Working overtime is a good way to increase your income. Unless, of course, your employer doesn't pay you for that time. There are federal laws that protect an employee's right to be paid for overtime work, including paying a premium for that time. Nevertheless, there are employers who take significant steps to avoid paying overtime, and it is all against the law.
The FLSA guarantees payment for overtime
The Fair Labor Standards Act (FLSA) requires employers to pay their workers "time and a half" for all work that exceeds forty hours a week. There are some specific exceptions to this rule. Despite this clear mandate, there are many employers who try various methods to avoid paying the premium wage for overtime, while still reaping the benefits from their hard-working employees. A recent case, decided in December 2014, demonstrated just how far some employers will go to dodge their responsibility.
Perez v. Oak Grove Cinemas, Inc.
The Department of Labor filed suit against several companies owned and operated by David Emami. The allegations were based primarily on failure to pay overtime. The employees involved were construction and maintenance workers for Emami's movie theater, Oak Grove Cinemas, Inc., or a property management company. Emami and his wife, Diana Emami employed a very elaborate scheme to avoid compliance with the overtime laws.
Elaborate scheme to avoid paying overtime
The Emamis required their employees to keep a record of their work hours on two separate time cards every day. They were then issued two separate checks for each pay period. One check was from Oak Grove Cinemas, with applicable withholdings and deductions. The other check was issued by a separate entity owned by the Emamis, with which these employees were classified as independent contractors. These employees often worked more than sixty (60) hours each week
The Court found intentional avoidance of FLSA requirements
The employer in this case asserted that the employees wanted to be classified as independent contractors. The court rejected this purported reason, partly because the employees did not meet any of the criteria for an independent contractor classification. Furthermore, Mr. Emami had been associated with 35 business entities in Oregon and was certainly familiar with wage and hour laws, including those regarding overtime exemptions.
Indeed, one of the Emami's employees testified that he was told by Mr. Emami that he would receive two separate checks so there would not be more than 40 hours per week on the cinema's payroll.
Results of the trial
On December 17, 2014, after a four-day bench trial, the district court ordered the defendants to pay $256,145.13 for unpaid overtime wages which had been denied to these employees, plus an additional $256,145.13 in liquidated damages.
If you believe your employer has failed to pay you minimum wage or overtime pay in violation of the Fair Labor Standards Act, or if you have any other questions regarding your employment rights, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.