Call Center Industry and Wage and Hour Violations

Call Center Employees Affected by Wage Theft

In today’s age of technology and convenience, customer service is often only a phone call or instant message away. With an increasing consumer demand for faster support and quicker turnaround times, it seems that more industries than ever have turned to call centers as a means to provide streamlined service to their customers. Call center employees are essential service providers for customers in need of guidance. Sadly, mistreatment is common.

Unfortunately for Customer Service Representatives (“CSRs”), call centers are one of the most common places for companies to commit wage violations, These violations can be accidental or intentional, depending on the centers management. Under the Fair Labor Standards Act (“FLSA”), covered nonexempt employees are entitled to receive minimum wage for all hours worked, and overtime compensation at one and one-half times their regular rate of pay for all hours worked in excess of 40 in a workweek.

Today, numerous call centers across a variety of business channels call central Ohio home, including Teleperformance, Call Management Resources, ContactUS Communications, and Total Quality Logistics all operate facilities in the Columbus area. Nationwide, Verizon, DISH, JPMorgan Chase, and Randstad also operate centers in the surrounding vicinity.

FLSA Violations and Call Centers

When centers expect their employees to perform unpaid “off-the-clock” work, problems arise. This type of work is a direct violation of the FLSA. Call center employees must receive paid for time spent performing everyday duties. These duties include:

  • turning on/off computers
  • logging in to programs
  • making pre- or post-call notes
  • attending work-related meetings
  • working through lunch
  • participating in work-related training

If you work in a call center and are not being properly paid wages you have earned, an attorney can help. You can call for a free consultation at 800-274-5927. You may have a viable claim and we can help you determine the best course of action. The team at Barkan Meizlish, LLP is here to help.

 

originally published on March 13th, 2018

No Closed Lid on this Class Action

Lids, a store selling jerseys, hats, and t-shirts, is facing a class-action lawsuit for failing to pay overtime to store managers.  Lids’ managers were paid under a fluctuating work week (“FWW”) method of payment. Under this method of payment, employees are paid a fixed salary amount whether or not they work more or less than 40 hours a week. The FWW method further permits hours worked in excess of 40 hours a week to be compensated at a minimum of one-half time the worker’s regular rate. However, the lawsuit alleges that Lids store managers were not fully compensated for all of the overtime hours they worked and were instead paid a bonus based on meeting sales quotas.

On January 2, 2018, the District Court for the Southern District of Indiana denied Lids’ motion to dismiss the case and granted the managers’ motion for conditional certification of an opt-in class of current and former store managers. The judge ruled that the lead plaintiff in the case “has made a modest factual showing that she and the potential opt-in plaintiffs were victims of a common policy that violated the FLSA.”

The judge ordered Lids to provide a spreadsheet listing the names and last known addresses of non-exempt store managers who were entitled to overtime pay since Feb. 2, 2014.

The lawsuit was filed in the U.S. District Court for the Southern District of Indiana and is titled Julia Shumate, on behalf of all others similarly situated v. Genesco, Inc., Hat World Inc., d/b/a Lids Sports Group, 1:17-cv-3574.

 

What is Wage Theft?

Wage Theft remains a serious problem in the United States. The majority of wage theft violations are due to businesses failing to pay minimum wage. Other examples of wage theft include employees who have their tips stolen, those who work “under the table” or off the books, and employees who are forced to clock out and continue working—and these are merely a few examples.

A $50 Billion Issue
Approximately $50 billion dollars in wages are stolen by U.S. employers nationwide every year. That number is enough to provide 1.2 million people with employment and pay them $20 per hour. In comparison, the combined robberies, motor vehicle thefts, larcenies, and burglaries added up to less than $14 billion in 2012.  States, along with the Federal Department of Labor, recovered approximately $933 million in stolen wages that same year, which was less than 2 percent of what was taken from hard-working employees.

More Grim Statistics
An estimated 83 percent of workers who win their wage theft cases do not see a single penny. According to the 2017 Wage Theft Report, the average weekly earnings of a U.S. employee is $339, of which $51 is stolen. This comes to a total of $2,634 out of $17,616 annual earnings. A study focusing on low-wage industry workers in New York, Chicago, and Los Angeles found at least two-thirds of these employees dealt with at least one pay violation.

