Category: Wage and Hour Disputes

Third Circuit Ruling FLSA Overtime Wages

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On May 23, 2016 the Third Circuit Court of Appeals held that truck drivers who mainly drove intrastate, and only incidentally or occasionally drove interstate during their business, were entitled to the benefits of the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PMWA) regarding overtime pay rates. Mazzarella v. Fast Rig Support, LLC, 823 F.3d 786 (3d Cir. 2016). Drivers for a trucking company claimed that they often worked over forty hour weeks, and yet were only compensated for overtime when they worked over forty-five hour weeks. The trucking company attempted to argue that because it was a motor carrier, under the Department of Transportation’s jurisdiction, and its business transporting water to fracking sites involved transporting an item between “a State and a place in another State” it was consequently exempt from the FLSA through the Motor Carrier Act (MCA).

The Third Circuit however rejected the trucking company’s representation and classification of the nature of its business. The Court found that the operations of the drivers in their work was not part of a “continuous stream of interstate travel” that would fall under the MCA’s exemption to the FLSA. All evidence presented by the trucking companies demonstrated that their operations only occasionally and incidentally impacted interstate commerce. Their operations that only occasionally entailed driving to other states were not part of a “practical continuity of movement in interstate commerce”. The Court ruled that exemptions to FLSA should be narrowly construed against the employer to ensure employees are properly protected. The high burden of proving an exemption to the FLSA’s overtime requirements was not met by the mere statements and unspecific evidence put forward by the company to demonstrate the interstate nature of its employees’ operations. The truck drivers’ award of $31,000 was affirmed by the Court to compensate them for the overtime worked and guarantee their protection under the FLSA.

For more information, call our Philadelphia employment lawyers at Sidkoff, Pincus & Green at 215-574-0600 or submit an online inquiry.

Supreme Court holds “Service Advisors” exempt under FLSA

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On April 2, 2018, the United States Supreme Court held that service advisors at car dealerships are exempt from the FLSA’s overtime-pay requirements under 29 U.S.C. 213(b)(10)(A). Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134 (2018). In Encino Motorcars, the Court considered the scope of the Fair Labor Standards Act (FLSA) which requires employers to pay overtime to covered employees who work more than 40 hours a week. The FLSA exempts from the overtime-pay requirements “any salesman, parts man, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. Service advisors at car dealerships “meet customers; listen to their concerns about their cars; suggest repair and maintenance services; sell new accessories or replacement parts; record service orders; follow up with customers as the services are performed and explain the repair and maintenance work when customers return for their vehicles.”

The Court held that a service advisor is “obviously a salesman”, since the statute did not provide a definition for “salesman” the court construed the term based off its ordinary meaning. The ordinary meaning of “salesman” is someone who sells goods or services. The Court concluded that service advisors sell service to customers for their vehicles. In addition, they are primarily engaged in servicing automobiles because they are integral to the process of providing maintenance and repair even if they don’t physically repair the car. The Court rejected the distributive canon employed by the Ninth Circuit to match “salesman” with “selling” and “parts man and mechanic” with “servicing”. The Court then examining the Ninth Circuits reliance on legislative history which it found unpersuasive. Even for “those [Members of the Court] who consider legislative history, silence in legislative history . . . cannot defeat the better reading of the text and statutory context.”

The Court relied heavily on the text of 29 U.S.C. 213(b)(10)(A), concluding that service advisors are exempt from the overtime-pay requirement because they are “Salesman . . . primarily engaged in servicing vehicles. The case was reversed and remanded for further proceedings.

For more information or to discuss an issue regarding overtime, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online. Our Philadelphia overtime lawyers represent clients in Pennsylvania and New Jersey.

Overtime and the Fluctuating Workweek Method

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fluctuating workweek

Calculating Overtime Using the Fluctuating Workweek Method Does Not Violate the Pennsylvania Minimum Wage Act

The Pennsylvania Superior Court recently resolved a case regarding the method of calculating overtime compensation under the Pennsylvania Minimum Wage Act (PMWA). In Chevalier v. Gen. Nutrition Centers, Inc., 177 A.3d 280 (Pa. Super. Ct. 2017) employees filed a class action against General Nutritional Centers (GNC) for unpaid overtime, specifically that GNC’s method of calculating overtime violated the PMWA. The PMWA provides that employees must be paid overtime at not less than 1½ times their regular rate for every hour worked over 40 in a workweek.

