should contact and employment law attorney.

Most seasonal agricultural workers are covered under two separate federal labor laws—the Fair Labor Standards Act, and the Migrant and Seasonal Agricultural Worker Protection Act. This post will cover the former; and this post covers the latter.

The two laws always need to be read together, as well as in conjunction with state laws, by a qualified employment lawyer, to determine the rights of any agricultural workers in this very complex area.

Workers employed in “agriculture”, as defined in the Act, are exempt from the FLSA overtime pay provisions. Under the FLSA, agriculture is defined as “farming and all its branches, raising livestock or poultry, and any practices performed by a farmer or on a farm as an incident to or in conjunction with such farming operations.”

An agricultural employee has been defined through decisions and regulations as a person employed in farming, by a farmer, or on a farm, although packers and processors of produce that work with multiple farms' crops are not covered by this exemption.

“Agriculture” under the Act doesn’t include work performed on a farm, such as cooking, which is not incidental to, or in conjunction with, the actual farming operation. It also doesn’t include operations performed off a farm if the employees are employed by someone else, like an agency.

There is a “small farm” exemption as well, exempting farms that employed less than 500 man- hours the year before from paying minimum wage.

Immediate family members of the agricultural employer, certain hand harvesters that are paid on a piece rate, and employees primarily engaged in range production of livestock are not covered by the minimum wage requirements.

Other exemptions the keep FLSA benefits from agricultural workers include, among others, people engaged on the range herding livestock, and anyone of any age paid in piece work.
One problem that arises in keeping track of the hours that agricultural workers are employed is when the workers are hired through an agency. In that case, both the farm and the agency need to keep employee records.

This is a very complex area of employment law. If you have any questions about it, you should contact an employment lawyer.

It seems like there are call centers, and CSR’s, everywhere in and around Atlanta, and there may be more coming, especially now that Delta has closed its India call centers.

The Fair Labor Standards Act actually has a separate set of rules for call center workers, who are defined as employees who handle telephone calls for their company or on behalf of a client from a central operating facility.

One of the things that makes call centers different under the rules is the fact that a call center qualifies for FLSA coverage based on income, not on number of employees.

According to a 2008 DOL fact sheet, if the annual dollar volume of a call center’s sales or business is $500,000 or more, and the enterprise has at least two employees, all employees of the enterprise are covered by the FLSA on an “enterprise” basis. An enterprise may consist of one establishment, or it may be made up of multiple establishments.

The FLSA also provides an “individual employee” basis of coverage. If the gross sales or volume of business done does not meet the requisite dollar volume of $500,000 annually, employees may still be covered if they individually engage in interstate commerce, the production of goods for interstate commerce, or in an occupation closely related and directly essential to such production.

Under these rules, some salaried employees may, in fact, be covered under FLSA for both minimum wage and overtime requirements.

One call center pay requirement that may be overlooked is the fact that a CSR has to be paid for all time spent in the act of employment, including time spent booting up the computer, and downloading and reading emails and work instructions.

If you’re a CSR, and you think that you’re not getting paid properly by your employer, the attorneys at Buckley & Klein can help answer your employment law questions.

There are dozens of jobs within a car dealership—from sales associate to mechanic to receptionist, and the size and types of dealerships varies widely.

Which of these jobs, and what kind of dealerships, if any, are covered by the FLSA?

An employee will be covered under Enterprise coverage, which applies to all employees of new or used automobile dealerships, if the dealership has at least $500,000 per year in gross sales. Even if it is a smaller dealership, an employee may receive FLSA coverage if the work regularly involves commerce between states ("interstate commerce") even if the employer's annual sales are less than $500,000.

Individually, there will be some major questions as to which job functions are covered under the FLSA, and, therefore, which may form the basis of a lawsuit against the dealership, and which ones are not.

Most basic hourly workers are obviously covered under FLSA, but what about the sales staff, especially if there is a draw against commission or the pay isn’t dispersed on a regularly- scheduled basis.? What about garage supervisors? Finance people who work on an hourly- vs.- commission basis?

Numerous exemptions exist which remove certain types of employees from specified requirements of the FLSA. Among those most commonly applicable to automobile dealerships is one which exempts certain sales and parts personnel, mechanics, and service writers from the overtime requirements. Another exempts certain managers and administrative employees from the minimum wage and overtime requirements.

In addition, there are certain jobs that people under the age of 18 can’t do at a dealership.

If you work for a car dealer, and have any questions about whether or not your job is covered under federal law, you should contact an employment law attorney.