Unpaid Overtime

Federal Court in Tennessee Allows Racial Discrimination Case to Move Forward

June 4, 2014 | Parks, Chesin & Walbert

A federal court in Tennessee granted in part and denied in part an employer’s motion for summary judgment in a case involving racial discrimination and unpaid wages.

In Davis v. FedEx Corporate Services, Inc., Rosie Davis was an African American who began working for FedEx in 1989. Beginning in 2003, she began working as a Marketing Coordinator, considered to be a nonexempt position, which means that she was entitled to overtime pay for hours exceeding eight in one day, or 40 per week. However, Davis believed that she was performing the duties of an Associate Marketing Specialist, an exempt position with higher pay.

Davis made a complaint in 2010 that she was working “out of class,” and her coworkers testified that she had performed significant managerial tasks, including training numerous colleagues and conducting meetings. FedEx then performed a job reclassification audit, which included an interview with Davis, review of her performance appraisals, and discussion with her supervisor. Davis detailed the extent of her job duties, and the investigator appeared surprised by the scope. Even so, Davis learned later that month that her job would not receive a reclassification because her work was primarily administrative. The conclusions were based on findings that Davis had never run a meeting and her statements were highly exaggerated.

Federal Judge in Georgia Denies Conditional Class Certification in Unpaid Overtime Case

May 24, 2014 | Parks, Chesin & Walbert

A federal judge in Georgia recently denied a plaintiff’s motion for conditional certification of a class-action lawsuit over wage and hour violations.

In Wallace v. Norcross Associates, LLC, the plaintiffs sought unpaid overtime wages under the federal Fair Labor Standards Act (FLSA). Alvina Wallace and the other litigants were sales associates or sales representatives employed by Norcross Associates, a telemarketing business that sold long-term telephone service contracts for providers like Verizon. During their employment, Wallace and the others worked on various sales campaigns geared toward business and residential customers. In return, they received payment along several different compensation schemes, including hourly pay, hourly pay and commissions, commissions only, commissions with $10 per hour recoverable draw, and an increasing hourly rate based on the total number of products and services sold.

Under these schemes, Wallace was employed from April 2007 until March 2012, during which time she was compensated at an hourly rate, an hourly rate plus commissions, and commissions only with a $10 per hour recoverable draw. Other litigants were paid on a commissions-only basis with a $10 per hour recoverable draw or an hourly basis plus commissions. All involved claimed that they regularly worked more than 40 hours per week but were never paid overtime. They also argued that their employer never paid them all of the commissions that they earned. Their employer, for its part, claimed that it had paid the litigants for all of their time. Nonetheless, Wallace and the other litigants sought FLSA section 216(b) class status.

Federal Court in Georgia Denies Motion to Dismiss in Wage and Hour, Sexual Harassment Lawsuit

May 17, 2014 | Parks, Chesin & Walbert

A federal court in Georgia recently denied a motion to dismiss in a case where an employee alleged wage and hour violations and sexual harassment.

In Malphurs v. Cooling Tower Systems, Inc., Amanda Malphurs worked at Cooling Tower Systems in an hourly position from November 2011 to May 2012. Her duties included working in her employer’s warehouse, posting cooling tower lines and other equipment for sale on an auction website, and doing other office work. During this time, Malphurs was allegedly denied overtime compensation for her work beyond eight hours in the day. At the same time, she was allegedly exposed to “frequent, ongoing, and continuous harassing conduct of a sexual nature” by Joe Coates, the sole owner of Cooling Tower Systems. He would require Malphurs to work long hours late into the day allegedly so they could be alone, and when Malphurs requested overtime pay, he refused to compensate her unless she acquiesced to his sexual demands.

Malphurs frequently asked Coates to stop his harassment, but Coates ignored her. As he was her sole boss, she could not turn to anyone else to discipline or terminate him. Finally, unable to cope with the situation any further, Malphurs quit.

Waiving Overtime Rights

January 2, 2013 | Parks, Chesin & Walbert

While a 40 hour workweek is considered standard practice in the United States, many employees often go above and beyond the call of duty in an effort to meet deadlines, make a positive impression, or get ahead. According to the Fair Labor Standards Act (FLSA), employers are obligated to provide overtime pay for employees that work an excess of 40 hours in a workweek. This right to overtime pay cannot be waived through any announcement made by the employer or by any agreement made between the employer and employee.

Overtime and the Fluctuating Workweek

July 18, 2012 | Parks, Chesin & Walbert

Under the Fair Labor Standards Act, nonexempt employees are entitled to overtime at a rate of one and one-half times their regular hourly rate for hours worked in excess of 40 per week. However, it is possible for a nonexempt employee to be paid on a “salary” basis, in which case the employee may receive only one-half times the regular rate for hours worked in excess of 40 per week. This method is called the “fluctuating workweek” (or “flex-pay”) method of calculating overtime (though sometimes it is unfortunately referred to as “Chinese Overtime”). The premise of flex-pay is fairly straightforward: because a nonexempt employee received a salary as compensation for all hours worked, the employee has already been paid all wages at the regular rate for all hours worked, including hours worked over 40. Accordingly, only the additional half-time overtime rate is owed for hours worked over 40. Flex-pay gets its name(s) because, when an employee is paid on a salary basis, the regular rate will fluctuate based on the number of hours worked. Notably, the more hours an employee works, the lower the regular rate (and the overtime rate) will go. Consider the following examples:

Salaried employees don’t get overtime, right?

June 12, 2012 | Parks, Chesin & Walbert

It is a common misconception among employers that simply paying a salary avoids the burden of paying overtime wages. Failing to properly classify salaried employees can have devastating consequences, including liability for unpaid overtime wages for highly compensated employees who routinely work well over 40 hours per week.