GNC calculated overtime compensation using the fluctuating workweek method (FWW). The FWW determines an employee’s “regular rate” of compensation for the workweek by dividing each employee’s pay by the number of hours the employee worked during the workweek. Therefore, employees’ regular rates fluctuated each week. GNC then paid employees at one-half of their regular rate for each hour of overtime worked. The employees argued that, (1) an employee’s regular rate should have been calculated using a fixed 40-hour workweek, not the fluctuating workweek method, and (2) the overtime pay should have been 1½ times their regular rate for each hour of overtime instead of one-half their regular rate

The Superior Court found that using the FWW to calculate an employee’s regular rate did not violate the PMWA, however, paying overtime of only one-half the regular rate did violate the PMWA. In support of the FWW not violating the PMWA the court mentioned that the Pennsylvania Generally Assembly borrowed the term “regular rate” from the Fair Labor Standards Act, which permitted the FWW method of calculation when the PMWA was enacted. In support of paying overtime of one-half the regular rate violating the PMWA the court cited a Pennsylvania regulation requiring employers to pay employees not less than 1½ times their regular rate of pay for all hours exceeding the 40 hours threshold. In conclusion, the FWW is permissible under the PMWA, however overtime must still be paid at 1½ times the employee’s regular rate.

For more information, call our overtime lawyers in Philadelphia at Sidkoff, Pincus & Green at 215-574-0600 or submit an online inquiry.

Third Circuit Defines “Willfulness” Under FLSA

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The Third Circuit Court of Appeals recently issued a precedential opinion regarding “willful” violations of the Fair Labor Standards Act (FLSA).   There is a two-year statute of limitations under the FLSA unless the violations are deemed willful, in which case there is a three- year statute of limitations.

Plaintiffs in this case were a class of part-time Lackawanna County employees who worked in two separate part-time positions. According to the Court, Lackawanna County failed to aggregate the hours of the employees for purposes of calculating overtime.    The lawsuit asserts that Lackawanna County became aware that it was violating the FLSA in 2011, and several months later, it began aggregating the hours of the employees in calculating overtime pay. During the trial, the county admitted to violating the FLSA, but argued that the violation was not willful.    The trial court determined that the defendants’ poor time keeping records amounted to willful violations of the FLSA.

The Third Circuit disagreed and reasoned that there was no evidence that Lackawanna County was specifically aware of the FLSA rule it was violating. It opined that a plaintiff must show evidence of the employer’s awareness of a violation of the FLSA overtime mandate. The Court contrasted a case of clear willful violation, wherein an employer deliberately misclassified employees for nine years, and another case where a family failed to pay its nanny minimum wage.  Here, Lackawanna County addressed the problem within a year of learning it was violating the FLSA. The Court noted that it was likely a bureaucratic failure, and not a deliberate violation.

Philadelphia Overtime Dispute Lawyers at Sidkoff, Pincus & Green Litigate FLSA Claims

At Sidkoff, Pincus & Green, we routinely represent plaintiffs in overtime and wage dispute matters. To schedule a consultation with a Philadelphia overtime dispute lawyer, call us today at 215-574-0600 or contact us online.

Third Circuit Defines “Willful” FLSA Violation

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The issue of whether an employer “willfully” violated the Fair Labor and Standards Act (“FLSA”) by failing to pay overtime wages is important because a willful violation allows a plaintiff to recover an additional year of lost wages. See 29 U.S.C. § 255(a). The question of what a willful violation is appeared recently in a Third Circuit Court decision in Souryavong v. Lackawanna Cty., No. 15-3895, 2017 WL 4159604 (3d Cir. Sept. 20, 2017). The issue in Souryavong arose because Lackawanna County failed to properly aggregate hours worked of county employees, who held two different part-time jobs, resulting in a failure to pay overtime. There was testimony on behalf of the county which said they were generally “aware” of their obligations under the FLSA, and there was also an e-mail from another county official that recognized this error in tracking time of these employees and the county took measures to address and fix the issue.

In order to find the county liable for a willful violation, the county must have known its conduct was prohibited, or “showed reckless disregard for the matter.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). Acting only “unreasonably” is insufficient—some degree of actual awareness is necessary. The Third Circuit determined that willful violations of the FLSA require a more specific awareness of the legal issue than was present in this case. The Court further explained that the county lacked a level of egregiousness, which had been found in other willful violations in sister courts. Weighing these factors together, the Court determined there was no “willful” violation of the FLSA by the county.

For more information, call our overtime lawyers in Philadelphia at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

DOL Exempt Employee Salary Rule Invalidated by Judge

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The latest development in the controversy surrounding the Final Rule, issued by the Department of Labor (DOL) that changed the salary threshold concerning which workers are eligible for overtime, is a final judgement that invalidates the rule entirely.