Wage Theft Hurts Women, Immigrants, & Latin Americans the Most
Statistics show that immigrants, women, and Latin Americans get hit the hardest of those suffering from wage theft. Over 30 percent of women have their wages stolen compared to less than 20 percent of men, while Latin American citizens lose over 30 percent more than Asian and white people. More than 30 percent of foreign workers also report stolen wages, in comparison to less than 15 percent of U.S.-born workers.

Fighting Wage Theft
Thankfully, people are fighting the war against wage theft. New York has the strongest anti-wage theft laws in the country, while state attorney generals in 45 states have recovered $14 million in wages back for workers. Private attorneys won $467 million in wage theft class-action suits, and the U.S. Department of Labor recovered $280 million. State departments of labor in 44 states took back $172 million in stolen wages.

Wage and labor laws need to be stronger than ever to get rid of this problem permanently. Will adjudication be enough to slow down or prevent this unjustifiable practice in the future? It’s unlikely, but authorities are doing what they can to at least catch some of the violations.

Department Manager Sues for Unpaid Overtime

A former Urban Outfitters department manager recently filed a lawsuit against the retail clothing company for violations of the federal Fair Labor Standards Act (FLSA).  The plaintiff seeks unpaid overtime wages resulting from the store misclassifying her as “exempt” from federal overtime laws. Under the FLSA, non-exempt employees are entitled to overtime pay, while exempt employees are not. The plaintiff alleges that she regularly worked over 40 hours a week throughout her employment, but did not receive overtime compensation from Urban Outfitters as required by federal law. The lawsuit claims that the plaintiff’s treatment was part of the store’s broad, company-wide policy to minimize labor costs by classifying all department managers as “exempt” from the FLSA’s overtime provisions.

Whether an employee qualifies as exempt depends upon a variety of factors, including the job duties he or she performs—not the employee’s job title. To be exempt from receiving overtime, a manager must exercise a significant degree of independent decision-making that affects the business, direct or supervise the work of other employees, and have the authority to hire and fire employees. According to the lawsuit, the department managers at Urban Outfitters were actually non-exempt because, despite the management job title, they primarily performed manual labor and did not do any hiring, firing, disciplining, supervising, or engaging in any independent judgment and discretion.

Misclassifying employees as exempt is a common way employers can violate the FLSA. Keep in mind that a job title of “manager” or “supervisor” doesn’t necessarily mean you are exempt from receiving overtime. If you are regularly performing non-exempt work, you may be entitled to unpaid overtime wages for up to the past three years, an additional amount in liquidated damages equal to the unpaid overtime, and employment attorney’s fees and costs.

Pizza Chain Owes

A pizza restaurant chain in Manchester, Connecticut was held liable for violating the Fair Labor Standards Act (FLSA). An investigation conducted by the U.S. Department of Labor’s Wage and Hour Division found that the pizza restaurant chain had violated the FLSA’s minimum wage, overtime, and record-keeping requirements between February 2013 and November 2015. The restaurant did not pay one-and-one-half their regular rates of pay to three employees who worked overtime hours up to seventy-five hours per week. Additionally, the restaurant took payroll deductions for cash register shortages that resulted in one employee receiving less than minimum wage. The investigation also found that the restaurant maintained and supplied false time and payroll records and statements to investigators during the current investigation and a prior investigation in 2015.

Additionally, the investigation found that between December 2015 and April 2016, the owner of the restaurant continually pressured one employee to make false statements to investigators, leading the employee to believe he had no choice but to resign. The Department of Labor charged that the owner’s behavior resulted in the worker’s constructive discharge, in violation of the FLSA’s anti-retaliation provisions.

Therefore, on November 16, 2017, a United States District Court in Connecticut issued a judgment against Chemro LLC d/b/a People’s Choice, and Defendant Robert Y. Mercier II for back pay in the amount of $67,151.14, which includes minimum wage and overtime payments due, as well as liquidated damages, compensatory damages, punitive damages, civil money penalties, and interest. The Court also ordered that the company and its owner comply with the FLSA and “refrain from discharging or discriminating against employees who initiate or cooperate with an FLSA investigation.”

