Celine Dion Sued for Failure to Pay Employees Properly

In a lawsuit filed in federal court last week, a handyman who was employed by Celine Dion and her husband at their home in Florida claims that he (and other employees) didn’t receive overtime pay to which he was entitled under the Fair Labor Standards Act (“FLSA”).  Keith Sturtevant claims that Ms. Dion cheated him out of pay for several years by classifying him as a “manager” exempt from overtime pay.

Generally speaking, under the FLSA most employees must be paid at least the federal minimum wage ($7.25 per hour) for all the hours they work in each workweek, and overtime pay of one and a half times their regular rate of pay for each hour they work over 40 in that workweek.  The FLSA provides exemptions from these general rules for certain executive or management employees.  To qualify for the executive exemption, the employee must (1) be compensated on a salary basis of not less than $455 per week; (2) have a primary duty of managing the enterprise or a recognized department or subdivision of the enterprise; (3) customarily and regularly direct the work of at least two or more other full-time employees; and (4) have the authority to hire or fire other employees or have their opinion about such matters be given particular weight.

Even though he was paid a salary and had the purported title of “manager,” Mr. Sturtevant claims that he “did not have the power to hire or fire employees.”   Therefore, he claims that Ms. Dion “improperly and illegally designated him as an exempt employee ,” and that he should have been paid overtime for all the 8-20 hours he worked over 40 each week – including the “extensive tasks” he performed at Ms. Dion’s home each week.

While her heart might go on, let’s hope Ms. Dion’s failure to pay workers properly doesn’t.

Look here for more information about the overtime requirements of the FLSA and here to learn more about the exemptions from minimum wage and overtime.

Jury Awards $2 Million Verdict to Meat Processing Facility Employees

     Yesterday (9/26/2011), a jury awarded workers from multiple Tyson Foods, Inc. (“Tyson”) meat processing facilities a $2,892,378.70 verdict for uncompensated work performed before and after their shifts.  The Plaintiffs consisted of production and support employees from the Denison, IA and Storm Lake, IA facilities.  The trial took place in the U.S. District Court for the Northern District of Iowa.

     Plaintiffs claimed that the donning and doffing of hard hats, work boots, hair nets, frocks, aprons, gloves, whites, and ear plugs before or after work constituted compensable “work” as defined by the Fair Labor Standards Act (“FLSA”).  Tyson argued that these were merely “preliminary” and “postliminary” activities, for which it did not have to compensate employees. 

     The jury agreed with the Plaintiffs, and found that the preliminary and postliminary activities were compensable work under the FLSA, and, therefore, Tyson had failed to properly compensate these employees for that work.

Supreme Court Grants Greater Protection against Retaliation for FLSA Complaints

 

        The Supreme Court of the United States issued a decision today that has provided workers with added protection from employers retaliating against employees who complain about violations of the Fair Labor Standards Act (“FLSA”).  The FLSA is the federal statute that establishes employment rules and regulations (i.e. minimum wage, overtime pay, etc.). The statute also has an anti-retaliation provision that prohibits an employer from terminating or discriminating against an employee that has “filed any complaint” alleging violations of the FLSA, testified or is going to testify, or served on an industry committee. In the suit of Kasten v. Saint-Gobain Performance Plastics Corp., Kasten alleged that Saint-Gobain violated this FLSA provision by terminating him for verbally complaining to company officials about not being compensated for time spent donning and doffing mandatory protective gear and walking to work areas between the timeclocks and the changing rooms. Before being granted certiorari by the Supreme Court, the Western District Court of Wisconsin first ruled that Saint-Gobain had violated the FLSA by failing to compensate its employees for time spent donning and doffing protective gear, but ruled unfavorably as to Kasten’s retaliation claim. The District Court concluded that only written complaints were covered under the FLSA’s anti-retaliation provision. On appeal, the Seventh Circuit also agreed with the District Court’s interpretation of the FLSA. However, upon review of the suit, the Supreme Court clarified that the FLSA anti-retaliation provision encompassed both written and oral complaints. The Supreme Court explained that, among other things, limiting the definition of “filing a complaint” to only written complaints completely undermines the purpose of the anti-retaliation provision, which is to forbid “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers,” 29 U.S.C. §202(a).

