Categories
FLSA Overtime/Wage & Hour

Warehouse Workers Not Entitled to Overtime for Security Screens

On December 9, 2014, the United States Supreme Court handed down its long awaited decision in Integrity Staffing Solutions, Inc. v. Busk.  That case involved warehouse workers at various Amazon.com facilities. Those workers were required to pass through a security screening after their shift ended. They were not paid for the time that they had to stand in line. The amount of time that took is disputed. The Company said it wasn’t very much. The employees claimed that it was an extended period of time.

The employees lost at the trial court level, but the United States Court of Appeals for the Ninth Circuit reversed. They ruled that time spent in security screenings to guard against employee theft qualified as compensable time under the Fair Labor Standards Act.

The United States Supreme Court disagreed. In a unanimous opinion authored by Justice Thomas, the Court explained:

We hold that an activity is integral and indispensable to the principal activities that an employee is employed to perform – and thus compensable under the FLSA – if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities. Because the employees’ time spent waiting to undergo and undergoing Integrity Staffing’s security screenings does not meet this criteria, we reverse the judgment of the Court of Appeals.

At first blush, this opinion seems a little unfair. Why should an employee not be paid for standing in a line that the employer forces them to stand in? It is important to remember that fairness is not the test. The issue is whether it is compensable under the Portal-to-Portal Act, which was an amendment to the FLSA. As a general rule, time spent traveling to and from work is not compensable. However, is important to understand the limits of this holding.

This case does not overrule the “continuous work day rule.” Under this rule, an employee is entitled to all of his time spent between the first principal activity and the last principal activity. Therefore, even under the Supreme Court’s decision, time spent in security screenings would be compensable if the employees had performed some work-related activity prior to going through them. Therefore, if they had had to attend meetings, fill out paperwork, or do some other clearly compensable work activity, they would be paid for going through the screenings.

Nevertheless, the unfairness of this decision is striking. It could produce draconian results. What if an employer forces employees to stand in a one-hour line? What if they force them to take a two- hour bus ride? These extreme categories clearly cry out for Congressional action, which is probably not forthcoming.

Categories
FLSA Overtime/Wage & Hour

SNL NOT LAUGHING: NBC UNIVERSAL PAYS $6.4 MILLION TO SETTLE WAGE AND HOUR CLAIM BY INTERNS

There are more tears than laughs at Saturday Night Live these days. NBC Universal paid $6.4 million to settle a claim by interns who worked on a variety of shows, including SNL. This follows a $110,000 settlement from the producers of the Charlie Rose Show, which also compensated interns for the work they performed.

 In the current job market for college students and new graduates, employers often use the economy as an opportunity to get free work. The Fair Labor Standards Act (FLSA) is clear that most unpaid internships are flat out illegal. If an employer gets the benefit of work from an employee, then the employee probably has to be paid.

Categories
FLSA Overtime/Wage & Hour

Increase in Salary Basis for Overtime

The Fair Labor Standards Act requires that most employees be paid 1 ½ times their regular rate of pay when they work over 40 hours in a work week. There are a number of exceptions to this, including the so called “White Collar Exemptions.” The White Collar Exemptions say that certain employees may be paid a set salary instead of 1 ½ times their regular rate of pay for overtime. Those regulations are complex and the subject of significant litigation.

One of the requirements for the White Collar Exemptions is that the employees must be paid at least $455 per week. This is a very modest threshold. It is less than $24,000 per year. It seems unfair that a convenience store manager could be paid $24,000 a year for 60-80 hours of work. However, this is often the case. The United States Department of Labor is taking a new look at this threshold.

The Fair Labor Standards Act gives the Department of Labor “rule making” authority to set standards in implementing the overtime provisions of the Fair Labor Standards Act. In other words, the Department of Labor can raise the minimum salary that exempt employees receive without having to go to Congress. The DOL is beginning this process. This is part of President Obama’s initiative to close the income inequality gap in the United States. The Obama administration believes that raising the minimum salary for exempt employees would put more money in consumers’ hands and help grow the economy.

It is also just the right thing to do. The idea that an employer could legally work an employee 60-80 hours per week and pay them less than $24,000 per year is morally troubling.

The following is a link to a March 13, 2014 Wall Street Journal article about these important changes:

http://online.wsj.com/news/articles/SB10001424052702304704504579434183690961244?KEYWORDS=Fair+Labor+Standards+Act&mg=reno64wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304704504579434183690961244.html%3FKEYWORDS%3DFair%2BLabor%2BStandards%2Bct

Categories
FLSA Overtime/Wage & Hour Sex Discrimination

Lilly Ledbetter’s Thoughts on the Paycheck Fairness Act

Lilly Ledbetter’s name was thrust into the public spotlight when the United States Supreme Court decided to hear her case.  To the amazement of many, she lost.  The Supreme Court held that an employer can effectively “run out the clock” on an Equal Pay Act violation.  Ms. Ledbetter was making less money than her male co-workers.  She didn’t know it.  By the time she found out, the Supreme Court said it was too late to sue.

 This led Congress to pass legislation to change the law.  The act, appropriately named the Lilly Ledbetter Act, was the first bill signed into law by President Obama.

More potential reforms are on the horizon.  The Paycheck Fairness Act would be an amendment to the Equal Pay Act and the Fair Labor Standards Act.  The law would give more teeth to the Equal Pay Act.  More about that in a later blog.  The law would also permit employees to share wage information.  This would allow them to be informed about the pay their co-workers receive.  In turn, this would make it easier to for a victim of discrimination to learn that they she was not being paid legally.

In a recent Washington Post op-ed, Ms. Ledbetter shared her thoughts on the Paycheck Fairness Act.  It’s worth a read.  Here’s the link.

http://www.washingtonpost.com/opinions/lilly-ledbetter-says-the-president-can-do-more-for-equal-pay-sign-an-executive-order/2014/01/17/3eae5e62-7e0d-11e3-93c1-0e888170b723_story.html?hpid=z3