Category: FLSA

A major misconception held by many employers and employees is that any employee who receives a salary is not eligible to receive overtime pay. Although earning a salary is one of the criteria listed for each of the exemptions, it is only one of many. If all of the requirements under an exemption are not satisfied, you are not exempt, and are owed overtime pay.

In addition, if you are paid a salary from your employer, but your employer deducts your pay when you have to leave early, miss work, or are late, your employer may not be able to classify you as exempt and must pay you overtime for any time you put in over 40 hours during the work week.

The most common exemptions to overtime pay

According to the FLSA, employers are required to pay workers at least minimum wage in addition to time-and-a-half for all hours exceeding 40 hours per week. However, this standard requirement includes some statutory exemptions. The most common overtime exemptions are often referred to as the three “white collar exemptions,” in addition to the outside sales exemption mentioned below:

Professional exemption

The professional exemption relieves employers from having to pay overtime to those individuals who operate in the “learned professions.” In order to fall under this exemption, employees must qualify as follows:

• Employees must receive compensation of at least $455 per week on a salary or fee basis.
• Employees’ major responsibility must involve the performance of work that includes the application of advanced knowledge. This intimates work of a particular intellectual character involving the routine exercise of independent discretion and judgment.
• The “advanced knowledge” must be of the sort routinely obtained by a lengthy period of dedicated intellectual instruction and learning.
• The work in which the advanced knowledge is applied must be in a science such as engineering, chemistry, biology, or physics, or in what is referred to as a “learned profession” such as medicine, theology, law, or architecture.

Executive exemption

The Department of Labor (DOL) mandates that employees meet all of the criteria mentioned below if they are to qualify for an executive exemption:

• Employees must be paid on a salary basis (not fee or hourly) at a $455 minimum rate per week.
• The primary duty of these employees must be enterprise management or the management of a commonly recognized subdivision or department within the enterprise.
• These employees must have authority to hire and fire other employees, or else, their recommendations and suggestions regarding the status change of other employees (including hiring and firing) must be given particular credence.
• They must oversee and direct the work of two other full-time employees (at a minimum) or their equivalent.

Administrative exemption

According to the rules set by the Wage and Hour Division of the U.S. Department of Labor, employees’ duties qualify them under an administrative exemption from overtime pay when the following criteria are met:

• The primary job responsibility of these employees must be the performance of non-manual or office work related directly to the general business operations or management of the employer or the employer’s customers.
• The primary duty of these employees must also involve the application of independent judgment and discretion regarding significant matters within the organization.
• Employees must receive compensation on a fee or salary basis in the amount of $455 per week minimum.

Outside sales exemption

The DOL requires employees meet the following criteria in order to fall under the outside sales exemption from overtime pay:

• These employees must have the primary responsibility of acquiring sales (as the FLSA defines such) or obtaining contracts or orders for the use of facilities or services for which the customer or client will pay a consideration
• These employees must be routinely and customarily operating away from the employer’s place or place of business

No minimum salary requirement is present for this overtime pay exemption.

For all the exemptions listed above, the primary duty of the employee must meet the specific requirements of the exemption. Otherwise overtime must be paid to the employee.

If you have been misclassified by your employer under an exemption from overtime pay, our team at The Gilbert Firm can help. We have a strong reputation in Tennessee as effective employment law advocates and have successfully handled FLSA cases throughout the Southeast and beyond. To set up a free consultation about your case, call us today at 888-996-9731 or fill out our contact form. Attorney Clint Scott from our team can help you with your overtime claim. We have offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville for your convenience.

In recent years, the U.S. Supreme Court has favored the interests of businesses over their employees in matters related to the employer-employee relationship. That trend seemed poised to continue.

For this reason, it was somewhat of a stunning and welcome surprise to workers’ advocates when the Court, with an opinion by Justice Neil Gorsuch, recently handed a decisive victory to workers facing mandatory arbitration requirements.

The Supreme Court, in New Prime v. Oliveira, delivered a significant win for American workers. The Court ruled unanimously 8-0 that independent contractors who work in the transportation industry may not be compelled to enter mandatory arbitration. (Justice Brett Kavanaugh joined the Court after case arguments, and thus did not participate.) The decision gives power to hundreds of thousands of contractors to exercise collective litigation in the assertion of their rights, rather than through unjust and expensive arbitration.

You load sixteen tons; what do you get?

New Prime, a trucking company, assigned driver Dominic Oliveira the task of completing 10,000 miles hauling freight as an “apprentice driver,” which meant working for free. After he completed that requirement, the company then compelled him to fulfill an additional 30,000 miles as a “trainee.” Under that designation, he was compensated about $4 per hour.