The Final Rule was one of the last major actions of the Obama administration and raised the salary threshold for exemption from overtime pay from $23,660 to $47,476. Before the changes could go into effect on December 1, 2016, a lawsuit filed in a Texas federal district court won a preliminary injunction against the rule, effectively blocking it. The case known now as Nevada v. U.S. Department of Labor began as two separate lawsuits. In both cases, the plaintiffs argued that the DOL had overstepped its authority by doubling the threshold of the salary test, thereby giving it too much weight and detracting from the value of the Fair Labor Standards Act (FLSA) duties test.

Judge Amos Mazzant combined the two lawsuits into one and granted the preliminary injunction. The DOL appealed his decision on December 1, 2016. Because of the election, everything was essentially on hold during the changeover in administrations. Employers and employees waited in limbo to see how the Trump administration would proceed with the issue.

On August 31, 2017, Judge Mazzant issued a final Opinion and Order in the case granting summary judgement to the plaintiffs. He declared the Rule invalid and unenforceable, stating that we would not be where we are today if the salary level had been adjusted for inflation rather than doubled by the DOL Rule. He agreed that certain salary tests are appropriate, but found that Congress was unambiguous in creating overtime exemptions based on duties and not specific salary levels.

Despite the final judgement by Mazzant, the status of the case is still in question because of the active appeal of his first injunction. The DOL has the option to appeal this ruling, but it is more likely that it will revise the rule and come up with its own update of the salary test. Last year when the Final Rule was first announced, some employers went ahead and raised managers salaries in order to avoid paying them overtime, starting December 1. Other companies waited to take action and it seems they will continue to wait for complete clarity on the issue of overtime.

Philadelphia Employment Lawyers for Fair Labor Standards Act at Sidkoff, Pincus & Green P.C. Provide Counsel on Wage and Hour Disputes

With all the current uncertainty about overtime pay, you may wonder if you are being paid fairly. The Philadelphia wage dispute lawyers at Sidkoff, Pincus & Green P.C. offer counsel for all of your legal employment needs. Call 215-574-0600 today to schedule a consultation about your case, or contact us online. From our offices in Philadelphia, we serve clients locally and throughout Pennsylvania and New Jersey.

Trump’s Labor Department Wants Salary Level to Determine Overtime Eligibility

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Recently, the Labor Department filed a brief in federal court challenging whether the Obama administration had the right to double the threshold for the maximum pay a worker can receive and still qualify for overtime. Employees who earn less than the threshold maximum salary are eligible for time-and-a-half. The Obama administration fought to double the maximum salary threshold from $24,000 to around $47,000. This would have meant that those earning less than $47,000 would be eligible for time-and-a-half if they work more than 40 hours a week. This would have resulted in four million more Americans being eligible for overtime pay.

However, last year, a federal court blocked the Obama administration’s rule. Now Trump’s Labor Department has said that it wants salary levels to count in deciding who is eligible for overtime, but it continues to hold off on the maximum pay workers can earn and still qualify for overtime. The Department expressly asked the court not to address the specific salary level set by the 2016 final rule. The Trump administration only requested a ruling on whether the department has statutory authority to set a salary level at all.

Some critics have argued that anything lower than the $47,000 suggested by Obama would adversely affect minority workers. When the Obama administration issued the rule in May of 2016, the Labor Department said that it would go a long way toward ensuring that every worker is compensated for their hard work. Supporters argue that many employees do not even realize that they are eligible for overtime pay.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green Advocate for Victims of Unpaid Overtime 

Certain employees who work more than 40 hours a week are eligible for time-and-a-half. If you have only been paid regular wages for overtime hours, you may be entitled to additional compensation. To discuss your case with a skilled Philadelphia employment lawyer at Sidkoff, Pincus & Green, call us today at 215-574-0600 or contact us online.

Court Allows CNA Overtime Case to Proceed

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The Third Circuit has affirmed the denial of a motion to dismiss or stay a lawsuit, whereby a group of certified nursing assistants (CNAs) in New Jersey allege violations of their rights under the Fair Labor Standards Act (FLSA). The CNAs, who were employed at the same skilled nursing facility, claim that they were unlawfully denied overtime pay and meal breaks. The case is now poised to proceed to trial.

The case was initially filed in 2013, when three CNAs employed at Alaris Health in Cherry Hill, New Jersey alleged that their employer’s parent company failed to pay them overtime pay, and that they were only rarely permitted to take meal breaks because the facility was so understaffed. The plaintiffs further claim that half-hour meal breaks were automatically deducted from their total hours worked, even if they were not permitted to take a break, or were interrupted during mealtimes to return to work. Their complaint also alleges that they were not being paid for overtime during weeks in which they worked more than 40 hours. The plaintiffs made these claims on behalf of themselves, as well as the entire class of CNAs employed at Alaris between 2010 and 2013.

