Paycheck Lawyer Gets You Your Overtime Pay

If you have been cheated out of your overtime pay in Florida, New Mexico and Illinois you need to know your rights.

The federal overtime provisions are stated  in the Fair Labor Standards Act (FLSA). Unless you are exempt, you are covered by the Act  and must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit stated  on the number of hours employees aged 16 and older may work in any workweek. The law does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, unless overtime is worked on such days.

The law for Florida, New Mexico and Illinois  applies on a workweek basis. Your  employee workweek is a fixed and regularly recurring period of 168 hours or seven consecutive 24-hour periods. It need not coincide with the calendar week. It  may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.

The bottom line is if you worked over 40 hours in a work week and got cheated out of your overtime pay you need to call the overtime lawyer – Pay Check Lawyer and get your fair pay.


Misclassification Of Independent Contractor Wage Claims

Wage, hour and overtime claims are very common and many revolve around an independent contractor missclassification. Fed ex is one  company  hit with such a misclassification lawsuit. We have seen and tried many cases thru-out Florida, New Mexico and Illinois and have won dollars for employees who have been victims of  misclassification. Employee misclassification and the labeling workers as independent contractors, rather than employees is a big win for employers.  Misclassified employees are  denied access to overtime pay for time worked over 40 hours in a given work week. The practice allows employers to avoid paying unemployment and other taxes on workers, and from covering them on workers compensation and unemployment insurance and paying them overtime pay for working over 40 hours in a works week.  If you are an employee but are working under the independent contractor title your employer may have  cheated you out of overtime pay. It is that straight forward and simple.

Employees who are classified as independent contractors (ICs) are denied their  rights and benefits under wage and hour and overtime law. These Fedex employees decided to go after FedEx and get what they were entitled to.

$228 Million was The Cost of Independent Contractor Misclassification for FedEx Ground in California
Yesterday, June 12, FedEx announced in papers filed with the SEC that its Ground Division “has reached an agreement in principle with [drivers] in the independent contractor litigation that is pending in …California [federal court] to settle the matter for $228 million.” The proposed agreement, which has not yet been filed in court, is subject to judicial approval. This proposed settlement comes nine months after the U.S. Court of Appeals for the Ninth Circuit ruled in appeals from federal district courts in California and Oregon that, as a matter of law, the drivers whom FedEx Ground treated as independent contractors (ICs) were employees and, therefore, FedEx had misclassified them and denied them rights and benefits under law.

In our blog post on August 29, 2014 entitled “Earthquake in the Independent Contractor Misclassification Field,” we noted that FedEx Ground has been at the epicenter of the crackdown on IC misclassification by government regulators, state legislators, and plaintiffs’ class action lawyers since 2007. But in 2010, FedEx Ground won a significant court decision involving the IC status of its Ground Division drivers in an opinion by a federal district court judge presiding over dozens of IC misclassification cases in a “multi-district litigation.” But all changed on August 27, 2014, when the Ninth Circuit Court of Appeals reversed that lower court decision in cases involving drivers in California and Oregon.

This settlement covers 2,300 drivers in California who had filed class action claims for a variety of alleged violations under federal and state law, including claims for reimbursement of business expenses, unpaid overtime, failure to provide meal and rest periods, reimbursement of deductions in pay, and non-payment of termination pay. The drivers also sought litigation costs and attorneys’ fees in their court complaint. Alexander v. FedEx Ground Package System, No. 3:05-cv-00038-EMC (N.D. Calif.).

In its June 12, 2015 SEC filing, FedEx stated that it “faced a unique challenge in defending this case given the decision of the Ninth Circuit Court of Appeals last summer.” It noted that the settlement “resolves claims dating back to 2000 that concern a [business] model FedEx Ground no longer operates.”

Where Did FedEx Ground Fail?

In the case of FedEx Ground, the Ninth Circuit was not won over by FedEx’s argument that it lacked control over the drivers’ jobs. FedEx pointed out that the FedEx IC agreement permits a driver to delegate to other drivers, take on additional routes, or sell his route to a third party. But the Court noted that FedEx may refuse to let a driver take on additional routes or sell his route to a third party, and FedEx’s senior managers have the authority to reject proposed replacement drivers based on failure to meet FedEx standards such as grooming requirements. The Court concluded that a lack of control over certain parts of the drivers’ roles was not sufficient to “counteract the extensive control [FedEx] does exercise.”

