Wage & Hour Counsel : Wage & Hour Lawyer & Attorney : Littler Mendelson Law Firm : Employment Law, Labor Relations

By Matthew Hank

In Carmody v. Kansas City Board of Police Commissioners, the Eighth Circuit Court of Appeals addressed the standard of proof in a wage and hour case when an employer fails to maintain accurate timekeeping records. The court held that, even under the “relaxed standard” established by the U.S. Supreme Court in Anderson v. Mt. Clemens Pottery Co., plaintiffs in a wage and hour case must still provide evidence of actual damages.

Carmody involved a group of police officers who sued the Kansas City Board of Police Commissioners, claiming they were given flextime instead of overtime wages as required by the Fair Labor Standards Act (FLSA). Neither the officers nor the city tracked the accrued flextime. In response to discovery requests, the officers failed to provide information about the number of uncompensated hours they claimed to have worked or the amount of money they alleged was owed. Only after the close of discovery, and after the defendants moved for summary judgment, did the officers come forth with evidence of damages: the officers’ affidavits containing precise estimations, week by week, of unpaid hours worked.

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The Massachusetts Supreme Judicial Court (the “SJC”) recently answered two important questions that have vexed lower courts, and employers, in recent years. First, the SJC concluded that employees may release claims under the Massachusetts Payment of Wages Law, Mass. Gen. Laws Chch. 149, § 148 (the “Wage Act”), provided that the release is “stated in clear and unmistakable terms” and specifically refers to the Wage Act. Second, the SJC held that, although plaintiffs may pursue claims for overtime under the Wage Act, which has a longer statute of limitations than the state overtime law, a plaintiff only may recover the straight-time value of such claims, not the premium rate provided for by the overtime law. To learn more about the decision, please see Littler's ASAP, Massachusetts High Court Permits Employees to Release Wage Claims, by Christopher Kaczmarek and Jeanne Barber.

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The California Legislature was active this past session. As a result, numerous wage and hour laws have been enacted that will take effect January 1, 2013. Highlights include:

• Revised provisions concerning penalties for wage statement violations.
• Increasing the amount of wages that are exempt from wage garnishment.
• Specifying that fixed salaries paid to non-exempt employees only provide for an employee’s regular, non-overtime hours, regardless of the parties’ agreement.
• Additional wage statement and Wage Theft Prevention Act notice requirements for temporary services employers.

To learn more about these and other new California laws, please see Littler’s ASAP, What's New? California's Major 2012 Employment Laws Affecting Private Sector Employers, by Christopher Cobey and Tomomi Glover.

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By Karin Cogbill

In the first significant ruling of its kind, the Los Angeles Superior Court in Bright v. 99¢ Only Stores granted the defendant’s motion to strike the plaintiff’s representative Private Attorneys General Act (PAGA) allegations. The plaintiff, Eugina Bright, filed a complaint against 99¢ Only Stores in June 2009 alleging that the store failed to provide her, and all other cashiers, with suitable seating. In October 2009, the court granted the store’s demurrer prohibiting the plaintiff from pursing a suitable seating claim through PAGA (California Labor Code §§ 2698 et seq.). In November 2010, the court of appeal reversed and remanded the case.

Back at the trial court, the plaintiff represented that she intended to seek class certification for her PAGA claim; yet she ultimately failed to move for certification. Instead, the store proactively moved to strike the plaintiff’s representative allegations in order to prevent her from seeking to recover penalties on behalf of all other alleged “aggrieved” employees. The store first argued that the plaintiff was an inadequate representative of its other cashiers. The store submitted declarations from 376 of its cashiers, all of whom indicated they disagreed with the plaintiff’s demand that they be provided seats, and the plaintiff failed to provide even a single rebuttal declaration. The store also noted the plaintiff’s independent interests in recovering lost wages and her failure to reach out to even a single “aggrieved” employee she sought to represent.

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By Christopher Cobey

In September, Governor Brown signed a bill (A.B. 240) that will equalize the penalties available to employees and the defenses available to employers on certain employee wage claims, brought either in court or in the administrative system.

Under current California law, an employee who wishes to bring a claim alleging payment of less than the minimum wage has a choice of making that claim either in California Superior Court or in an administrative proceeding before the Labor Commissioner (the chief of the Division of Labor Standards Enforcement). A significant difference in the remedy available to a successful claimant between the court and the administrative agency is that a judge in a court proceeding could award the claimant liquidated damages equal to the amount of the wages unlawfully unpaid and the interest on that sum. The Labor Commissioner, however, had no authority to award liquidated damages as a remedy to a successful claimant.

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By Christopher Kaczmarek and Jeanne Barber

In July 2008, Massachusetts amended its state wage and hour laws to provide for mandatory awards of treble damages for plaintiffs who prevailed under those statutes. Since then, lawyers have disagreed as to whether this treble damages provision should apply retroactively. On August 31st, the Massachusetts Supreme Judicial Court resolved this dispute by unanimously holding that the treble damages provision does not apply retroactively.

