Employers in New York and throughout the country may struggle with how to label their workers. In a case filed in the United States District Court for the Central District of California, four 7-Eleven franchisees claimed that they were employees of the company. The case was filed in November 2017, and it claimed that all other franchisees were employees of the company. Therefore, they should be allowed to bring claims under the Fair Labor Standards Act.
The Fair Labor Standards Act established the federal minimum wage and rules for overtime pay, but the landmark 1938 legislation allows employers in New York and around the country to pay a lower hourly wage to workers who earn tips. What is known as the tip credit has been at the center of a number of contentious labor disputes, and the Department of Labor made its position on the issue clear in 2011 by adopting a controversial rule. The rule declares that tips are a worker's personal property and prohibits employers from using them if they did not claim the credit.
Employers in the New York area who do not have up-to-date wage payment policies would do well to give the matter serious thought in light of a recent court case heard in the United States District Court for the Southern District of Indiana. In the case, an employee who worked as branch administrator sued her employer, alleging that the defendant failed to pay the plaintiff for overtime hours worked and further failed to classify her as exempt under the standards set forth in the Fair Labor Standards Act.
Restaurants in New York, especially those that provide delivery services, could benefit from a review of their payment practices. Legal complaints from drivers for pizza restaurants have been on the rise because of alleged violations of the Fair Labor Standards Act. Although the law does not directly state how delivery drivers should be compensated, lawsuits generally claim that drivers did not receive pay that equaled minimum wage.
The Fair Labor Standards Act requires most employers in New York and around the country to pay their workers at a rate at least equal to the federal minimum wage, but the landmark 1938 law does not provide clear instructions for calculating wages and hours. Several federal courts have ruled that employers may base these calculations on workweeks rather than determining compensation on an hour-by-hour basis, and the Department of Labor, which is the federal agency tasked with administering the law, has not objected to this method being used.
The case of a disgruntled ferry boat operator in another state illustrates a potential defense strategy for employers in New York confronted by accusations of retaliatory discharge. Someone citing the Fair Labor Standards Act when suing a former employer could pursue damages that include back pay, front pay while unemployed, legal costs and reinstatement to a position. To control the potential costs of a settlement, an employer might exploit an angle known as failure to mitigate damages resulting from the termination.
A decision from the U.S. Court of Appeals for the 2nd Circuit, which includes New York, has affirmed the legality of employer-imposed arbitration requirements for claims involving the Fair Labor Standards Act. Although a previous ruling from the 2nd Circuit had required court supervision of settlements reached through arbitration, the panel of judges did not view this requirement as a ban on arbitration. The judges did not link judicial review of settlements with a prohibition on alternative dispute resolution methods.
As cryptocurrencies like Bitcoin, Litecoin and Etherium grow in the public consciousness and become more relevant in everyday life, New York employers may have incentives to pay their employees in crypto. Such an action might bring cryptocurrencies further into everyday use and help employers attract tech-savvy personnel. Entrepreneurs and business owners interested in paying employees in this way might run afoul of wage and hour regulations, however. Employers should be aware of the potential pitfalls of paying wages in other than U.S. currency.
The federal Fair Labor Standards Act is a complex law that governs most employers in New York. Employers are required to comply with its wage and hour provisions and to pay a minimum hourly wage to their statutory, non-exempt employees. Workers sometimes file claims against their employers, alleging that the employers have violated the overtime and minimum wage provisions of the law. As one case recently demonstrates, employers may be able to defend against these lawsuits.