Once Oliveira fulfilled the above-stated requirements and became a legitimate driver for the company, he was given contractor status, not employee status. Additionally, Oliveira was required to:

• Lease the truck he drove for the job – the lease was provided by a company under the ownership of the New Prime owners
• Pay for his own gas, quite often from gas pumps owned by New Prime
• Purchase equipment out of his own pocket from the New Prime store

While New Prime would typically cover these costs, it used the independent contractor designation it gave to Oliveira as a reason to subtract those expenses from his paycheck. As a result, sometimes his compensation was wiped out completely by these deductions.

In this case, the attorneys representing Oliveira successfully argued an exemption present in the 1925 Federal Arbitration Act (FAA) – the article of federal law which governs the entire issue. The exemption specifically applies to workers engaged in interstate commerce who have “contracts of employment.” The key to linking this exemption to the present-day case was the understanding that in 1925 “contracts of employment” did not exclude individuals who today are referred to as independent contractors.

How the Court was persuaded to align with transportation contractors

Through evidence provided by Public Justice and the Constitutional Accountability Center, the Court was persuaded that the word “employment” in 1925 was not intended to distinguish between “employers” and “contractors.” Justice Gorsuch, a noted textualist, examined and referred to the linguistics and word definitions in his opinion. This decision provided Mr. Oliveira, along with hundreds of thousands of contractors in the transportation industry, the opportunity to pursue their legal claims on a class-action basis and have their fair day in court.

Has a company you have provided services for misclassified you as an independent contractor, and consequently prevented you from accessing the protections available under FLSA and state laws? If so, a Tennessee wage and hour lawyer from our team at the Gilbert Firm is here to discuss and evaluate your complaint. To schedule a free, no-obligation case review with Clint Scott or a member of our team, call us today at 888.996.9731 or complete our contact form. We serve clients from our offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville, and throughout Tennessee.

California Governor Jerry Brown has signed a law that would impose partial liability on retailers for port trucking company labor violations. This represents a dramatic adjustment in the relationship between the trucking companies that deliver goods to the Los Angeles harbor area and some of the most powerful brands in the nation.

Seeking to correct the wage and benefit imbalance

The “Dignity in the Driver’s Seat” bill (SB 1402) was brought to the California Senate floor earlier in the year by Sen. Ricardo Lara. It is an effort by the state to stop the practice of what many view as driver misclassification at port complexes. Those in favor of the bill have a serious issue with how trucking companies are classifying truck drivers as independent contractors as opposed to employees. They assert that the “independent contractor” designation is a misclassification of these drivers’ actual status; that they are indeed not truly independent from the companies for which they work. As a result, according to the bill’s proponents, these drivers are being denied proper wages and benefits.

In addition, the allegations against these companies include locking drivers into truck leases that allow them minimal take-home pay and prevent them from working for other companies.

Passing partial liability onto retailers

A number of lawsuits have been filed in recent years on behalf of drivers considered “misclassified” who have sought back pay from trucking companies. The purpose of SB 1402 was to limit this practice and instead assign partial liability to retailers for hiring trucking companies that have failed to pay final judgments in connection with state employment and labor laws. Gov. Jerry Brown signed the bill into law, and it will go into effect on January 1, 2019.

Under the bill, port trucking companies will be given access to a list prepared by the Division of Labor Standards Enforcement of trucking carriers that have failed to pay final judgments. Any retailer hiring a port trucking company with an unpaid final judgment would incur liability for any future state employment and labor law violations filed against the carriers on the list.

Sen. Lara has expressed concerns that Port truckers are “working for poverty wages” while delivering goods for the world’s largest brands. He said, “Retailers have been leaders in ending exploitation in overseas factories. They can be a force in creating good jobs for American workers here at home.”

If your employer is not paying you your fair wage, you do have legal recourse. The Tennessee FLSA violation attorneys at the Gilbert Firm can help. We hold employers accountable for statutory damages, legal fees, and lost wages and benefits that are not fairly paid. To reserve a consultation with Tennessee employment lawyer Clint Scott, please call 888.996.9731 or complete our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville, for your convenience, and assist clients in Mississippi and Kentucky, as well.

Enacted in 1938, the Fair Labor Standards Act (FLSA) regulates employment issues including minimum wage, eligibility for overtime pay, record keeping, lunch breaks, and child labor standards in the private sector. It governs qualified employers in the private sector and local governments, in Tennessee, and the across the nation. The rules govern full-time and part-time employees. There are some exceptions for professional, administrative, executive, and outside sales workers. Employers often violate these laws because they think they will not be held accountable.