        This decision is a huge win for all FLSA covered employees and is another step in the right direction toward ensuring a better and more equal workplace.

Tyson Foods Workers Awarded Jury Verdict in FLSA Lawsuit

 

           A jury in the U.S. District Court for the District of Kansas awarded over $500,000 to a class of meatpacking plant employees on Thursday (3/17/11). The collective action lawsuit sought to recover earned wages and overtime pay for workers at a Tyson Foods, Inc. meat processing facility located in Finney County, Kansas. The workers alleged that they performed several duties throughout their shifts for which they were not paid, such as changing into the required protective work uniforms and safety equipment (work pants and shirts, hard hats, safety boots, hair nets, etc.), and substantial walks to and from the changing area, work areas, and break areas. In awarding a verdict in favor of the plaintiffs, the jury found that Tyson Foods, Inc. violated both the Fair Labor Standards Act (“FLSA”) and the Kansas Wage Payment Act (“KWPA) by failing to compensate their Finney County employees for all hours worked.

            Owners of these types of facilities have historically been the subjects of litigation under the FLSA and state wage acts when they engage in miserly pay practices, such as trying to save money by not compensating employees for time spent donning and doffing protective gear and the subsequent walks to their workstations. Generally, if an employee performs a task that is primarily for the benefit of the employer, then the employee must be compensated for that time. Also, under the “continuous workday rule”, once an employee has engaged in such a principal activity, the employee’s workday has begun. Therefore, if the donning and doffing of protective gear is substantial enough and considered a principal activity primarily for the benefit of the employer, the workday has begun and the employee’s subsequent walk to their workstation should be considered compensable work time.

Restaurant Wait Staff Gets Stiffed

A Coral Gables restaurant agreed to pay $53,324 in back wages to 27 employees following a Department of Labor investigation. Cafe Vialetto in Coral Gables, FL agreed to pay its employees after federal investigators determined the restaurant did not pay wait staff for hours worked before and after their shifts, violating minimum wage laws. The DOL also found that the restaurant violated the overtime pay and record keeping requirements of the Fair Labor Standards Act.

Minimum wage and overtime pay violations are very common in the restaurant industry. Illegal pay practices are so common in the industry that many restaurant workers assume that the practices must be legal. Exploitation of restaurant workers is particularly troubling because their wages are among the nations lowest. Restaurant jobs meager wages make them some of the worst paying jobs in America.

18 Tyson Overtime Lawsuit Consolidated

The U.S. Judicial Panel on Multidistrict Litigation ordered that pre-trial proceedings in 18 wage and hour lawsuits against Tyson Foods Inc. be consolidated. Tyson workers in Arkansas, Alabama, Georgia, Indiana, Kentucky, Maryland, Mississippi, Missouri, Oklahoma and Texas filed lawsuits for unpaid overtime wages. In 2005, the U.S. Supreme Court ruled that Tyson-owned IBP, Inc. violated the FLSA by failing to pay workers in South Dakota for the time they spent donning and doffing required sanitary and protective gear and equipment, as well as associated waiting and walking time. 

In September 2007, the Third Circuit Court of Appeals determined that donning and doffing required gear and equipment by Tyson workers constituted work as a matter of law. Still, Tyson chooses to not pay many workers for time spent changing into or out of protective clothing, waiting in lines to retrieve the clothing or perform production work, or walking from the locker rooms to their work stations.

The Arkansas Democrat-Gazette reports that: “Robert Camp of The Cochran Firm in Birmingham, Ala., who represents more than 1,000 clients in a suit against Tyson, said it could work to the plaintiffs' advantage also to all be heard in one court.”

Servers and Other Restaurant Workers Are Getting Short Changed

Minimum wage and overtime violations are rampant throughout the restaurant industry. These violations affect servers, bartenders, bus persons, hosts and hostesses, and kitchen staff. FLSA minimum wage and overtime violations in the restaurant industry are particularly disturbing because of the low wages earned by most restaurant workers. The U.S. Department of Labor’s Bureau of Labor Statistics reports median hourly earnings (as of May 2004) for restaurant workers: fast-food cooks earn $7.07 per hour; waiters and waitresses (including tips) earn 6.75 per hour; bartenders (including tips) earn $7.42 per hour; and hosts and hostesses earn $7.52 per hour.

