Blanchard & Walker PLLC : Workers on a “Day-Rate” Pay System are Still Owed Overtime Pay.
October 31, 2019
“Day-rate” regulations under the Fair Labor Standards Act (“FLSA”) are very clear: “day-rate” workers” are entitled to additional pay for hours worked over forty in a week. The Department of Labor Regulation, 29 C.F.R. § 778.112, requires that when employees paid on a day-rate work more than forty hours in a week, their hourly rate is calculated by totaling all money received in the workweek and dividing by the total hours actually worked in that week. Such employees are then entitled to an overtime half-time premium for all hours worked over forty that week.
In one recently-filed Blanchard & Walker case, a client worked in construction and demolition of merchandizing fixtures for big box stores, such as AutoZone and Meijer, but she was paid only a straight day rate for each day worked. She worked more than ten hours a day, six or seven days a week without the overtime pay required under the law. Unfortunately, this type of payroll fraud is very common.
The U.S. Secretary of Labor filed a similar case in Michigan last year, and the Federal District Court for the Eastern District of Michigan easily disposed of the restaurant owner’s defenses and granted Summary Judgment for the DOL for “day-rate” restaurant workers:
Although the FLSA does not require employers to compensate their employees on an hourly basis, “the overtime compensation due to employees must be computed on the basis of the hourly rate derived therefrom, and therefore, it is necessary to compute the regular hourly rate of such employees during each workweek.” 29 C.F.R. § 778.109. The “regular rate” will necessarily fluctuate when an employee’s hours vary. 29 C.F.R. § 778.108. In this case, Defendants paid their employees a flat day rate, regardless of the hours worked. The Secretary calculated overtime due by performing a mathematical computation to determine the “regular rate.” The Secretary used the total remuneration as the dividend, and the hours worked as the divisor, to determine the “regular rate” as the quotient. Using this calculation, the Secretary determined that Defendants failed to pay overtime at one and a half times the regular rate for any of their employees. Defendants have failed to show that the Secretary’s calculations do not comport with the strictures of the FLSA. Accordingly, Defendants’ pay practices violate the FLSA’s requirement for overtime compensation under 29 U.S.C. § 207(a) and the Secretary is entitled to summary judgment.
Acosta v. Min & Kim Inc., No. 15-CV-14310, 2018 U.S. Dist. LEXIS 9507, at *18-19 (E.D. Mich. Jan. 22, 2018)
Unfortunately, many employers violate this wage law hoping they won’t get caught on this type of payroll fraud… and even if they do get caught, hoping that it will cost less to settle a lawsuit and pay off one plaintiff rather than changing their system and paying all workers what they are legally owed.
At Blanchard & Walker, we fight back for the overtime right of day-rate workers. In one recently-filed FLSA collective action in the Eastern District of Michigan, the lead plaintiff came forward with allegations for herself and other similarly situated employees who also worked weeks, sometimes sixty or seventy hours, but only received a flat “day-rate” for each day worked. Blanchard & Walker lawyers continue to investigate and talk to day-rate workers across transportation, service, and construction industries.
Blanchard & Walker PLLC: Federal Lawsuit Alleges “Day-Rate” Workers Deprived of Overtime Pay for 70+ Hour Weeks
“Day-rate” regulations under the Fair Labor Standards Act (FLSA) are clear: “day-rate workers,” such as retail display assembly workers, are owed an additional half-time pay for hours worked over 40 in a week.
Blanchard & Walker PLLC Payroll Fraud Case Pending: Plaintiff worked doing construction and demolition of merchandizing fixtures for DisplayMax aka FixtureMax, servicing big box stores such as AutoZone and Meijer. Even though she worked more than ten hours a day, six or seven days a week, she was paid only a straight day-rate for each day worked—without the overtime pay required by law. “Day-rate” regulations under the Fair Labor Standards Act (FLSA) are very clear: “day-rate” workers are entitled to an additional half-time pay for hours worked over forty in a week. Plaintiff in the federal court lawsuit alleges she is owed the FLSA-mandated half-time premium for all overtime hours, and brought the case so that all similarly situated employees of DisplayMax and FixtureMax will have an opportunity to opt-in and recover the overtime pay legally owed to them. Blanchard & Walker lawyers are currently taking calls with impacted workers to investigate the scope of the pay practices at issue.
Bonus reading: The Case for Good Jobs
Blanchard & Walker Law PLLC: Ruling Provides Warning for Mandatory Handbook Restrictions
January 31, 2019
Blanchard & Walker clients win in case tried under the National Labor Relations Act. Trial verdict provides a warning for employers seeking to impose workplace communication restrictions.
The Motor City Pawn Brokers ruling confirms that oppressive handbook requirements banning everything from communications with former employees to social media postings violate the National Labor Relations Act, and firing people for (more…)