7 Common Violations of Colorado Overtime Laws

Most Colorado employees are entitled to overtime pay (time and one-half their "regular rate of pay") for all overtime hours worked. Nonetheless, employers frequently violate Colorado and federal overtime laws. Below are seven of the most common violations of the overtime laws:

Assuming that salaried employees are not entitled to overtime pay: With the exception of higher level executive, management or professional staff, most salaried employees are entitled to overtime pay.

Failing to pay overtime for hours worked over 12 per day: Most people are aware of the requirement to pay overtime for hours worked in excess of 40 per week but many are unaware that overtime pay also is owed for hours over 12/day.

Failing to include all compensation in calculating the "regular rate of pay": In addition to salary or hourly pay, an employee's non-discretionary bonuses, stipends and shift pay, as well as most other compensation should be included in calculating overtime pay.

"Comp" time or averaging over more than one week: For purposes of determining whether overtime hours have been worked, each week stands alone. Thus, it is improper to average hours over two or more weeks or give "comp" time in lieu of overtime pay

Calculating overtime pay on the server minimum wage: Tipped employees can be paid less per hour on the theory that their tips make up the difference. This "server minimum wage" is generally $3.02/hour less than the full minimum wage. If, however, a tipped employee works overtime, overtime pay must be calculated on the full minimum wage.

Failing to include all hours worked in calculating overtime pay: Often employers fail to count hours worked by employees in determining overtime. For example, time before a shift preparing to work (e.g., putting on safety equipment or preparing machinery or equipment) or time after a shift preparing to leave is paid work time. Similarly, if an employee does not get her entire meal break, that time also must be counted as work time.

Misclassifying employees as independent contractors: Many employers call their workers independent contractors to avoid paying overtime. If, however, an employer retains a significant degree of control over how a worker performs his job, that worker generally is not an independent contractor.

If you think any of these issues apply to you, please visit our website, ColoradoWageLaw.com, for additional information or to contact our Colorado overtime lawyers.

Study Describes Restaurant Industry's "Race to the Bottom"

The Chicagoland Restaurant Industry Coalition, a group of academics, workers rights advocates, unions and restaurant owners and employees brought together by the Restaurant Opportunities Center of Chicago, has released a report entitled "Behind the Kitchen Door: The Hidden Costs of Taking the Low Road in Chicagoland's Thriving Restaurant Industry". According to the report, a living wage (pay that would allow a worker to support him/herself and a family without government assistance) is about $16.48 an hour. Unfortunately, more than 80% of restaurant workers in the Chicago metropolitan area reportedly make less than $10 an hour, with worker as fast food restaurants averaging only about $9 an hour. The report also notes that a majority of workers reported minimum wage and overtime violations, health and safety issues and other serious legal violations at the restaurants where they work, while more than a quarter reported working "off the clock" without pay. In this news article about the study, one author describes the restaurant industry's "race to the bottom" with regard to treatment of their employees. A copy of the study, as well as similar data for other metropolitan areas, can be found here.

Another Study Confirms Rampant Wage Theft Among Low Wage Workers

A study recently released by the UCLA Institute for Research on Labor and Employment examined the frequency of labor and wage abuses against low-wage workers in the Los Angeles area. According to the study, a substantial portion of Los Angeles County workers at the bottom of the labor market are the victims of wage theft and other workplace violations, which on average deprive workers of 12.5 percent of their weekly paycheck. Approximately 88 percent of those surveyed reported at least one instance of being paid less than the minimum wage, working overtime and not being paid for it, working off-the-clock for free, or other pay-based violations during the previous work week. More than 30 percent of those surveyed were being paid less than the legal minimum wage for California, or $8/hour. A complete copy of the study is here.

FLSA Compliance Myths Debunked

This article contains a nice summary of a number of common myths regarding the FLSA's overtime requirements. Among the myths discussed: 1) salaried employees are not eligible for overtime; 2) employees can agree to work overtime without overtime pay; 2) managers and supervisors are not entitled to overtime; and 4) in calculating overtime hours, it is acceptable to average work hours over two weeks.

Houston Restaurants Settle Overtime Claims

As described in the attached article, five Houston restaurants have agreed to pay $334,000 in back wages to 154 employees as a result of investigations by the United States Department of Labor. The investigations concerned the failure to pay overtime to workers.