The FLSA requires that most employees receive one-and-one-half times their regular rate of pay when they work more than 40 hours in a work week and that employers maintain adequate and accurate records of employees’ wages and work hours. If you feel that you are not being properly paid wages you have earned, you should call our unpaid wages lawyer for a free consultation. You may have a viable claim and we can help you determine the best course of action after thorough consideration of your situation. We can be reached at 800-274-5927.

(Advertising Material: This Notice is for informational purposes and should not be construed as legal advice).

Baklava Not Creative?

A Brooklyn federal judge has ruled that baklava chefs’ jobs were not “creative” to meet the Fair Labor Standards Act’s creative professional exemption from overtime pay. The judge held that this exemption requires “innovation and imagination,” not the “consistency and precision” displayed by the Turkish baklava and baked goods chefs when making their tasty treats.

In a decision denying summary judgment to the defendants, the court held that the exemption defense failed because “although defendants adequately demonstrate that plaintiffs were experienced and talented [chefs], defendants [did] not demonstrate how plaintiffs’ experience and talent were applied to an innovative and imaginative task.”
The defendants, Gulluoglu, an entity that sells Turkish food at multiple locations, and its manager, failed to shoulder their burden of proving that its employees fell within the exemption. According to the court, “[d]efendants did not sell their baklava and other baked goods in five-star or gourmet establishments, and plaintiffs, tasked with preparing baklava and other enumerated Turkish baked goods to be sold by third parties, did not have the autonomy to design unique dishes and menu items.”

The plaintiffs, both former baked goods chefs for Gulluoglu, frequently worked 60 hour weeks, but were only paid a fixed weekly salary of $700. Although the plaintiffs’ skills and training were brought up in court, such as a plaintiff serving as an apprentice to a baklava maker in Turkey for seven years, deposition testimony showed that the baklava chef never prepared baklava from scratch. Rather, plaintiff would heat and apply a “sweet syrup” to frozen baklava imported from Turkey. Starting in 2010, however, the baklava was imported pre-cooked, with the syrup glaze already applied. Additionally, the pastry chef’s cakes were not made from scratch, but imported and defrosted.

Defendants argued that “plaintiffs’ talent alone should trigger the exemption.” Yet, the court held that “[t]he regulatory language makes clear that an employee talented at an unimaginative and unoriginal task does not fall within the exemption.”

If you feel that you are not being properly paid wages, you should call our unpaid wages lawyer for a free consultation.

The lawsuit was filed in the U.S. District Court for the Eastern District of New York, and is titled Eren v. Gulluoglu LLC, Case No. 15-CV-4083.

Virtual Workers and Economic Reality: Independent business owners file FLSA collective action for unpaid wages

Call center service provider Great Virtual Works is facing a collective action complaint for violations of the FLSA (Fair Labor Standards Act) and minimum wage/overtime laws of Kentucky and Pennsylvania. The case alleges that Great Virtual Works misclassified its “independent business owners” as independent contractors, rather than employees.

Great Virtual Works is a corporation headquartered in Fort Lauderdale, Florida that provides telephone-based customer service, sales service and technical support to customers of client companies such as Great Healthworks, makers of the dietary supplement Omega XL. The collective claims brought under the FLSA here allegedly apply to similarly situated individuals in other states in a00ddition to Kentucky and Pennsylvania.

The two plaintiffs claim that Great Virtual Works misclassified them in an attempt to avoid paying employees all the hours they spent actually working for the company.  According to the plaintiffs, Great VirtualWorks’ so-called “business owners” are actually individual employees working from their homes, performing hourly-paid work duties such as telephone-based customer service, sales service, and technical support for Great VirtualWorks’ client companies.

The plaintiffs argue that they and other similarly situated individuals were not business owners or independent contractors as labeled by Great VirtualWorks because they did not make significant investments in equipment or materials, exercise any specific skills, or make a significant profit or loss from their work. The plaintiffs state that Great VirtualWorks has at all times of plaintiffs’ employment been in control of their work schedules and activities, relying on them and similarly situated employees to perform an integral part of its business of providing telephone-based customer service, sales service and technical support to other companies.