The scope of violations in the restaurant industry is evident by reviewing the U.S. Department of Labor Wage and Hour Division’s enforcement record over the past several years.  Many restaurants across the country, particularly smaller ethnic restaurant chains, have been subject to DOL enforcement actions. 

Las Palmas Mexican Restaurants, for example, agreed to pay $130,698 in back overtime wages to 85 employees who worked at three restaurants in Nashville, Tennessee.  The Wage and Hour Division’s investigation revealed that servers, busboys, hostesses and kitchen staff had not been properly paid under the Fair Labor Standards Act (FLSA). 

La Tapatia Mexican Café y Cantina in Houston has paid $109,708 in back pay after an investigation by the U.S. Department of Labor’s Wage and Hour Division found 217 current and former servers and cooks had not been properly paid.  According to the Wage and Hour Division the company violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), by paying servers straight time for all hours worked and also by failing to pay overtime to non-exempt cooks.

A Federal Court in Minnesota ordered El Mariachi restaurants in Fairmont and Austin, Minnesota to pay 21 workers $39,931 in unpaid overtime compensation, minimum wages and liquidated damages.

In Indiana, 245 restaurant workers, including cooks, servers and bus persons recovered $350,041 because of the DOL’s efforts.  The workers were employed in 11 different restaurants throughout Indiana.  Another dozen Indian workers, kitchen workers at Mexico City Grill, in Indianapolis and Mi Casa Mexican Restaurant in Greenfield, Indiana were ordered to receive $10,000 in unpaid overtime wages.

In Austin, Texas eight kitchen staff employees recovered $51,347 in back wages from The New Mandarin Chinese Restaurant

Asian Super Buffet La. Inc. in Kenner, Louisiana violated the FLSA by including tips, meals and lodging as part of the wait staff’s compensation for hours worked, resulting in employee wages below the federal minimum wage. The company also failed to properly compensate employees for overtime hours and to maintain required records. As a result, Asian Super Buffet agreed to pay $77,218 in back wages to 26 current and former kitchen workers and wait staff. 

El Nopal Mexican Restaurant paid back wages totaling $95,800 due to 15 employees of the Valley Park, Missouri restaurant following an investigation by the U.S. Department of Labor’s (DOL) Wage and Hour Division. According to the investigation, the work force consisted of primarily low-wage Hispanic workers employed as servers and cooks.  Restaurant officials were found in violation of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA). Approximately $68,000 of the total was due from the minimum-wage provision violations, and the remaining $27,000 involved unpaid overtime compensation.

San Pietro Restaurant, an Italian eatery located in Midtown Manhattan, paid 45 employees a total of $102,216 in overtime back wages. According to a U.S. Department of Labor investigation, the restaurant improperly paid cooks, waiters and bus boys among others. The investigation found that many employees worked more than 40 hours a week without receiving overtime pay. Investigators determined that employees worked an average of 52 hours per week. Management officials of San Pietro Restaurant agreed to pay employees the back wages they were due and to come into full compliance with the FLSA in the future.

While most of the DOL’s enforcement actions have targeted local restaurant chains. National chains and franchises face similar issues. In 2006, the DOL filed a lawsuit against Barbeque Ventures LLC, Barbeque Ventures of Nebraska LLC and Old Market Ventures LLC, known as Famous Dave’s, to collect $92,516 in back wages due 25 employees. The department alleged that the employees (kitchen workers and servers) at all five Famous Dave’s locations in Omaha and Bellevue, Nebraska, and Council Bluffs, Iowa were not paid overtime.

In Nashville a restaurant worker at two Sbarro Restaurants, operated by franchisee F & S Foods, Inc., filed a federal lawsuit claiming that he and his co-workers were not properly paid for overtime hours and were required to work off the clock without compensation. The employer told the Court that it had compensated its employees for unpaid overtime and agreed to the entry of an $11,000 judgment in favor of the one employee who filed the lawsuit.

Meat Processing Facilities

Meat processing facilities frequently fail to comply with the FLSA.  Typically, employers fail to pay employees for the time spent donning (putting on) and doffing (taking off) required sanitation gear and personal protective equipment. 

