State and Federal Wage-and-Hour Protections

1. The Federal “Fair Labor Standards Act” The Fair Labor Standards Act (“FLSA”) is a Federal law that applies to the entire nation. State laws can add to your protection, but cannot lessen your protection. The FLSA requires that covered employees be paid at least a minimum wage of $5.15 an hour, whether or not the job is “exempt” from overtime requirements (meaning that the employer does not have to pay overtime to these employees) or “nonexempt” from overtime requirements (meaning that the employer does have to pay overtime to these employees). The FLSA requires that “nonexempt” employees be paid time-and-a-half their regular rate for working more than 40 hours a week.

• Jobs that can be exempt from the overtime requirements include managers who actually perform managerial duties, administrators, learned professionals, and similar people.
• There are also specific exemptions, such as the “outside sales” exemption and jobs that are covered by the Motor Carrier Act.
• Just being paid a salary does not make your job exempt from the requirement that overtime be paid time and a half.
• Exemptions are fairly technical, and legal advice is important. Do not make your own decision whether you are covered by an exemption.

Federal law does not require employers to pay employees their regular rate of pay unless overtime is involved.

Federal law does not require that you be paid for all the time you work

• unless the result is that you lose overtime, or
• unless your total compensation, divided by your total number of hours worked, is less than the minimum wage.

The employer is legally required to pay minimum wage and overtime for all work time if the employer knew of the work, or should have known of the work, and allowed the employee to perform the work.

The U.S. Department of Labor files lawsuits against employers for violating the FLSA, and obtains money for employees, but does not act as the attorney for the employees and is under no obligation to get full monetary relief. The tax holidays passed by Congress have left the Department of Labor - like all government agencies - without all the funds needed for full enforcement activity. As a result, many employers can cheat their employees without much fear of governmental enforcement.

• You can protect your own rights: However, you do not need to rely on the government. You can file your own lawsuit, with your own choice of attorney, and have control over the lawsuit.
• The Time Limits are Important: Relief is automatically available for violations within two years before the case or consent form was filed in court. The longer you wait, the less relief you can get from the defendant.
• If the Employer’s Violation is “Willful”: Relief is available for violations within three years before the case or consent form was filed in court. The longer you wait, the less relief you can get from the defendant.
• What does “Willful” Mean: The Supreme Court has held that a violation is “willful” if plaintiff proves “that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.”
• Double Damages in Many Cases: If the defendant cannot prove a “good faith” defense, lost earnings are usually doubled as “liquidated damages.” The FLSA has been around since 1938 - for about seven decades, now - and it is hard for employers to prove the good faith defense.
• A Union’s Blessing Does Not Protect the Company: Some collective bargaining agreements contain provisions for payment that violate the FLSA. Unions do not always have the assistance of lawyers in negotiating contracts, and sometimes management can slip something by. In any event, unions do not have the legal authority to give up the rights of employees under the FLSA, so these violations are still violations and can be challenged in court.
• Attorneys’ Fees: If you are paying attorneys’ fees as the case goes along and if the case is won or settled, the court has the power to order your employer to pay attorneys’ fees, in an amount the court will set. You can get a partial or total reimbursement for what you have paid your attorney. Most clients cannot afford to pay attorneys’ fees as the case goes along, however. As a result, most plaintiffs’ attorneys work for a percentage of the total recovery, and the fees and expenses paid by the employer under a court order reduce the cost to the employees and leave them with more money.

The FLSA provides only limited protections. Unfortunately, neither political party is trying to cure the imperfections of the FLSA. In States that have enacted laws protecting workers, some of these problems can be cured by suing under State laws.

The FLSA does not provide any remedy when an employer does not pay an employee the agreed hourly rate, unless it affects overtime compensation or unless the total compensation goes below the minimum wage. So an employer may get a person to work for it by promising to pay $10 an hour, work the person for 40 hours in a week, pay the person $206 at the minimum wage of $5.15 an hour for 40 hours instead of the agreed $400, and the FLSA provides no remedy.