In Rosnov v. Molloy, the plaintiff, an attorney, filed a complaint on April 17, 2007, claiming that her former partner withheld commissions from her in violation of the Massachusetts Payment of Wages Law. A jury found in favor of the plaintiff in March of 2009.

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In a case of first impression, a California court of appeal held in Bright v. 99¢ Only Stores, No. B220016 (Cal. Ct. App. Nov. 12, 2010) that the “suitable seats” provision of Wage Order 7-2001 may be enforced through the Private Attorneys General Act of 2004, California Labor Code § 2698 et seq. (PAGA).

Plaintiff’s Complaint and Procedural Background

The plaintiff, Eugina Bright, filed a class action complaint against her former employer 99¢ Only Stores. The plaintiff alleged that while employed as a cashier at 99¢ Only Stores she was not provided with a seat despite her contention that the nature of her work as a cashier reasonably permitted the use of a seat. The plaintiff based her claim for a seat on Wage Order 7-2001, Section 14 (entitled “Seats”), which provides:

A. All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.

B. When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

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The County of Miami-Dade in Florida recently enacted a "Wage Theft " ordinance which makes it a crime for an employer to "fail to pay any portion of wages due to an employee, according to the wage rate applicable to that employee, within a reasonable time from the date on which that employee performed the work for which those wages were compensation."

The law defines the term "reasonable time" to mean within 14 days, unless the employer and employee agree in a writing signed by the employee to extend the deadline for payment up to 30 days from the original date . Under the new law, employees owed $60 or more in wages may file a complaint with the county. The county will then serve the employer with notice of the claim and a hearing officer will determine the amount of past wages owed and assess liquidated damages equivalent to double the amount of past wages owed. The new law became effective on February 28, 2010.

This entry was written by Paula Steele.

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On August 21, 2009, the Massachusetts Supreme Judicial Court unanimously ruled that a worker who has been misclassified as an independent contractor may seek damages from his former employer even if the employer establishes that the worker would have been paid less had he been classified as an employee.

The plaintiff in Somers v. Converged Access , 454 Mass. 582 (2009) worked for a software company as a quality assurance engineer. He was classified as an independent contractor and, as a result, did not receive overtime, vacation pay, or benefits. The company paid him at a rate of $65 per hour. The plaintiff initially agreed to work for a sixty-day term. He later agreed to a ninety-day extension of that term.

The plaintiff subsequently applied for a permanent quality assurance engineer position. After the company did not select him for the position, the plaintiff brought suit claiming, among other things, that he had been misclassified as an independent contractor.

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Within days of each other, the governors of New Mexico and Iowa signed legislation that significantly increases the penalties for wage and hour violations in those states. The New Mexico statute also creates new causes of action.

On April 6, 2009, the governor of New Mexico signed House Bill 489 into law. The new law becomes effective on June 19, 2009. HB 489 amends the state Minimum Wage Act to prohibit employers from retaliating against employees for filing claims or asserting rights under the law, for helping someone else pursue a claim, or for notifying someone else about their legal rights.

HB 489 also lengthens the statute of limitations for wage claims from one year to three years after the last violation occurs, and provides that an investigation by the Labor Relations Division of the Workforce Solutions Department tolls the statute of limitations. In addition, HB 489 contains a continuing violations provision, meaning that a civil action brought under the Minimum Wage Act may encompass all violations that are part of a continuing course of conduct, no matter when they occur.

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The Wage & Hour Division of the U.S. Department of Labor recently issued an opinion letter that could produce substantial savings for employers who have misclassified employees as exempt from the overtime provisions of the FLSA and who need to retroactively compensate those employees for unpaid overtime.

An employer may pay its employees a fixed salary. But, when a non-exempt employee works more than forty hours in any workweek, the Fair Labor Standards Act (FLSA) requires his or her employer to pay overtime at one and one-half times the regular rate of pay. 29 U.S.C. section 207(a)(1).

If an employer and a non-exempt salaried employee have a “clear mutual understanding” that the employee’s salary is compensation for all hours worked each week (whether many hours or few), then the FLSA permits the employer to use the “fluctuating workweek” method to calculate overtime. Applying this method, the employee’s salary is deemed to constitute straight-time pay for each hour of work (including overtime hours), and the employer must pay the employee only the additional “half time” premium for each overtime hour. 29 C.F.R. § 778.114.

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For the past several years, plaintiffs have routinely sought punitive damages in their wage and hour actions under the California Labor Code. A December 3, 2008 decision by the California Court of Appeals for the Fourth Appellate District may put a stop to that practice.

The plaintiff in Brewer v. Premier Golf Properties sued her former employer for denying her meal and rest breaks, failing to pay her minimum wage for all hours worked, and not providing her with accurate itemized wage statements. The jury awarded the plaintiff $26,300 in unpaid wages and penalties and, after finding that the defendant employer had engaged in malice, awarded the plaintiff an additional $195,000 in punitive damages.

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