Fair Labor Standards Act (FLSA)

If an employee underreports his time—and his employer knows about it—can the employer use that conduct to get around liability for unpaid overtime under the FLSA?

Posted on February 6, 2015

What if an employee does not keep accurate time records in violation of company policy? Is an employer able to shift the blame onto the employee for any resulting unpaid overtime? In a recent decision from the Eleventh Circuit Court of Appeals, the court found that if the employer knows that the employee is underreporting his time in this way, it cannot rely upon his failure to comply with company policy regarding time records as a defense to a FLSA claim. Bailey v. TitleMax of Georgia, Inc., No. 14-11747 (11th Cir. January 15, 2015).…

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Court Refuses to Approve Settlement of FLSA Collective Action

Posted on January 16, 2015

One of the unique features of a FLSA action is that any settlement must be approved by the court. At times, this can prove challenging for parties who must not only figure out how to satisfy one another, but how to make sure the court can also get on board with the settlement. In a case recently decided in the Western District of Missouri, the district court refused to approve a FLSA collective action settlement between a group of loan officers and a bank. Branson, et al. v. Pulaski Bank, No. 4:12-CV-01444 (D. Mo. Jan. 12, 2015).…

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Supreme Court Rules in Favor of Employer as to What is Compensable Time

Posted on December 19, 2014

In March, we reported that the United States Supreme Court had granted cert in a case involving the question of whether time spent by employees working for Amazon.com in security checks at the end of their shifts was compensable under the Fair Labor Standards Act (“FLSA”). On December 9, the Supreme Court issued its ruling in this case and decided that the time that the workers spent waiting to undergo and then undergoing the security screenings was not compensable under the FLSA. See Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. ___ (December 9, 2014).…

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Former Bank Executive Prevails in Suit Regarding Severance Payment

Posted on December 12, 2014

Last month, Judge Poston of Norfolk Circuit Court ruled that the former President of Shore Bank and Executive Vice President of Operations for Hampton Roads Bankshares, was entitled to $655,495.43 in severance pay, plus interest, despite the defendants’ arguments that they were prohibited from making this type of golden parachute payment as a recipient of Troubled Asset Relief Program (“TARP”) funds and that Shore Bank did not owe Harvard the severance because his base salary was paid by a holding company previously created by Shore Bank. The court further awarded the plaintiff attorneys’ fees in the amount of $155,000.…

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Eleventh Amendment Bars FLSA Claim against Supervisors at Eastern State Hospital Where Actions Inextricably Tied to Official Duties

Posted on November 21, 2014

Earlier this week, the Fourth Circuit directed the district court to dismiss a FLSA claim brought by a nurse against two of her supervisors at Eastern State Hospital, finding that there was no basis for individual liability and sovereign immunity barred the claims. Martin v. Wood, et al., Case No. 13-2283 (4th Cir. Nov. 18, 2014).…

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Tipped Employees Must Have Actual Notice of Use of Tip Credit

Posted on November 14, 2014

The tip credit permitted under the Fair Labor Standards Act (“FLSA”) has always presented challenges to restaurants and other employers seeking to apply it correctly. Last month, the First Circuit addressed the tip credit and the question of the type of notice which must be given to employees regarding its use in the case of Perez v. Lorraine Enters., No. 13-1685 (1st Cir. Oct. 1, 2014). The First Circuit ruled that constructive knowledge of the application of the tip credit is not enough, but rather employees must have actual notice that tips are to be treated as part of their wages.…

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Executive Order 13658 “Establishing a Minimum Wage for Contractors” Final Rule

Posted on October 3, 2014

On Tuesday, the U.S. Department of Labor issued the final rule that raises the minimum wage for workers on federal contracts to $10.10 an hour. The 338 page rule, which takes effect on January 1 2015, implements Executive Order 13658. The final rule provides for employers guidance as to which contracts and which employees are covered. Contractors must fulfill certain obligations to comply with the new minimum wage provisions, including recordkeeping requirements. The rule also establishes an enforcement process and will protect the right of workers to receive the new minimum wage.…

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Decertification of Nationwide Collective Action under FLSA Does Not Prohibit Plaintiffs from Seeking Conditional Certification of Statewide Collective Action

Posted on September 19, 2014

Recently, a court in the Eastern District of Virginia was faced with the question of the effect of another district court’s decertification of a nationwide collective action on the efforts of employees here in Virginia to bring a statewide collective action.  See Allen v. Cogent Communications, Inc., No. 1:14cv459 (August 28, 2014).  The employer Cogent Communications, Inc., an internet and network service provider, argued that the plaintiffs were collaterally estopped from bringing a collective action in the Eastern District of Virginia based on…

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The Fluctuating Workweek—A Working Option?

Posted on September 12, 2014

The general rule under the Fair Labor Standards Act (“FLSA”) is that non-exempt employees have to be paid for overtime at a rate of one and a half times their regular rate of pay. However, there is another option available to employers---the fluctuating workweek method, sometimes called the halftime method. If the fluctuating workweek model applies, an employee that is paid a fixed salary but has hours that fluctuate on a week to week basis is paid at an overtime premium rate of only half time, instead of time and a half. Sounds like a win for the employer, right? But employers must be careful—this model only applies in specific circumstances and if not carefully applied, an employer could end up owing big.…

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Audit Associates Properly Classified as Exempt Under FLSA

Posted on September 5, 2014

The Second Circuit Court of Appeals affirmed the district court’s award of summary judgment to KPMG LLP in the case of Pippins v. KPMG LLP, No. 13-889 (2d Cir. July 22, 2014), agreeing that because the plaintiffs were employed as accountants in a field of advanced science and learning, deployed knowledge customarily acquired by a prolonged course of specialized education and exercised independent professional discretion and judgment, they were properly classified as exempt under the Fair Labor Standards Act (“FLSA”). Although the plaintiffs argued that they were mere audit associates who performed only entry-level accounting tasks which were specifically circumscribed by their employer, the Second Circuit rejected this argument and found that these employees qualified for the learned professionals exemption.…

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