World's Largest Strip Club Hit With Wage Suit

Attached is the initial complaint in a recently filed lawsuit against the Sapphire Gentleman's Club in Las Vegas, which bills itself as the world's largest strip club. As with other strip club cases discussed in earlier posts, the lawsuit contends that Sapphire misclassified its dancers as independent contractors. The dancers apparently worked only for tips and did not receive overtime. According to the lawsuit, Sapphire maintained so much control over how the dancers did their jobs that the dancers actually were employees not independent contractors.

Overtime Lawsuits On Behalf of Loan Underwriters and IT Analysts

As mentioned in the overtime discussion on this website, there currently are a number of lawsuits regarding whether loan underwriters are exempt from state and federal overtime requirements. The issue here, as in many overtime lawsuits, is whether underwriters have real discretion in their job performance (in which case they may be overtime exempt) or whether they are more akin to clerical workers performing routine administrative tasks (in which case they are entitled to overtime). Here is an article about another loan underwriter class action brought against JP Morgan. Apparently JP Morgan attempted to circumvent the issue by writing job descriptions for their underwriters that bore no real relationship to the underwriters' actual job duties.

According to another article, a similar case against Lockheed has been brought on behalf of its network data communications analysts. Here, however, although the analysts apparently exercised significant discretion in their jobs, the lawsuit argues that they were in a production role and not a general administrative role. Generally, workers engaged in the production of a company's products, as opposed to those in charge of overall corporate administration, are entitled to overtime.

Cable Installer: Independant Contractor or Employee?

In a recent decision in Parrilla v. Allcom Const. & Installation Services, LLC, a federal court in Florida held that a cable installer was an employee and not an independant contractor and, therefore, was required to overtime compensation. In the decision, the court listed the following factors to be considered in distinguishing between employees and independant contractors: (1) the nature and degree of the alleged employer’s control as to the manner in which the work is to be performed; (2) the alleged employee’s opportunity for profit or loss depending upon his managerial skill; (3) the alleged employee’s investment in equipment or materials required for his task, or his employment of workers; (4) whether the service rendered requires a special skill;
(5) the degree of permanency and duration of the working relationship; and (6) the extent to which the service rendered is an integral part of the alleged employer’s business.

U.S. Government Report Focuses on Independant Contractor Misclassification

A report released this week by the United States’ Government Accountability Office (GAO), highlights the issues created when employers misclassify employees as independent contractors and calls for the DOL and IRS to step up enforcement measures to crack down on the abuses. A brief summary of the report is here.

Although exact figures are unknown, older studies indicate that millions of employees have been improperly classified as independent contractors by their employers. One major problem with this from a wage perspective is that independent contractors generally are exempt from the protection of federal and state wage and hour laws, including the Fair Labor Standards Act. Therefore, misclassified employees may be denied overtime and minimum wages.

Although more information can be found on this website, the basic distinction between an independent contractor and an employee is a the degree of control exercised by the employer. If your employer has significant control over your work, then you likely are an employee entitled to wage protection, even if your employer calls you a contractor.

In any event, to combat this rampant problem, the GAO report recommends a significant increase in enforcement. Specifically, the report states that, “[t]o assist in preventing and responding to employee misclassification, and to increase its detection of Fair Labor Standards Act (FLSA) and other labor law violations, the Secretary of Labor should direct the Wage and Hour Division (WHD) Administrator to increase the division’s focus on misclassification of employees as independent contractors during targeted investigations.”

If you have any questions about your classification as an independent contractor, please contact the firm.

Wave of Tip-Pooling Lawsuits in NYC

After learning of the Nobu lawsuit mentioned in my last post, I learned that there has been a wave of similar litigation against restaurants in the New York City area. According to this article, a number of the city's finest dining establishments have been sued over illegal tip-pooling practices and failure to pay overtime to staff.

Employers Don't Get to Decide the Length of a Week

According to this article, an employer in Alabama has been ordered to repay over $300,000 in backwages after a Department of Labor investigation revealed that the employer was calculating overtime based on a 14-day consecutive period instead of the required 40 hour workweek. The fact that the employees explicitly agreed to work under this system made no difference because employees cannot waive their rights under the federal and state wage laws.

"Whoever dares to sue, you're gonna die"

Here is an example of why workers need the protections of wage and hour laws (as well as attorneys willing to represent them). Workers at a restaurant in Maine have sued their employer claiming they worked 70 hours or more per week with no overtime pay, were paid only in tips and never received rest breaks. As can be seen from the quote above, the employer apparently threatened to kill any employees who dared to sue him. According to the article, the employees who filed the suit are immigrants who speak very little English.

Your "US" Magazine Moment . . .

According to this blog post, Lisa Marie Presley has been sued by her former nanny who claims she was denied rest breaks and overtime pay.