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The Federal Fair Labor Standards Act…Does it Apply to You?

Most California attorneys routinely sue employers on behalf of their clients for violations of the California Labor Code. However, there are many reasons to consider suing under the Fair Labor Standards Act. We are currently involved in a large class action where the corporate defendant declared bankruptcy (probably in part to avoid liability to its employees). Using the federal Fair Labor Standards Act, our clients will be able to recover against the corporate owners and managers who violated the law. Under the California Labor Code, there is no individual liability. At Los Angeles Employment Attorney, about 30% of our cases state-wide involve some type of Labor Code violation.

The federal law applies to most employers who annual sales are above $500,000 or who are engaged in interstate commerce. This includes almost all employers. Do you work more than 40 hours in a week? Then (like the CA Labor Code) you are entitled to overtime. (Your normal wage x .5). However, you may be exempt from overtime if you are an executive, professional or administrative worker. Under the executive exemption (meaning, no overtime) you must manage others as your primary job duty; earn at least $455/week; direct the work-related activities of at least two or more full time employees; have the authority to hire, fire, promotion,d emote or discipline others or make meaningful recommendations.

Under the administrative exemption, ask yourself if you primarily perform office or non manual work on behalf of the corporation management. Do you primarily use your own discretion and judgment; again, do you earn at least $455/week? (This amount may change so check the current regs).

Finally, we have the professional exemption.  This requires that you perform work requiring imagination, originality or talent in a recognized field. Further, that you perform work required predominantly intellectual work with a prolonged course of instruction and involving the exercise of discretion and judgment. Fields such as medicine,, law, accounting, actuarial work, engineering, teaching and other physical sciences are commonly covered under this exemption. An important subset of this exemption is computer employees like programmers, software engineers, etc., who make at least $27.63 per hour. There is a similar California exemption but the hourly rate-while it varies–is generally about twice the FLSA rate for exemption.

We recently accepted a class action matter in which “managers” were actually paid by the hour, were told to work “off the clock” as part of their “manager’s code”, and were putting in 15-20 hours more per week than registered on the books. When our client complained, she was fired.

If you are a highly paid employees performing office or non manual works, earn more than $100,000 and regularly perform at least one of the duties of an executive, administrative or professional employee, you would also be exempt.

Outside sales people, while not included in the administrative, professional exemptions, are also exempt from overtime if they work away from the work place and make sales or obtains orders for the employer. The logic is that the self-motivation behind earning commissions is voluntary and lack of overtime should be more than compensated by adequate commission earning.

We are currently litigating again a major San Diego employer who “docks” its salaried workers for partial days’ absence by taking time from their personal days off time bank. Another common problem we’ve faced is companies that label an entire section of employees as salaried/exempt without confirming the work actually done qualifies for the exemption.

In future blogs we’ll get into more detail about how employers get into trouble by not paying on time, by improperly docking sick time, and failing to factor in all laws they are required to follow.  One ruse we’ve noticed is the improper use of “bonuses”. If you are getting these regularly, they might actually be disguised overtime pay below the amount required by law, both state and federal.

Please consider this blog educational in nature. We practice employment wage and hour and discrimination law in California. Steve