Tag Archives: wage and hour

How to Determine Whether a Worker is an On-Call Employee

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Far too often, employers find themselves in the position of unknowingly violating the law as it relates to compensating their employees. Similarly, it is critical for employees to understand what their rights under federal and state law and how much they should be earning. Unfortunately, the complicated and often dynamic nature of federal and state law can render understanding labor law exceedingly challenging for both employers and employees. One such complex issue is determining whether a worker should be compensated as an on-call employee.

On-call time is where an employee is not technically working but is still compensated because he or she is considered to be “on-call.” Determining whether an one should be classified as an on-call employee can be challenging insofar as it is a query that is dependent on a number of very specific variables. Indeed, making this issue even more difficult is the fact that there is no bright line rule for determining whether an on-call employee must be paid for on-call time.

Both federal (FLSA) and state (NYCRR) law call for employees to be compensated while they are on-call at their place of employment or at a place required by the employer. What happens however, when an employee is not required to be in a certain place while on-call. The answer in part, is dependent on for whom the employees use of time benefits. In other words, who benefits more from the time the employee spends on-call, the employee or the employer. This is not a straight forward inquiry, however. Moreover, this is not the only inquiry that is necessary to determine whether an employee should be compensated for time spent on-call. This determination turns on several other significant variables.

If you have questions regarding on-call time, or other labor and/or employment law related questions, call Gilbert Law Group today at (631)630-0100, and speak to one of our qualified and knowledgeable attorneys.

2d Circuit Court Issues Blueprint for Avoiding Misclassification; Business Owners Classifying Workers as Independent Contractors

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The United States Court of Appeals for the 2d Circuit recently issued a decision that could potentially save certain business owners both money and stress. The 2d Circuit, which encompasses the states of New York, Connecticut, and Vermont, in a recently decided case (Saleem v. Corporate Transportation Group, Ltd.) provided guidelines for employers as to whether their workers are employees or independent contracts. The issue of classification of workers as an employee or independent contractor is significant. For example, an independent contractor is exempt from minimum wage and overtime requirements. Further, such a classification can have significant tax consequences for a business. The above-referenced case clarifies longstanding issues regarding classification workers as employees or independent contractors. The hope is that the by issuing said guidelines, the Court will help employers avoid troublesome allegations of misclassification.

The case involved a driver service and its workers. Corporate Transportation Group and its affiliate companies (CTG) run a black-car service in the New York City area. The Company requires its drivers to sign a contract that acknowledged they were “not an employee or agent” of the company “but merely a subscriber to the services offered” by CTG. The drivers filed a class action lawsuit against CTG seeking unpaid overtime pay pursuant to the federal Fair Labor Standards Act (FLSA) and New York state wage and hour law.

In its decision, the Court established a three pronged analysis for determining whether a worker is an independent contractor or an employee. The Court initially noted that any independent contractor misclassification dispute arising under the FLSA must be examined under an “economic realities” test. The Court then listed the following three factors to be crucial to its decision:

  1. The Drivers Had Entrepreneurial Opportunities Not Available to Employees;
  2. The Drivers Made A Heavy Investment In Their Business and;
  3. The Drivers Maintained A High Level Of Flexibility.

The Court cautioned however, that its ruling was based on the fact-specific “totality of the circumstances” comprising the relationship between CTG and the drivers in this specific case. “In a different case, and with a different record, an entity that exercised similar control over clients, fees, and rules enforcement in ways analogous to CTG might well constitute an employer within the meaning of the FLSA.”

As a result it is clear that each case is to be determined on a case by case basis. Further, there is a lot of gray area as to how each of the above-referenced guidelines may be applied to difference business. Each case can turn on several variables. It is always best to consult an experienced employment attorney. If you have questions regarding employee or independent contractor classificication status, or are facing potential misclassification issues, call Gilbert Law Group today at 631.630.0100.

New Developments of the Minimum Wage in New York State

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Since 2009, the federal minimum wage has been at $7.25 per hour. Recently however, New York State has made significant changes regarding the minimum wage, increasing it from $8.75 to $9 per hour. Further, under the new law, the minimum wage at fast-food chains with at least 30 locations nationwide, will continue climb in incremental steps. Its initial increase occurred on December 31, 2015. It is also required that employers  post a Minimum Wage Information poster at their workplaces.