The Kansas Supreme Court last year reached a similar conclusion, but it was not as mellow in its critique of the contract used by the company. The Kansas court characterized the IC agreement as a “brilliantly drafted contract creating the constraints of an employment relationship with [the drivers] in the guise of an independent contractor model – because FedEx not only has the right to control, but has close to absolute actual control over [the drivers] based upon interpretation and obfuscation.” Said in fewer words but with even more imagery by the Court: “FedEx established an employment relationship with its delivery drivers but dressed that relationship in independent contractor clothing.”

The Impact of This Settlement on FedEx – and Others Using ICs

This settlement by FedEx Ground resolves only the claims by its drivers in California. IC misclassification claims have been brought against it in other states, some of which have already been resolved, such as a lawsuit it settled for $5.8 million with FedEx Ground drivers in Maine. FedEx may choose to resolve cases that remain pending or have not been reported as having fully resolved in other state venues, such as those in Kansas, Missouri, Massachusetts, Florida and Oregon that have been the subject of our monthly IC misclassification updates on this site.

FedEx Ground has not only been plagued by driver misclassification lawsuits over the years but also by state attorney generals and state workforce agencies in New York, Montana, Massachusetts, and other states for allegedly unpaid unemployment insurance taxes.

FedEx Ground also faces unionization efforts in Connecticut and other locations following decisions by the National Labor Relations Board (NLRB) that its Ground Division and Home Delivery drivers are employees and not independent contractors under the federal labor laws.

As we noted following the Ninth Circuit decisions last August, this setback for FedEx Ground is likely to reinvigorate the crackdown against companies using ICs to supplement their workforce or are built on an IC business model, where the IC relationship is not structured, documented, or implemented in a manner that complies with state or federal IC laws.

Lessons For Other Companies Using ICs

IC misclassification can, as we observed in our White Paper on the subject, be the result of intentional violations of the labor, tax, and employee benefits laws or, as is quite common, unintentional or misplaced failures to comply with applicable state and federal laws governing the use of ICs. Many businesses face a situation similar to FedEx Ground – a company that sought to comply with the law but did not fully satisfy the requirements. So, what lessons can be learned from this $228 million settlement and the other recent setbacks suffered by FedEx Ground?

1.  A failure to properly structure, document, and implement independent contractor relationships can and should be avoided

The laws in almost all states allow companies to contract with individuals or businesses to provide services to customers and clients of the company, yet many companies that do so fail to take steps to properly structure, document, and implement their IC relationships to fully comply with those laws.

Prudent businesses that use independent contractors or pay workers on a 1099 basis address the issue of IC compliance before being served with a class action summons and complaint and before receiving a notice from a state unemployment, wage, or workers compensation office, the IRS, or the NLRB inquiring about workers whose wages are reported on a Form 1099 but may well be employees misclassified as ICs.

As noted above, FedEx Ground lost before the appellate courts because of a misplaced reliance on an IC agreement and its policies and procedures that were good, but by no means good enough.  A quick review of the language in the FedEx IC agreement and the policies and procedures issued by FedEx would give one the impression that FedEx and its lawyers knew what to write and how to write it, but close scrutiny by the courts found one fallacy after another – sufficient in degree to lead to rulings against the company. By their very nature, therefore, IC agreements and policies and procedures that are not drafted in a state-of-the-art manner, free from language that can be used against the company, can cause businesses that use ICs not only to face legal challenges they may otherwise have been able to avoid but, once sued, they may well have been able to win.

This and similar class action lawsuits illustrate the value of using, in advance of a legal challenge, a methodology to evaluate whether an existing or proposed IC relationship can be legitimately structured as such, and if so, whether it needs to be restructured, re-documented, and re-implemented to maximize the likelihood that those workers will be regarded by the courts and government regulators as ICs and not employees. Some companies have used IC Diagnostics™ to enhance their level of IC compliance and determine whether a group of workers not being treated as employees would pass the applicable legal tests for IC status under governing state and federal law. That process also offers a number of practical, alternative solutions to enhance compliance with those laws, such as reclassification and redistribution.

2.  Retaining contractors who operate in the form of business entities, such as LLCs, do not necessarily insulate companies from IC misclassification exposure

A common misconception by many businesses is that contracting with an LLC, corporation, or other form of business entity eliminates the possibility of misclassification liability. While FedEx Ground observed in its comments to its June 12, 2015 SEC filing that it was settling a case that involved “a model FedEx Ground no longer operates,” its current business practice is not necessarily free from legal exposure. Beginning a few years ago, FedEx announced that it was converting to a new business model where it would only contract with incorporated Independent Service Providers (ISPs) who operate three or more routes in the same geographical area. Yet, last year, the Kansas Supreme Court ruled that “the employer/employee relationship between FedEx and a full-time delivery driver . . . is not terminated or altered when the driver acquires an additional route for which he or she is not the driver.” Drivers who “acquire more than one service area from FedEx” are also employees, the court held.

