Recovering Lost Earnings and Benefits from a Different Angle

Post Authored by Haley Jenkins

Personal injury attorneys are undoubtedly familiar with pay stubs, timesheets, and other methods of determining a plaintiff’s lost earnings while recovering from an injury. But many attorneys and their clients may be missing an even bigger case: unpaid wages. Recent media attention and high-profile cases such as those against Uber and Lyft have heightened public awareness of employee misclassification issues and unpaid wages. However, many attorneys may not realize that they have one of these cases sitting right under their nose.

Section 206 of the Fair Labor Standards Act (“FLSA”) establishes a federal minimum wage of $7.25. 29 U.S.C. § 206(a) (2016). Section 207 mandates overtime payment at a rate of time and one half the employee’s regular rate for working over 40 hours in one week. 29 U.S.C. § 207(a)(1) (2010). However, there are some exemptions from the general requirement to pay overtime, often called the “white collar exemptions.” See 29 U.S.C. § 213 (2018). These exemptions, which are regulated by the Code of Federal Regulations, include the executive, administrative, professional, computer employee, and outside sales employee exemptions. See 29 C.F.R. §§ 541.100-541.500. But for an employer to classify an employee as “exempt,” the employer has the burden to satisfy all components of the claimed exemption. Misclassified employees can recover unpaid wages and overtime pay, liquidated damages (unless the employer can prove good faith), attorneys’ fees, and punitive damages. Employees can recover unpaid wages and overtime dating back three years, as long as the employee can prove that the employer’s violation of the FLSA was willful.

One common tactic employers use to skirt wage laws is not paying minimum wage or overtime, or only paying “straight time” for all hours worked. This is common in professions where the violations have been occurring for a long time without repercussion. For example, recent cases against professional football and basketball teams highlighted a years-long and industry-wide practice of failing to pay professional cheerleaders minimum wages and overtime for all hours worked. See, e.g., Lacy T. and Sarah G. v. Oakland Raiders, Case No. A144707 (Cal. Ct. App. Dec. 13, 2016); Herington v. Milwaukee Bucks LLC, 2:15-CV-01152 (E.D. Wisc. 2015). Employers also commonly fail to pay undocumented immigrants, despite the fact that they are fully protected by wage laws. See Patel v. Quality Inn South, 846 F.2d 700 (11th Cir. 1988). Another common tactic is employee misclassification, which can arise in two ways: (1) employers misclassifying workers as “exempt”; and (2) employers misclassifying employees as independent contractors. These tactics are used to avoid paying overtime to certain employees and to avoid paying payroll taxes and other benefits. Some employers even require employees to perform work-related tasks before or after their regularly scheduled shift, all off-the-clock and without pay.

While it may seem overwhelming to know how to spot these types of violations, all it really takes is asking your clients a few additional questions. For hourly workers, ask whether their employer accurately records time for all work-related tasks, and pay special attention to pre- and post-shift duties. Asking clients whether they receive straight time, as opposed to time and one-half, for all hours worked can also reveal violations. For salaried employees, bear in mind that whether workers are paid a salary does not determine exempt status, and job titles are irrelevant. Consider instead whether the employee has real exempt powers such as hiring, firing, making policies, or supervising other workers. Employees paid on a commission-only basis are almost certainly being taken advantage of because this pay plan is almost always illegal unless the employee is a properly exempt outside sales employee. Finally, if you do find a violation, it is almost certainly being applied across the board to all workers in that position, which makes wage cases ripe for class action treatment. Employment laws are ever-changing, and their corresponding regulations are constantly in flux. It is important to pay attention to these laws and regulations in order to identify violations when you see them and to recover your client’s hard-earned wages.

About the Author:

JENKINS_head-shots_382x215Haley litigates on behalf of Stephan Zouras, LLP clients in both class and individual litigation. A spirited advocate, Haley represents people in a broad spectrum of legal disputes ranging from unpaid wages and employee misclassification, to antitrust, consumer fraud, whistleblower actions, and qui tam cases. Haley joined the Stephan Zouras team as a law clerk in 2015 while attending law school. Haley graduated cum laude from Chicago-Kent College of Law in 2016, where she was a member of the Dean’s List, served as the Vice President of Fundraising for the Student Humanitarian Network, and was a two-time regional champion with the Chicago-Kent Trial Advocacy Team. Haley and her cases have been profiled by numerous media outlets including the Chicago Tribune, Crain’s Chicago, and FundFire.

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