Specifically, the plaintiffs allege Great VirtualWorks failed to pay them for work performed before, during, and after their shifts, including:

  • connecting to the company from their own homes or places of work, opening computer applications for the company’s telephone-based customer service, sales service and technical support (5-20 minutes);
  • having brief rest breaks (the FLSA says 5-minute to 20-minute breaks must be counted as hours worked);
  • troubleshooting activities when disconnected from the company’s network;
  • shutting down computers and applications at the end of a shift;
  • reviewing emails and completing notes when not engaged in calls but clocked in;
  • completing required online training; and
  • attending mandatory meetings or coaching sessions.

As a result of this unpaid work, the compensation plaintiffs actually received averaged less than the federal minimum wage, as well as the Kentucky and Pennsylvania minimum wage.  Additionally, plaintiffs allege that they did not receive proper overtime compensation at a rate of time-and-a-half of their regular rates of pay. The plaintiffs are now seeking unpaid minimum, overtime, and contractually-owed wages, liquidated damages, attorneys fees and costs, and other remedies they may be entitled to under federal or state law.

The lawsuit is currently stayed pending an an upcoming ruling by the United States Supreme Court on a legal issue relevant to the employees’ claims, which is whether Great Virtual Works can require employees to submit their claims to individual arbitration. The amended collective class action complaint is recorded in Kentucky as Case No. 0:17-cv-00063-HRW. The plaintiffs are represented by the law firms of Barkan Meizlish Handelman Goodin DeRose Wentz, LLP and JTB Law Group, LLC.

If you have questions or information to provide, you may contact the following attorneys:

Trent Taylor; ttaylor@barkanmeizlish.com; (800) 274-5297

Robi Baishnab; rbaishnab@barkanmeizlish.com; (800) 274-5297

Nicholas Conlon; nicholasconlon@jtblawgroup.com; (877) 561-0000

Wage and Hour Violations in the Oil and Gas Industry

The Fair Labor Standards Act (“FLSA”) was designed to protect workers from employers who may otherwise take advantage of their employees. Generally, the FLSA requires employers to pay an overtime premium to non-exempt employees of one and a half times the employee’s regular rate of pay for all hours worked in excess of 40 within a workweek and to also pay at least the minimum wage for all hours worked.  In the rapidly growing oil and gas industry, however, wage and hour violations have become more common as companies seek ways to lower their labor costs. For example:

1. Day Rate Pay Without Overtime

One common type of violation occurs when an employee receives a “day rate” payment without overtime. A “day rate” method of payment is a flat sum for a day’s work without regard to the number of hours worked in the day. Simply paying employees a day rate does not, however, negate the FLSA’s requirement that non-exempt employees receive overtime at a rate of 1.5 times the regular rate for all hours worked over 40. To comply with the FLSA, employers who use this method of compensation must therefore pay non-exempt employees a premium overtime rate. There is often plenty of room for error in calculating an employee’s overtime on a day rate of pay, as this rate can fluctuate depending on the amount of hours worked.

2. Independent Contractor Misclassification

Additionally, some employers try to avoid their obligations under the FLSA by classifying workers as independent contractors, rather than employees. Independent contractors are not subject to the many of the FLSA’s protections, including overtime, so employers often “misclassify” workers to eliminate certain tax obligations or other costs otherwise owed to employees.

This technique is fairly common in the oil and gas industry, where much of the day-to-day work on oil rigs and gas wells is sub-contracted out to other companies. But it is the actual employment relationship—not the label—that controls whether an individual is an employee or an independent contractor for the purposes of the FLSA. For example, one of the various tests applied by courts in making this determination (“economic reality test”) takes into consideration 6 different factors: (1) the permanency of the relationship; (2) the degree of skill required; (3) whether the worker contributes services that are an integral part of the business; (4) the employer’s control over the worker; (5) the worker’s opportunity for profit or loss; and (6) the worker’s investment in materials and equipment.

Defining employee status can be complex and it all depends on the circumstances surrounding the employment relationship as a whole. Additionally, misclassification can expose employers to serious liability—including payment of back wages, liquidated damages, and attorney’ fees—when violations are found.

FLSA Test For Meal Break Compensation Clarified

An often difficult issue for employers is whether meal breaks for non-exempt employees under the Fair Labor Standards Act (“FLSA”) count as compensable hours worked. Generally, the FLSA regulations state meal breaks do not count as hours worked when an employee is “completely relieved from duty for the purposes of eating regular meals.” 29 C.F.R. § 785.19. Further, an employee must generally be given 30 minutes or more and must be completely relieved of his or her duties for a period to qualify as a bona fide unpaid meal break.