In January of this year, Lowe’s Home Centers settled an IC misclassification class action brought by home improvement contractors comprised of both individuals and small businesses. The $6.5 million settlement includes payments not only to individuals but also to LLCs and other forms of business entities.

Some state laws expressly carve out from their definitions of “employee” a business entity where the hiring party does not exercise direction or control over the performance of the services and meets other requirements. Companies that wish to minimize IC misclassification liability wisely do not rely solely on the fact that the IC has chosen to operate as a business entity. Structuring, documenting, and implementing a compliant IC relationship is still the key.

3.  There are “hidden costs” of class action settlements as well as other misclassification exposures that can arise after settlement

FedEx has invested heavily in its legal defense of dozens of IC misclassification lawsuits as well as audits, investigations, and proceedings by state and federal regulatory agencies. These “hidden costs” are not reflected in settlements such as the one just entered into by FedEx in California. Typically, class action settlements include legal fees that can range as high as 25-33% of the amounts paid to the class members, and oftentimes the legal fees paid by the companies defending such lawsuits equal or exceed the amount of fees paid to the plaintiffs’ class action lawyers.

The costs of worker misclassification do not always terminate once a class action is settled and all monies are paid to the workers involved, their counsel, and the lawyers representing the business being sued.  Companies that settle class action cases may also be facing claims for unpaid payroll and unemployment taxes at the state and federal levels and unpaid workers compensation premiums – although there may be defenses to those types of claims.

Finally, settlements in one state can provoke new lawsuits in other jurisdictions or create pressure to settle other outstanding IC misclassification claims. Plainly, the most prudent path is to enhance compliance when the potential for IC misclassification exposure first becomes evident to a business that is based on an IC business model or uses ICs to supplement its workforce.

This is particularly meaningful to start-up companies in the on demand, sharing, or gig economy. Businesses like Uber, Lyft and an array of other tech businesses are quickly finding that they, too, are targets of class actions, regulatory enforcement, and labor organizing by those who believe that such start-ups are not complying with federal and state IC laws. They are quickly rivaling FedEx Ground as a lightning rod for those seeking to crack down on IC misclassification. The hidden costs of such misclassification lawsuits and administrative proceedings are undoubtedly increasing.

4.  Companies that can financially survive class action IC misclassification settlements or judgments in court or before an administrative agency need not necessarily reclassify the workers as employees

FedEx is a Fortune 100 company, so it can absorb the $228 million settlement. FedEx is a good example of a company that chose to revise its business model while in the midst of legal challenges. While it is too early to tell if its actions to restructure, re-document, and re-implement its IC/ISP relationships will survive legal scrutiny, it wisely choose not to stand pat.

On the other hand, many companies treat the costly termination of a class action lawsuit or an adverse determination by a regulatory agency as imparting upon them an obligation to treat the workers in question as employees on a going-forward basis. This overlooks the fact that many businesses can adopt an IC model, even after the commencement or termination of a class action lawsuit or an adverse regulatory ruling, that may well survive future scrutiny under federal and most state laws. How? By undertaking bona fide restructuring, re-documentation, and implementation of new, state-of-the-art IC compliance practices. This is one of the reasons some businesses have resorted to methodologies such as IC Diagnostics™ even after they have become the target of legal challenges.

While efforts today to enhance IC compliance cannot eliminate past exposure to misclassification liability, any changes that enhance compliance with the IC laws going forward will not only minimize or avoid future liability but also lessen the likelihood that the business will become a target for class action lawyers and government agencies.

If you have been denied your over time pay because you were misclassified as an independent contractor by FedEx or any company contact us to discuss your rights to an overtime or wage and hour claim lawsuit. These FedEx employees stood up and you should too.


Miami Overtime Lawyer, West Palm Beach, Ft Lauderdale Overtime Lawsuits

Get Your Overtime Pay

We are Miami overtime lawyers who will demand your Miami overtime pay. We are West Palm Beach overtime lawyers who will sue your West palm Beach Employer for your overtime pay. We are Ft Lauderdale overtime lawyers and we help Ft Lauderdale working class people who have been cheated out of their Fort Lauderdale overtime pay.