Moreover, the State has established a separate pay rate for fast-food workers in large chains. In response, restaurant owners have challenged the Department of Labor’s wage order, arguing it to be ‘arbitrary, capricious and contrary to law. At the time of this publication, the issue is pending before the court.

Bigger increases will be granted to tipped workers in New York. The hourly minimum wage will rise from $4.90, $5 or $5.65 to $7.50 an hour for tipped workers, such as waiters, depending on the type of establishment. State employees not working in New York city are seeing an increase to $9.75 while the minimum wage for workers in New York City is now $10.50. At fast-food chains with 30 or more restaurants nationally, workers’ wages will increase from $8.75 to $9.75. The chart below depicts the current minimum wage for the city, New York State as well as future scheduled increases.

DATE NEW STATE WAGE NEW YORK CITY WAGE
Today $9.75 $10.50
January 1, 2017 $10.75 $12
January 1, 2018 $11.75 $13.50
January 1, 2019 $12.75 $15
January 1, 2020 $13.75 $15
January 1, 2021 $15 $15

Employers and business owners should fully understand these new laws and regulations, particularly whether they are in compliance. Failure to do so could lead to significant liability. Should you have questions or concerns regarding these developments to the minimum wage, or related matters, please call Gilbert Law Group at 631.630.0100.

Contributed by Sakine Oezcan, Esq.

Department of Labor Issues New Worker Misclassification Guidelines: Whether a Worker is an Employee or Independent Contractor?

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The Department of Labor (DOL) has issued new guidelines, Administrator’s Interpretation 2015-1 detailing its interpretation of the “economic realities” test as it relates to the misclassification of workers. The guidance expands on the six factors in the test, emphasizing that the main issue is whether the worker is “economically dependent on the employer or truly in business for him or herself.” The vague definition of “employ” found in the Fair Labor Standards Act (FLSA) combined with the totality of the circumstances considered in the test means that most workers are considered employees, the DOL commented. The expansive reading of what constitutes an employee will likely generate an increase not only in DOL oversight but worker lawsuits as well. The DOL has been cracking down on worker misclassification by issuing severe penalties on employer’s who label a worker as an independent contractor rather than an employee for the consequential tax benefits. So how does one determine whether a worker is an employee or independent contractor?

“In sum, most workers are employees under the FLSA’s broad definitions,” the DOL said. “The very broad definition of employment under the FLSA as ‘to suffer or permit to work’ and the Act’s intended expansive coverage for workers must be considered when applying the economic realities factors to determine whether a worker is an employee or an independent contractor. The factors should not be analyzed mechanically or in a vacuum, and no single factor, including control, should be over-emphasized. Instead, each factor should be considered in light of the ultimate determination of whether the worker is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus its employee). The factors should be used as guides to answer that ultimate question of economic dependence.”

The six factor test is complex, and many times whether a worker is an employee or an independent contractor can turn on several variables. For help navigating through issues related to worker misclassification and whether a worker is an employee or independent contractor, call Gilbert Law Group today at (631)630-0100.

Department of Labor Proposes to Double Income Level for Salaried Employees to be Exempt From Overtime and Minimum Wage

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On July 6, 2015, the U.S. Department of Labor announced its proposal to double the income level required for an employee to be exempt from overtime and minimum wage requirements. It is important to note that this is merely a proposal, and not an official rule. But it demonstrates how serious the DOL is as it relates to updating the exemptions. Also it should put employer’s on notice to pay attention as these changes could significantly impact business of all shapes and sizes.

Under the new proposal, the minimum weekly salary for exempt employees, presently $455 per week or $23,660 per year (http://www.dol.gov/whd/overtime/fs17a_overview.pdf), would increase to the 40th percentile of weekly earnings for full-time salaried workers in the United States, estimated to be $970 per week or $50,440 per year in 2016. Further, the minimum annual salary required for the Highly Compensated Employee exemption, presently $100,000 per year (http://www.dol.gov/whd/overtime/fs17h_highly_comp.pdf), would increase to the 90th percentile of weekly earnings for full-time salaried workers in the United States, which is currently $122,148; and these compensation requirements would automatically increase annually in the future based on a yet to be determined formula. The DOL also announced that it is considering, revising the job duties required for exempt employees, and whether non-discretionary bonus or incentive pay should be considered toward the minimum salary requirement for Highly Compensated Employees.