Employers in the meat processing industry must capture and pay employees for all time spent donning and doffing required sanitary/safety gear and equipment.  These employers must also pay for all the related walking and waiting time as well as other related duties (such as sharpening knives or sanitizing equipment). 

Employers in this industry also frequently fail to pay their employees for production work, and donning and doffing, performed during their meal periods. 

Tipped employees

Tipped Employees Under the Fair Labor Standards Act (FLSA)

Tipped employees are those who customarily and regularly receive more than $30 a month in tips. Tips actually received by tipped employees may be counted as wages for purposes of the FLSA, but the employer must pay not less than $2.13 an hour in direct wages.

Requirements

If an employer elects to use the tip credit provision the employer must:
  1. Inform each tipped employee about the tip credit allowance (including amount to be credited) before the credit is utilized.
  2. Be able to show that the employee receives at least the minimum wage when direct wages and the tip credit allowance are combined.
  3. Allow the tipped employee to retain all tips, whether or not the employer elects to take a tip credit for tips received, except to the extent the employee participates in a valid tip pooling arrangement.
If an employee's tips combined with the employer's direct wages of at least $2.13 an hour do not equal the minimum hourly wage ($5.15 an hour) the employer must make up the difference.

Dual Jobs
: When an employee is employed concurrently in both a tipped and a non-tipped occupation, the tip credit is available only for the hours spent in the tipped occupation. The Act permits an employer to take the tip credit for time spent in duties related to the tipped occupation, even though such duties are not by themselves directed toward producing tips, provided such duties are incidental to the regular duties and are generally assigned to such occupations. Where tipped employees are routinely assigned to maintenance, or where tipped employees spend a substantial amount of time (in excess of 20 percent) performing general preparation work or maintenance, no tip credit may be taken for the time spent in such duties.

Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they may\should have received.

Service Charges
: A compulsory charge for service, for example, 15 percent of the bill, is not a tip. Such charges are part of the employer’s gross receipts. Where service charges are imposed and the employee receives no tips, the employer must pay the entire minimum wage and overtime required by the Act.

Tip Pooling: The requirement that an employee must retain all tips does not preclude tip splitting or pooling arrangements among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), busboys/girls and service bartenders. Tipped employees may not be required to share their tips with employees who have not customarily and regularly participated in tip pooling arrangements, such as dishwashers, cooks, chefs, and janitors. Only those tips that are in excess of tips used for the tip credit may be taken for a pool. Tipped employees cannot be required to contribute a greater percentage of their tips than is customary and reasonable.

Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, then the employer may pay the employee the tip, less that percentage. This charge on the tip may not reduce the employee's wage below the required minimum wage. The amount due the employee must be paid no later than the regular payday and may not be held while the employer is awaiting reimbursement from the credit card company.

Typical Problems

Minimum Wage Problems: Employee does not qualify as a “tipped employee”, tips are not sufficient to make up difference between employer's direct wage obligation and the minimum wage; employee receives tips only -- so the full minimum wage is owed; illegal deductions for walk-outs, breakages and cash register shortages; and invalid tip pools.

Overtime Problems: Failure to pay overtime on the full minimum wage; failure to pay overtime on the regular rate including all service charges, commissions, bonuses and other remuneration.
Off the Clock: Time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. This time is commonly referred to as “working off the clock.”

Tipped employees who earn $2.13/hour in wages while their employer applies the tip credit to the remaining minimum wage amount are considered to be minimum wage employees.  Any off the clock work by these employees would reduce their wages to below minimum wage and would therefore be a failure by the employer to pay minimum wage.  

Uniforms: The FLSA does not allow uniforms, or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime.

The FLSA does not require that employees wear uniforms. However, if the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, it may not reduce the employee's wage below the minimum wage or cut into overtime compensation required by the Act.

For example, if an employee who is subject to the statutory minimum wage of $5.15 an hour is paid an hourly wage of $5.15, the employer may not make any deduction from the employee's wages for the cost of the uniform nor may the employer require the employee to purchase the uniform on his/her own. However, if the employee were paid $5.50 an hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from the employee's wages would be $10.50 ($.35 X 30 hours).

The employer may prorate deductions for the cost of the uniform over a period of paydays provided the prorated deductions do not reduce the employee's wages below the required minimum wage or overtime compensation in any workweek.