However, issues arise when an employer puts various restrictions on non-exempt employees during unpaid meal breaks. For example, if an employer prohibits an employee during an unpaid meal break from leaving the employer’s premises without prior authorization, or if an employee must remain on call during a meal break to perform work at any moment, an employer could find itself in violation of the regulations and be required to pay compensable hours worked.

Recently, the Third Circuit, which covers the jurisdictions of Delaware, New Jersey, Pennsylvania, and the Virgin Islands, clarified the test to be used to determine whether restrictions placed on employees during meal periods make the periods compensable hours worked, regardless of whether the employee actually performed any work during the meal period. In the case of Babcock v. Butler County, correction officers alleged the Prison’s policy for meal breaks constituted an FLSA violation and resulted in unpaid overtime compensation. The officers claimed certain restrictions were placed on them during meal breaks; for example, not being able to leave the prison without prior authorization, and being required to remain in uniform and be on call and in close proximity to emergency response equipment in the event of an emergency. The Prison filed a motion to dismiss alleging the meal periods were not hours worked because the “predominate benefit” of the meal period was received by the officers.

On appeal, the Third Circuit agreed with the Prison’s assertion and affirmed the dismissal. The “predominate benefit” test was adopted, which asks whether the employee is primarily engaged in work-related duties during the meal period. Therefore, the Third Circuit expressly rejected the more restrictive “relieved from all duties” test. In arriving at their conclusion, the Third Circuit acknowledged the “predominate benefits” test is a “fact-intensive inquiry” that assesses the “totality of the circumstances to determine, on a case-by-case basis, to whom the benefit of the meal period inures.” Based on the facts, the Court found despite the restrictions, the officers received the predominate benefit of the unpaid meal break. The Court also looked at the parties’ collective bargaining agreement, noting that the officers were required to be paid the entire meal break period if it was “interrupted” by work. Therefore, the Court found the agreement’s protections on overtime compensation supported the overall conclusion.

Employers and employees within the Third Circuit, as well as in other Circuits, should take note of the recent decision. Specifically, attention to following is required:

1. Restrictions on non-exempt employees during meal break periods do not necessarily make the meal break time compensable hours worked for FLSA purposes.
2. Under the “predominate benefit” test, the analysis is whether the restrictions are so significant and expansive that the employer predominately benefits from the meal time, not the employee.
3. Employers should treat meal breaks as compensable hours worked if the employee is interrupted by work duties at any point during the meal break.
4. If an employer wants meal breaks for non-exempt employees to remain unpaid, the employer should institute clear policies and procedures to educate employees to (1) not perform any work during a meal break unless expressly instructed by management, and (2) to report any interrupted meal breaks immediately so compensation may be received.

Due to the significant liability concerns that meal break issues present to employers, employers would be wise to ensure they have adequate and lawful meal break policies in place.

Source: Adam Long, When Must Meal Breaks Be Paid? Third Circuit Clarifies FLSA Test (December 2, 2015), See more at: http://www.jdsupra.com/legalnews/when-must-meal-breaks-be-paid-third-39704/.

(Advertising Material:  This Notice is for informational purposes and should not be construed as legal advice).

Unpaid Internship Programs

The Fair Labor Standards Act (“FLSA”) sets forth the general requirement that all employers pay employees minimum wage and overtime pay. Under a narrow exception to this rule, an unpaid internship can comply with the FLSA if the student intern qualifies as a “trainee.” In other words, employers don’t need to compensate students who qualify for this unpaid category. To determine whether an individual is a “trainee,” the Department of Labor considers these six factors:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion, its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Although more than half of college students today have participated in unpaid internship programs, these programs tend to violate the FLSA when employers use internships as a way to complete work tasks and not educational experiences for the student. Bottom line-the more an unpaid internship resembles an educational program for the benefit of the intern, the more likely it is to qualify under the FLSA’s narrow exception.
Source: Susan Miner Parrott, Are You Paying Your Summer Intern Correctly? (May 28, 2015),http://www.jdsupra.com/legalnews/are-you-paying-your-summer-intern-33073/.
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