Tag: overtime

HOULIHAN’S RESTAURANT IN NEW JERSEY AND NEW YORK ACCUSED OF TIP VIOLATIONS UNDER THE FAIR LABOR STANDARDS ACT

On September 28, 2015, Secretary of the United States Department of Labor, Thomas Perez, filed a lawsuit against A.C.E. Management Group, operator of 17 Houlihan’s restaurants located in New Jersey and New York, and it’s President/Part-Owner, Arnold Runestad, for violations of the minimum wage, overtime and record-keeping requirements of the Fair Labor Standards Act (“FLSA”).

Last month, the Department of Labor issued a press release stating that its investigation revealed that the defendants unlawfully used employee tip pools by retaining a portion of the tips and also used tip pools to compensate non-tipped workers, such as custodians or kitchen workers, failed to pay overtime pay to employees for hours worked in excess of 40 hours per workweek, required employees to work “off-the-clock” and deducted money from employees’ paychecks for their meals during breaks but also charged them for those same meals.  Regional Solicitor of Labor, Jeffrey Rogoff, stated, “The severity of these violations and the number of affected workers is such that that restitution, we believe, could amount to millions of dollars.”  The Department of Labor seeks reimbursement on behalf of 1,430 current and former Houlihan’s employees.

This Firm will continue to monitor the developments in this case.

HOME HEALTH CARE WORKERS NOW ELIGIBLE FOR MINIMUM WAGE AND OVERTIME PAY

Home health care workers provide in-home care for the elderly and disabled.  These workers often work long hours under stressful conditions, and for 40 years, have been classified as exempt under the Fair Labor Standards Act’s “companionship” exemption.  President Barack Obama has long advocated for the increase in wages as well as minimum wage and overtime protections for these home health care workers.  In recent years, the Obama administration drew up regulations to extend these protections to over two million home health care workers, but the regulations were struck down by a lower court earlier this year.

Last Friday, however, a three-judge appellate court in Washington D.C. ruled that the Labor Department has the authority to eliminate the companionship exemption, thus making home health care workers eligible for minimum wage and overtime pay.  These protections would expand to home health care workers who are employed by third-party staffing agencies.  Home health care industry officials are reportedly reviewing this decision and considering their options, including Supreme Court review.

NEW YORK JUDGE GRANTS FOOD DELIVERY DRIVERS CONDITIONAL CERTIFICATION IN UNPAID WAGES SUIT

On March 5, 2015, a delivery driver for Lychee House, a Chinese restaurant located in Midtown Manhattan, filed a lawsuit against the Company for unpaid wages pursuant to the Fair Labor Standards Act and New York Labor Law.  Plaintiff, Yong Jie Li, and other drivers alleged that the restaurant failed to pay them and others similarly situated the proper overtime pay and “spread of hours” compensation.  Li stated that he worked at least 55 hours per week and received $201.00 per week.

This week, Judge Valerie Caproni of the U.S. District Court for the Southern District of New York, granted a preliminary certification of the class.  This allows the plaintiffs to continue to proceed with the case as a group and will also allow other current or former delivery drivers to join the lawsuit.

Delivery workers employed by restaurants frequently work long hours without being properly compensated.  Non-exempt delivery workers who work over 40 hours per week are entitled to overtime pay at a rate of one-and-one-half times their regular rate of pay.   Also, in New York, if a delivery driver or other non-exempt employee works over 10 hours per day, they are owed additional compensation. It is important to consult with a labor law attorney if you believe you are being denied the proper compensation for your work.

PRESIDENT OBAMA EXPANDS OVERTIME PAY LAWS

Last week, President Obama announced changes to the overtime pay laws by expanding its protection to almost 5 million workers. Currently, under the Fair Labor Standards Act, workers who earn more than $455 per week, that is, $23,660 per year, cannot make a claim for overtime pay if they work in excess of 40 hours per week. However, President Obama’s proposed rule will raise the threshold from $455 per week to $970 per week ($50,440 per year) as early as next year. Meaning, after the law goes into effect, workers who make as much as $970 per week can claim overtime wages, even if they are classified as a manager or professional.   The salary threshold has not been changed since the 1970s.

