When an employer misclassifies employees to make them exempt from wage and hour laws, that is a clear violation of the Fair Labor Standards Act (FLSA). According to the Department of Labor, the number of these types of cases is on the rise. One of the most common situations is when employers misclassify workers as independent contractors when, in fact, they are not. In a recent case in California, several property services workers were awarded more than $2 million in unpaid overtime.
Class action against Field Asset Services, Inc. for misclassification
According to the class action lawsuit, Field Asset Services, Inc. allegedly misclassified 200 workers as independent contractors, although they were actual employees. These employees were denied reimbursements for business-related expenses and overtime pay.
In the first lawsuit filed by only eleven employees, they were awarded more than $2 million in damages, with each class member receiving somewhere between $150,000 and $200,000 for their individual claims. This was just the first of many trials that will be held.
Employment rights were allegedly violated in many ways
During this first trial, the eleven employees testified that their employer threatened to reduce their work assignments if they refused to work seven days a week, incurring substantial overtime for which they were never paid. Their employer also refused to reimburse these employees for certain work-related expenses such as travel to and from training sessions and work equipment they were required to purchase to perform their work-related tasks.
Class action proceedings in federal court
The class was curtained in 2015, approximately two years after it was filed. The class includes all employees classified as independent contractors who started working for the company in January 2009 and who did not work for any other entities more than 30 percent of their time.
The federal judge ruled that the employer had violated relevant overtime laws and left the issue of the damages amount to the jury. The company argued for separate trials for the 200 class members. It argued that there would be significant discrepancies between the compensation the class members would be seeking. As a result, the parties agreed to split the trials up, which is not a common practice in class litigation.
What happens when a misclassification is found?
If an employer is found to have misclassified employees as independent contractors, the economic impact can be significant. An employer can be held liable for minimum wages, overtime compensation, workers’ compensation, unemployment insurance, health insurance coverage, and employment withholding taxes, among other things. Furthermore, these new employees are now able to assert other statutory protections, including their federal antidiscrimination rights.
If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!