Who Get Cheated Out Of Overtime Pay?

Construction workers

Hotel/ Motel cleaning staff

CNA’s who are doing live in or long hours thru a home health agency

Cashiers

Even Google was sued for cheating employees out of overtime pay

If you have been robbed of your overtime pay call us now.

James Loren is a Miami, Ft Lauderdale, West Palm Beach  overtime lawyer who will help you recover your wages. We fight for working people who have been cheated out of their wages  by employers who violate  wage and hour laws and your rights as a working person.

 


Department Of Labor Unpaid Overtime News Release

Overtime Lawyer James Loren

Keeps You Updated On The Latest Unpaid Overtime News

 

We have just found out that LinkedIn has paid  nearly $6M in unpaid overtime wages and damages
to 359 employees following a US Labor Department investigation.

LinkedIn Corp. has paid $3,346,195 in overtime back wages and $2,509,646 in liquidated damages to 359 former and current employees working at company branches in California, Illinois, Nebraska and New York. An investigation by the U.S. Department of Labor’s Wage and Hour Division found that LinkedIn was in violation of the overtime and record-keeping provisions of the Fair Labor Standards Act. When notified of the violations, LinkedIn agreed to pay all the overtime back wages due and take proactive steps to prevent repeat violations.

“This company has shown a great deal of integrity by fully cooperating with investigators and stepping up to the plate without hesitation to help make workers whole,” said Dr. David Weil, administrator of the Wage and Hour Division. “We are particularly pleased that LinkedIn also has committed to take positive and practical steps towards securing future compliance.”

LinkedIn failed to record, account and pay for all hours worked in a workweek, investigators found. In addition to paying back wages and liquidated damages, LinkedIn entered into an enhanced compliance agreement with the department that includes agreeing to: provide compliance training and distribute its policy prohibiting off-the-clock work to all nonexempt employees and their managers; meet with managers of current affected employees to remind them that overtime work must be recorded and paid for; and remind employees of LinkedIn’s policy prohibiting retaliation against any employee who raises concerns about workplace issues.

“Off the clock’ hours are all too common for the American worker. This practice harms workers, denies them the wages they have rightfully earned and takes away time with families,” said Susana Blanco, district director for the division in San Francisco. “We urge all employers, large and small, to review their pay practices to ensure employees know their basic workplace rights and that the commitment to compliance works through all levels of the organization. The department is committed to protecting the rights of workers and leveling the playing field for all law-abiding employers.”

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records, and it prohibits retaliation against employees who exercise their rights under the law.

For more information about  wage and hour claims call the Loren Law Group


Do You Want To Sue Your Employer For Overtime Money Owed?

Need A Lawyer To Get You Your Ft Lauderdale  Overtime Pay?

Call the Fort Lauderdale, Miami, Boca Raton, West Palm Beach, Orlando, Tampa,  Chicago, Peoria, Atlanta, Macon overtime lawyers of the Loren Law Group at 1 888 WAGE HELP.

WE have been helping Florida workers get their fair wages for over 3 decades

Has your employer denied you your full wages or overtime pay?

James Loren has close to 20 years of experience helping people in Miami, Hollywood, Fort Lauderdale, Pompano Beach, Deerfield Beach, Boca Raton, West Palm Beach, Miami, Atlanta, and N.Y.C get their unpaid wages. 1 888 WAGE HELP

James is a member of the Florida Bar, Georgia Bar, Southern and Middle District of Florida Federal Bars, Florida Consumer Law Group, and the National Association of Consumer Advocates (NACA). James has handled a variety of public interest cases and has tried numerous cases in both state and federal courts including complex unpaid wages claims.

Do I Have An Unpaid Overtime  Claim?

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Speak to a Daytona FL; Fort Myers FL; Ft Lauderdale FL; Gainesville FL; Jacksonville FL; Keys FL; Lakeland FL; Miami FL; Ocala FL; Orlando FL; Panama City FL; Pensacola FL; Sarasota FL; Space Coast FL; St. Augustine FL; Tallahassee FL; Tampa FL; Treasure Coast FL; West Palm Beach FL; Albany GA; Athens GA; Atlanta GA; Augusta GA; Brunswick GA; Columbus GA; Macon GA; Northwest GA GA; Savannah GA; Statesboro GA; Valdosta GA; ; IL; Carbondale IL; Chambana IL; Chicago IL; Decatur IL; La Salle County IL; Mattoon IL; Peoria IL; Rockford IL; Springfield IL; Western IL  overtime  lawyer now.