NJ GAS STATION ATTENDANTS AWARDED $5.5 MILLION IN BACK WAGES

The U.S. Labor Department reported that over 1,100 gas station attendants in New Jersey have received $5.5 million in back wages and damages over the past five years as a result of the Labor Department’s “multiyear enforcement initiative.” The Labor Department found that attendants employed by various gas stations including Shell, Exxon, BP have been denied basic minimum wage and overtime pay, in violation of the Federal Labor Standards Act. Due to its enforcement efforts, the Labor Department also reported that the industry was positively impacted in that some gas station hired more employees to avoid overtime violations, began to track hours worked, and contacted the Labor Department for help in providing training to managers on wage and hour laws.

The Fair Labor Standards Act requires non-exempt employees to be paid at the least the federal minimum wage of $7.25 per hour and over time pay of one and one-half times their regular rate of pay for hours worked in excess of 40 hours per week. The law also requires employers to maintain accurate time-keeping records and prohibits retaliation against employees who exercise their rights under the law. Most states also have wage and hour laws.

GOVERNOR CUOMO ANNOUNCES STATEWIDE EMERGENCY MEASURES TO PROTECT NAIL SALON WORKERS

Earlier this week, New York Governor Andrew M. Cuomo announced that a multiagency task force will conduct investigations of nail salons and institute new rules that salons must comply with to protect manicurists from potentially dangerous chemicals found in nail products. He also stated that, “New York State has a long history of confronting wage theft and unfair labor practices head on…and with the formation of this new Enforcement Task Force, we are aggressively following in that tradition.” Governor Cuomo vowed that nail salons that did not comply with orders to pay workers back wages, or are unlicensed, would be shut down.

Governor Cuomo’s initiative follows a two-part investigation by Maslin Nir regarding the mistreatment of nail salon workers in New York. Her report was published in the New York Times last week and has commanded attention.   The comprehensive report was a result of 13 months of researching and reporting and shed light on the unfair labor practices and mistreatment of various nail salon workers. The report exposed the stories of several immigrant nail salon workers who stated that their employers required them to pay $100 to $200 as a “training fee” just to begin working at the salon, and were not paid any wages for months, that is, until their bosses deemed them fit to earn wages. In one instance, when one worker finally was paid, she stated she was paid $30 per day. Although more experienced workers are sometimes paid more, i.e., $40-$80 per day, it still is below minimum wage due to their long working hours. Workers’ tips have also been docked by owners due to minor errors, and overtime pay is basically unheard of in this industry even though workers routinely work up to 12 hour days. Unfortunately, these stories documented in Maslin’s report are commonplace to many workers in this industry.

Maslin further reported that many of these workers endure humiliation and physical abuse by owners and are constantly video-recorded as they work. The report stated that many nail salon workers are Asian and Hispanic with limited English-speaking capabilities and are in this country illegally and are reluctant to report violations or complain because they are just happy to have a job.

The full New York Times report can be found here.

NYC RESTAURANT ORDERED TO PAY $2.7 MILLION TO 11 WORKERS

Last week, U.S. Magistrate Judge Michael H. Dolinger ordered popular Korean restaurant, Kum Gang San, to pay nearly $2.7 million in back wages and damages to 11 restaurant workers. Kum Gang San is owned by Ji Sung Yoo and is a twenty-four hour restaurant with locations in Manhattan and Queens. The court found that the restaurant exploited immigrant workers for many years and forced them to work long hours without paying them overtime pay or minimum wage and also diverted some of their tip income.

 The workers claim they were also forced to perform work for Yoo outside of the restaurant, such as picking vegetables at a farm and shoveling snow from Yoo’s driveway. The company has been found in violation of wage and hour and child labor laws in the past. In fact, the state ordered the restaurant to pay $1.95 million in damages for wages owed to 66 employees back in 2010, which still remains unpaid.

