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IN EMPLOYMENT LAW

Job Reclassification

Reclassifying employees from salary to hourly is generally a good indicator that the employer was previously breaking the law. An employer is required to pay an hourly worker the minimum wage and overtime when working over forty hours in one week. There are exceptions to this requirement if a worker is considered to be excluded from receiving overtime by meeting certain qualifications. This is where the term “exempt” and “non-exempt” come in. If an employee is not entitled to receive overtime under the Fair Labor Standards Act (FLSA) they are considered exempt and if they are entitled to receive it, they are considered non-exempt.

Every so often an employer may decide to reclassify certain job positions to either switch them from exempt to non-exempt or vice versa.

Why Does Job Reclassification Happen?

There are a variety of reasons why a reclassification may occur but one reason is an employee’s job duties have changed or their responsibilities were based on an outdated job description and no longer comprise the employee’s actual job duties. Additionally, if it comes to an employer’s attention that their employee’s job titles have been misclassified as an exempt or non-exempt, they will reclassify the position.

What Must an Employer do After a Misclassification?

If an employer intends to rectify a misclassification that will have an employee to go from exempt from receiving overtime pay to non-exempt, they cannot simply retroactively pay the employee for what they assume is owed to them. The affected employees must be notified about the reclassification and cannot be forced to accept the retroactive pay to have it be considered as full compensation for the misclassification period.

It is also possible for the Department of Labor (DOL), a federally funded agency which enforces the FLSA, to require that the employer pay fines and damages for misclassifying the employees.

Misclassified Workers Make Headlines:

Several cases for misclassification and reclassification of job titles have made the news recently. Some of their results can be found below:

  • An Arizona judge granted summary judgment to truck drivers for Swift Transportation Co., finding that the drivers were employees, not independent contractors, thus exempting their contracts from federal and state arbitration acts, which specifically exempt “contracts of employment” of transportation workers.
  • The Bob Evans restaurant chain settled an unpaid overtime class action for misclassified assistant managers for $16.5 million. The assistant managers claimed they performed mostly non-exempt duties such as operating the cash register, cooking, and cleaning.
  • FedEx drivers in California alleged that FedEx misclassified them as independent contractors which kept them from earning minimum wage and overtime pay. The drivers received a $228,000 settlement from FedEx.
  • A North Carolina court conditionally certified a nationwide action brought by Uber drivers alleging they are misclassified as independent contractors and wrongfully exempt from receiving overtime pay.

RECORD SETTING AWARDS AND SETTLEMENTS

FOR OUR CLIENTS


$19,100,000

$19.1 Million for Tipped Restaurant Workers.

Workers such as servers, bussers, runners bartenders, barbacks and other tipped workers at a large national casual dining chain alleged they were owed wages. Their claims included but were not limited to: unpaid overtime, spread-of hours, misappropriated tips, uniform-related expenses and unlawful deductions.

$15,900,000

$15.9 Million for Personal Bankers.

The firm was able to recover overtime compensation for personal bankers and others similarly situated at a national bank that operates hundreds of branches throughout the United States. Employees in affected positions claimed they were required to work more than 40 hours a week in order to meet sales quotas but were not compensated overtime for their pay.

$14,500,000

$14.5 Million for Spam Text Victims

Fitapelli & Schaffer was able to recover damages for recipients of unwanted promotional text messages from a popular young adult clothing retailer. The clothing company allegedly violated the Telephone Consumer Protection Act by sending text messages to recipients’ cellular phones without their prior express written consent.

$7,000,000

$7.0 Million for Bank Loan Officers

The firm was able to recover overtime compensation for loan officers at a national bank that operates more than hundreds of branches nationwide. Employees in affected positions claimed they were required to work more than 40 hours a week in order to meet sales goals but were not compensated overtime for their pay.

$5,900,000

$5.9 Million for Commissioned Car Salesmen.

One of the largest auto dealerships in the NYC Metropolitan Area agreed to pay owed wages to its car salesmen. The company was accused of failing to pay salesmen the proper minimum wage, overtime pay, commissions, and made unlawful deductions from their earned wages in violation of federal labor laws.

$4,300,000

$4.3 Million for Personal Bankers

Even though personal bankers at this nationwide bank were classified as exempt from receiving overtime pay, the company routinely required them to work in excess of 40 hours per week. There are federal laws that help protect workers from misclassification and in this situation; Fitapelli & Schaffer was able to recover unpaid overtime for personal bankers throughout the United States.

$4,300,000

$4.3 Million for Entertainers at Gentleman’s Clubs

F&S represented entertainers at a popular gentleman’s club in New York City that claimed the club failed to pay them the proper wages. The entertainers were able to recover owed wages that included unpaid minimum wages, overtime pay, spread-of-hours pay, unlawfully retained tips, unlawful deductions, and uniform-related expenses.

$3,600,000

$3.6 Million for Tipped Employees at Upscale Restaurant

Tipped workers alleged that a Mexican Michelin rated restaurant with 17 locations denied them overtime pay, minimum wages, and call-in pay. Our firm was able to recover wages for these tipped employees that included servers, bussers, bartenders, food runners and barbacks.

$3,400,000

$3.4 Million for Assistant Managers at Bank

Fitapelli & Schaffer successfully recovered unpaid overtime for assistant managers on a salary at a bank with locations nationwide. The salaried workers argued that they were wrongfully classified as exempt from receiving overtime when working over 40 hours per week.

$3,000,000

$3.0 Million for Bank Loan Officers

The fast food chain allegedly misclassified its assistant managers as salaried workers and considered them exempt from receiving overtime pay when working over 40 hours per week. Fitapelli & Schaffer was able to recover overtime compensation for all of the popular fast food chains’ assistant managers nationwide, with the exception of California.

$2,836,000

$2.9 Million for Tipped Restaurant Employees.

Fitapelli & Schaffer was able to recover unpaid minimum wages, overtime, spread-of hours, and unlawful deductions for tipped restaurant workers at a popular dining chain. Affected workers included servers, bussers, runners bartenders, barbacks and other tipped workers.

$2,250,000

$2.25 Million for Tipped Workers at Chain Sports Bar

proper minimum wage and overtime. Fitapelli & Schaffer helped the workers recover owed wages to the following positions: servers, bussers, bartenders, and other tipped workers under federal and state labor laws.

$2,000,000

$2.0 Million for Bank Loan Officers

Fitapelli & Schaffer was able to successfully recover unpaid overtime for loan officers at a nationwide bank that operates over one thousand locations across the United States. Loan officers for the company alleged that even though they were hourly employees and consistently worked over 40 hours per week they were working off the clock and not getting overtime pay.

$1,950,000

$1.95 Million for Health Care Workers

A New York based health insurance provider allegedly had its health care workers working over 40 hours per week but required they submit weekly timesheets that only showed they worked 37.5 hours. Fitapelli & Schaffer was able to successfully recover compensation for unpaid wages, overtime and spread of hours pay.

CONTACT

FITAPELLI & SCHAFFER LLP


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