The FLSA does not provide any remedy when an employer does not pay an employee for all the time the employee worked, unless it affects overtime compensation or unless the total compensation goes below the minimum wage. So an employer may agree to pay an employee $10 an hour, schedule the employee to work from 9:00 A.M. to 5:00 P.M. five days a week with an unpaid one-hour lunch from noon to 1:00 every day, for 35 hours of work a week, then assign them so much work they have to work through their lunch breaks while eating at their desks, pay them $350 for the week, and get $50 worth of work for free. The employer has stolen $50 from them, but the FLSA provides no remedy.

The Department of Labor can kill a private lawsuit simply by filing its own lawsuit. That may have made sense back in 1938 when the law was passed and there were few lawyers willing to represent workers, but it makes no sense today. The Department of Labor cannot kill claims under State law.

The Department of Labor can ask a court to enter an order (“injunction”) requiring cheating companies to change their ways, establishing a monitoring system, and punishing them for contempt of court if they go back to their old ways. The FLSA does not allow any private plaintiff to obtain an injunction. That may have made sense in 1938, but almost every other law protecting employee rights and allowing private lawsuits also allows employees to obtain an injunction. Some State laws allow a private plaintiff to get an injunction.

Where each individual’s injuries are too small to justify the expense of a separate lawsuit for that individual, the only way to enforce employee rights is to bring a lawsuit that gets relief for a large number of employees.

Most wage and hour cases fit this model, because cheated employees may only lose a few hundred or few thousand dollars a year. When depositions can cost a thousand dollars a day and a lawsuit can require hundreds of attorney hours, and experts have to be retained and paid, the only practical way to get justice is to sue on behalf of a lot of workers in the same case.

Unlike virtually every other law protecting employee rights, however, the FLSA does not allow class actions. Its substitute is a “collective action,” in which relief can be obtained only for those employees who file a “consent form” in court.

• This is bad, because many employees are afraid of retaliation, and will not file these forms at the start of the case. Routinely, only one out of six employees “opt in” by filing their consent forms, and no relief is obtained for the other five. A class action under State law can eliminate this problem.
• This is also bad, because every employee can have a different time limit, depending on when they file their consent forms. John Jones may be able to go back to June 1, 2003, but Sharon Smith can only go back to August 3, 2003, and Mary Smith goes all the way back to May 25, 2003. It gets complicated. By contrast, in class actions the original filing stops the clock running for everyone. A class action under State law can eliminate this problem.
• This is also bad because it greatly increases the number of employees who have to be cheated before it makes economic sense for them to file a lawsuit. If the level of cheating requires the losses of a hundred employees to be at stake in order to justify a lawsuit, and if only one out of six employees is expected to “opt in,” there have to be 600 victims to start out, instead of 100, to justify a lawsuit. A lot of cheaters can get away with violating the FLSA because of this defect. A class action under State law can eliminate this problem.

These are the reasons why I look for State laws to fill in the gaps in the Federal laws, and why I look for good attorneys in that State to arrange a formal association with them for the case.

3. State and Local Wage and Hour Laws

Some - but not all - States have laws requiring payment of a minimum wage and requiring payment of overtime. Many of them adopt the FLSA requirements and exemptions. As with the FLSA, plaintiffs have to prove that the employer knew of the work, or should have known of the work, and allowed the employee to perform the work.

State laws can add important protections, where they exist. Not all States have a minimum wage law, or an overtime law. Most States have wage payment laws, which can often be used to enforce an employer’s promise to pay a specific hourly rate, or to pay overtime for more than 40 hours’ work in a week.

• Class action treatment is normally available for claims under State and local law.
• Some State wage and hour laws have longer periods of limitations, so a remedy can reach violations years farther back than the FLSA. For example, New York has a six-year period of limitations.
• Some States have wage payment laws, requiring employers to pay the agreed rate of pay for all time worked. Some of these laws provide for double or triple or quadruple damages, and an award of attorneys’ fees. Where the State does not have a wage payment law, a contract claim can be made for the lost pay, but this would normally not include a penalty or an award of attorneys’ fees.
• Some States provide remedies when employees are forced to work through paid rest breaks.
• Some States can bring their own enforcement proceedings. However, most State tax laws are geared to the Federal tax laws, so Federal tax holidays have starved State agencies, as well as Federal agencies, of the resources needed to do their jobs. This has left many workers without government protection. The only alternative is private lawsuits.

Important Information From The Association of Trial Lawyers of America