Unfortunately, wage theft is a frequent occurrence that affects the restaurant industry, particularly restaurants that employ immigrant workers. This case serves as an example of an ethnic restaurant that has been found to exploit immigrant workers.

THIRD CIRCUIT RULES THAT ARMORED CAR DRIVERS ENTITLED TO OVERTIME PAY UNDER FLSA

In a precedential ruling, the U.S. Court of Appeals for the Third Circuit affirmed the lower court’s ruling that armored vehicle driver, Ashley McMaster, was entitled to overtime pay under the Fair Labor Standards Act (“FLSA”). The Court held that the motor carrier exemption, which exempted certain drivers of commercial vehicles from overtime pay laws, did not apply to truck drivers, such as McMaster, who spent all or part of their time operating vehicles under 10,000 pounds.

The Court reasoned that the Corrections Act of 2008, which revised the FLSA, applied to the instant case. The Corrections Act states that the motor carrier exemption does not apply to drivers, driver’s helpers, mechanics, and loaders who spend all or part of their workweek operating certain vehicles weighing under 10,000 pounds. As such, the Court ruled that since McMaster spent approximately 51 percent of her time driving vehicles more than 10,000 pounds and 49 percent driving vehicles under that weight, she fell within the purview of the Corrections Act and was entitled to overtime pay for work performed in excess of 40 hours per week.

Defendant, Eastern Armored Services, Inc., argued that certain district courts have held that subjecting truck drivers to the Motor Carrier Act when they drive vehicles over 10,000 pounds and also to the FLSA when they drive trucks that weigh less “would require burdensome record-keeping, create confusion and give rise to mistakes and disputes.” However, the Court stated that this policy statement cannot overcome the “express change to the statutory scheme.” The case was remanded back to the district court for assessment of wages owed to McMaster.

This decision is significant as there have been conflicting decisions amongst district courts regarding whether overtime pay is required to be paid to commercial drivers who spend part of their time operating a noncommercial vehicle, instead of a commercial vehicle.

The case is Ashley McMaster v. Eastern Armored Services, Inc.

TGI FRIDAY’S SETTLES WITH 14 PLAINTIFFS IN CLASS ACTION SUIT

Last year, the parent company of popular restaurant, TGI Friday’s, was sued in New York federal court by restaurant workers claiming to have been shorted on wages when performing side work and “off-the-clock” work. Specifically, it was alleged that tipped workers were required to perform work during off-hours without receiving minimum wage and overtime, and management manipulated employee time records to permit “off-the-clock” non-tip producing side work such as cleaning and preparing food. Plaintiffs sought to recover unpaid minimum wages and overtime, misappropriated tips, unlawful deductions and other wages under The Fair Labor Standards Act (“FLSA”) and New York Labor Law.

Earlier this week, TGI Friday’s agreed to settle the claims of 14 members of the FLSA class. U.S. District Court Judge Analisa Torres approved of all settlements, which ranged from $2,500 to $82,000. Several other named plaintiffs and opt-in plaintiffs still remain in the case.

The case is Flood, et al. v. Carlson Restaurants, Inc., No. 14-cv-2740.

PAPA JOHN’S NEW YORK FRANCHISEE ORDERED TO PAY $2 MILLION TO UNDERPAID WORKERS

As we previously reported in October 2014, New York Attorney General Eric T. Schneiderman filed a civil action lawsuit against Papa John’s franchisee and its owner-operator for various labor law violations in New York City.

Last week, New York County Supreme Court Justice Joan M. Kenney ordered the franchisee to pay more than $2 million in back pay, interest and damages for failing to pay hundreds of delivery workers overtime pay and shaving down their hours. The five pizza restaurants subject to the court’s orders are all located within Harlem.   Earlier this year, Attorney General Schneiderman also obtained a judgment against another Papa John’s franchisee and has also reached several out-of-court settlements with other fast-food franchises, including Domino’s Pizza.