The defendant parent company, Silver Care, asserts that the CNAs’ union negotiated a collective bargaining agreement (CBA) that requires these types of disputes to be resolved by an arbitrator. When the plaintiffs elected to file their case in federal court, Silver Care moved to dismiss.

The District Court disagreed with the defendant, finding that although interpretation of the terms of the CBA is a factual dispute, the plaintiff’s claims regarding FLSA violations did not depend on disputed interpretations of CBA provisions such that arbitration is necessary. The Third Circuit recently affirmed, also finding that the dispute did not need to be resolved through arbitration.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Represent Clients in Overtime Disputes

If you suspect that you have been wrongfully denied overtime pay, you may have a valid claim. Schedule a consultation with a Philadelphia overtime dispute lawyer at Sidkoff, Pincus & Green P.C. by calling 215-574-0600 to discuss your legal options or contact us online today.

Philadelphia’s New Wage Equity Law

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New Law Prohibiting Interview Questions About Salary History Faces Challenges

Upon the City Council’s unanimous passing of the Wage Equity Law in April 2017, Philadelphia became the first city in the United States to make it unlawful for employers to ask job applicants about their salary history as a condition of employment, or to retaliate against a prospective employee for refusing to answer questions about previous salaries. (Massachusetts and New York City also passed similar bills that have not yet been implemented). Under the new statute, job applicants who suspect a violation may file a complaint with the city Commission on Human Relations within 300 days. Those employers found to be in violation of the law by the CHR could be fined $2,000 and ordered to pay other damages, including legal fees.

The controversial new statute has already prompted litigation. Supporters of the law, including Mayor Jim Kenney, claim that it will help close the gender pay gap by preventing the carrying-over of past pay discrimination to new positions. Opponents, including business groups and companies like Comcast, argue that the regulation is harmful to business and that there is no evidence to support its proposed effects of a reduction in the pay gap.

The Greater Philadelphia Chamber of Commerce contends that the law violates employers’ free speech rights and places improper, unnecessary restrictions on interstate commerce. The Chamber moved for a preliminary injunction to temporarily block the law from being implemented in April, but U.S. District Judge Mitchell Goldberg dismissed the case for lack of standing. The Chamber filed again in June, this time identifying several specific members whose rights it claims would be violated by the law, including Comcast, Drexel University, Day & Zimmermann, and a children’s hospital, among others. The implementation of the law, which was supposed to go into effect May 23rd, is now on hold; its status resting on whether Judge Goldberg decides to temporarily block the law. Whether the Wage Equity Law survives court scrutiny and on what grounds is yet to be seen.

See Chamber of Commerce of Greater Philadelphia v. City of Philadelphia, U.S. District Court for the Eastern District of Pennsylvania, No. 17-cv-1548.

For more information, contact our Philadelphia wage dispute lawyers at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

Philadelphia Wage Dispute Lawyer: PNC Settles Class-Action Lawsuit

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PNC Bank recently agreed to pay $16 million to settle a federal class-action lawsuit filed by employees who claimed that the company discouraged them from reporting overtime and failed to pay them fairly for acquired overtime hours. The case involved 3,431 employees and mortgage loan officers employed by PNC since 2011.

Four loan officers originally filed the lawsuit in August 2015, citing a breach of the Fair Labor Standards Act (FLSA). The FLSA in part establishes overtime pay eligibility for full and part-time workers in the private sector and in local, state, and federal governments. The FLSA states that eligible employees are entitled to one and a half times the employee’s rate for each hour worked in excess of 40 per week.

One of the most common overtime violations is the incorrect classification of a worker as “exempt” or non-exempt from overtime compensation. Under the FLSA, exempt employees may include those who earn more than $23,600 per year and perform executive duties in the course of the job. Exempt employees might include those who: supervise two or more employees; perform primarily as managers; or those involved in decisions regarding other employees such as hiring, firing, and promotion. A skilled wage dispute lawyer may help you determine your eligibility for overtime pay and if you have a valid overtime dispute with your employer.

Philadelphia Wage Dispute Lawyers at Sidkoff, Pincus & Green Advise Clients in Unpaid Overtime Disputes

You may not be aware that unpaid overtime can be collected up to two years after the date that it was earned. In some cases, you may have an additional year to pursue unpaid overtime. If you are unsure about your eligibility or believe you have a valid overtime claim, contact a Philadelphia wage dispute lawyer at Sidkoff, Pincus & Green at our Center City Philadelphia offices at 215-574-0600 or contact us online.