Examples of FLSA violations

Some common violations that Tennessee FLSA lawyers pursue on behalf of workers whose rights have been violated include:

• Trying to distinguish between approved and unapproved overtime pay. Some employers say that if the worker does not seek approval from the employer before doing overtime work, that they cannot be paid overtime rates. The FLSA does not make any distinction between approved and non-approved work. All that is required is that the employer have knowledge that the worker is doing the overtime work.
• Asserting that an FLSA exemption applies when it does not. Just because an employee does professional, executive, sales, or administrative work, does not mean they are automatically exempt from overtime benefits. Their work must comply with each and every specific FLSA statutory rule. For example, an executive employee must have the power of hiring and firing employees. The executive employee must also have a salary of at least $455 per week.
• Improperly classifying workers as independent contractors when they are employees. Generally, if an employer can control the hours and ways the worker does his/her job, the worker should be considered an employee.
• Not paying for missed lunch breaks. Just because an employee does not take lunch does not mean he/she is waiving the right to lunch break pay.
• Denying pay because the worker is doing his/her job off-site. Workers who telecommute, work on the road, or use a smartphone or laptop away from the office are entitled to overtime pay in just the same manner as if they did work at the company site.

Other employer misconduct includes failing to keep proper pay records, not keeping current with changes in minimum wage laws, and taking unauthorized deductions out of workers’ pay.

If you think your employer is not paying you all the wages and benefits you deserve, the Tennessee FLSA violation attorneys at the Gilbert Firm can help. We hold employers accountable for statutory damages, legal fees, and lost wages and benefits that are not fairly paid. To review your claim with an experienced Tennessee employment lawyer like Clint Scott, please call 888.996.9731 or complete our contact form. We have offices in Nashville, Chattanooga, Memphis, Jackson, and Knoxville.

When Andrew Puzder, President Trump’s original choice for Secretary of the Department of Labor, withdrew his name, employee rights advocates let out a collective sigh of relief. Now that the President’s newest nominee, Alexander Acosta, has been advanced to a full Senate vote, many of us are wondering exactly what his stance will be when it comes to the rights of workers, here in Tennessee and across the country.

Responses to his nomination appear mixed. Politico called him an “independent voice on a panel known for extreme partisanship,” in regards to his tenure on the National Labor Relations Board. While he is identified as a conservative, Acosta has shown that he is willing to “break rank” to side with unions, and wrote a paper in 2010 “that advocated for a more regulatory, less adjudicatory NLRB.”

In contrast, The Nation claims that Acosta is just as dangerous to workers because, the writers, feel, “his comfort with [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][President] Trump’s plans to radically diminish worker protections could harm millions of American workers.” During his hearings, Acosta repeatedly refused to answer certain questions, and often fell back to some version of “I will defer to the President” when he did respond.

Are employees at risk?

The jury appears to be out on Acosta. Though less of a firebrand than Puzder, his evasiveness during the confirmation hearings leaves some people worried, because it’s unclear whether he would engage in the robust enforcement of employee rights. President Trump eliminated the Obama-era Fair Pay and Safe Workplaces rule, “which barred companies from receiving federal contracts if they had a history of violating wage, labor or workplace safety laws.” His executive order that requires any new regulation be accompanied by two regulatory cuts could put the revamping of the overtime rules in jeopardy, too.

Based on Acosta’s testimony, it is safe to assume that, had he been confirmed as Secretary at the time, he would not have pushed back on the President’s repeal of the Fair Pay and Safe Workplaces rule. However, Acosta has “admitted the Obama administration’s revision would ‘create a stress on the system… [but] The world has gotten more expensive, and salaries have changed since 2004. If you were to apply a straight inflation adjustment, I believe the figure if it were to be updated would be somewhere around $33,000, give or take,’” as per The Hill.

Cuts in funding to the DoL could hurt people seeking jobs

Most problematic for the DoL right now, however, is the current budget proposal. The White House released its 2018 budget a few weeks ago, calling for a 21% decrease in funding for the Department of Labor. The majority of these cuts would be made to federal grant programs. This includes:

• Senior Community Service Employment Program (SCSEP) grants, which help low-income and/or unemployed seniors transition into unsubsidized jobs
• Grant funding for the Bureau of International Labor Affairs
• Job training and employment service formula grants
• Occupational Safety and Health Administration’s training grants

The budget also aims to close centers run by the Job Corps for disadvantaged youth that the White House feels are doing “a poor job educating and preparing students for jobs.”

There is no way of knowing how Alexander Acosta will react to these cuts, though his record leads people to believe he would simply accept them on move on.

No matter who is the next Secretary of Labor, the Gilbert Firm will continue to advocate for employee rights. If you have been denied overtime or fair wages, or if your rights have been violated, we can help. To schedule consultation with an experienced Tennessee FLSA attorney like Michael Russell or Clint Scott, please call 888.996.9731, or fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville for your convenience.

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