If you have any questions or concerns regarding how these changes can impact your business, call Gilbert Law Group today, (631)630-0100.

Changes to FLSA Executive Overtime Exemption Could Mean Significant Raises

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Many executive and professional employees who have been exempt from federal minimum wage and overtime regulations may soon qualify to be compensated for overtime. Indeed, the low salary requirement for the executive overtime exemption may soon be a thing of the past. In late November, the Department of Labor released its Fall 2014 Agency Rule List. President Obama has made clear his intention to modernize and streamline FLSA regulations for executive, administrative, and professional employees. The FLSA provides for overtime exemptions (and minimum wage exemptions, in some cases) for employees who are employed in a bona fide executive, administrative or professional capacity, or in the capacity of an outside salesperson. Soon, if employers wish to avoid paying overtime to their executive, administrative, or professional employees, they may have to increase their salaries significantly.minimum wage and overtime

The updated regulations will increase the $455 minimum weekly salary threshold for exempt executive workers. At $455/week, workers earning just $24,000 annually currently meet the minimum salary requirement. The White House has said that just 12% of salaried workers now fall below this threshold, compared to 65% in 1975 when the regulations set a $250/week minimum.  New York already requires employers to pay higher minimums to meet the exemption ($600 in New York, increasing to $675/week by 2016). It has been reported that the Obama administration is planning on setting the minimum salary for the overtime exemption at $42,000 per year (just over $800/week).

A substantial increase even to the anticipated $42,000 would have the most impact on production, service and retail industries that have substantial numbers of low paid supervisors.

To learn more about what this means for your business or compensation package call Gilbert Law Group today: (631)630-0100.

Gilbert Law Group – 425 Broadhollow Road, Suite 405, Melville, New York 11747

Waiting to Work or Waiting to Leave: Paid Time?

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The decades-long battle for pay during down time or time employees prepare to work, wait to work, or wait to leave work continues. Whether working to wait before leaving for the day or waiting to work before clocking in are instances of paid time is the issue. U.S. Supreme Court justices expressed doubts recently during arguments over whether federal law requires that workers be paid for the time they take to go through security checkpoints to prevent employee theft at Amazon. Previously, the Supreme Court held that employees must be paid for the time they take to put on protective gear, but not for the waiting time associated with taking it off. Also, the Court has ruled that butchers must be paid for the time it takes to sharpen their knives as it is an essential duty to working at a meatpacking plant.

This most recent dispute involves two former employees at a Nevada warehouse who claim that their employer, Integrity Staffing Solutions, Inc., required them to wait up to 25 minutes in security lines at the end of every shift. Integrity provides workers who fill customer orders for Amazon at warehouses. The intermediate appeals court had ruled that the work was payable as the anti-theft screenings were necessary to the workers’ primary work at the warehouse, and it was done for the employer’s benefit. However, certain Supreme Court justices disagreed with the workers’ attorney who argued that the work was compensable under the Fair Labor Standards Act (FLSA), as walking through security was a principal activity of the employees’ job duties.

Chief Justice Roberts responded, “But no one’s principal activity is going through security screenings.It may be part of that… but that doesn’t make it a principal activity.” Justice Scalia opined that the security check “is not indispensable to [the warehouse work].” In reply, the workers’ attorney argued that the screening was a “discrete act” that only occurred after the workers had clocked out and handed in their tools. He stated, “It’s work because you are told to do it.”

The Obama administration is siding with the employer. The Justice Department attorney argued that the security screenings were not “integral and indispensable to the workers’ jobs.”

It will be interesting to see how the Supreme Court decides this hot-button workplace wage issue. Stay tuned.

Should you have wage and hour questions or issues, please contact the Gilbert Law Group: 631.630.0100.