Category Archives: Department of Labor

WHD Proposes Update To FLSA Recordkeeping Requirements With “Right To Know Under The Fair Labor Standards Act” Regulation

According to the DOL’s Fall 2010 Semi-Annual Agenda, the Wage and Hour Division of the Department of Labor (WHD), intends to issue updated FLSA recordkeeping requirements in the near future.

Several of the initiatives the department is considering could have major impacts on both employees and employers.

For example, the WHD is considering a proposed rule that would require covered employers to notify workers of their rights under the FLSA, and to provide information concerning hours worked and wage computation, similar to the Wage and Hour laws some states like New York and California already have on the books.

Under the proposed rule, employers would be required to perform a written classification analysis for every worker that is excluded from FLSA coverage. In addition, the employer would have to disclose the individual analysis to each worker, and retain the documents in the event of a WHD investigation.

Thanks to Valiant for alerting us to this significant development.

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Filed under Department of Labor, Exemptions, Recordkeeping

DOL Issues Proposed Rulemaking Revising Wage Calculations For H-2B Workers

According to a DOL press release just issued:

A proposed rule that seeks to improve the H-2B temporary nonagricultural worker program and better protect American workers has just been promulgated. “The proposed rule, to be published in the Federal Register tomorrow, addresses the calculations used to set wage rates for H-2B workers.

The H-2B program allows the entry of foreign workers into the U.S. when qualified American workers are not available and when the employment of foreign workers will not adversely affect the wages and working conditions of similarly employed American workers. The H-2B program is limited by law to a program cap of 66,000 visas per year…

The previous administration promulgated H-2B regulations and did not seek comment in the rulemaking process on the data used to set wage rates. Since the 2008 final rule took effect, however, the department has grown increasingly concerned that the current calculation method does not adequately reflect the appropriate wages necessary to ensure American workers are not adversely affected by the employment of H-2B workers. On Aug. 30, the U.S. District Court for the Eastern District of Pennsylvania ruled that the regulations issued by the department in 2008 had violated the Administrative Procedure Act. The court ordered the department to promulgate new rules that are in compliance with the APA concerning the calculation of the prevailing wage rate in the H-2B program no later than 120 days from the date of the order. Today’s announcement begins the process of complying with the order and with achieving the department’s goal of fully protecting the job opportunities and wages of American workers. The department anticipates a future rulemaking that will address other aspects of the H-2B program.

The proposed regulation would require employers to pay H-2B and American workers recruited in connection with an H-2B job application a wage that meets or exceeds the highest of: the prevailing wage, the federal minimum wage, the state minimum wage or the local minimum wage.

Under the proposed rule, the prevailing wage would be based on the highest of the following:

  • Wages established under an agreed-upon collective bargaining agreement.
  • A wage rate established under the Davis-Bacon Act or the Service Contract Act for that occupation in the area of intended employment.
  • The arithmetic mean wage rate established by the Occupational Employment Statistics wage survey for
    that occupation in the area of intended employment.

The proposed rule eliminates the use of private wage surveys, as well as the current four-tier wage structure that differentiates wage rates by the theoretical level of experience, education and supervision required to perform the job, a system that is not relevant to the unskilled positions generally involved in the H-2B program.

Interested persons are invited to submit comments on this proposed rule via the federal e-rulemaking portal at http://www.regulations.gov.”

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Filed under Department of Labor, H-2B Visa - Guest Workers

203(o) Does Not Extend To PPE Worn By Employees That Is Required By Law, The Employer Or Due To The Nature Of The Job; Changing Clothes May Be Principal Activity, Starting Continuous Workday, Says DOL

Administrator’s Interpretation No. 2010-2

Today, the DOL issued its second Administrative Interpretation of 2010.  The subject of this interpretation was the oft-litigated issue of the definition of “clothes” under 29 U.S.C. 203(0), which has been the subject of countless so-called “donning and doffing” cases. 

Significantly the DOL concluded that:

(1)  “Based on its statutory language and legislative history, it is the Administrator’s interpretation that the § 203(o) exemption does not extend to protective equipment worn by employees that is required by law, by the employer, or due to the nature of the job. This interpretation reaffirms the interpretations set out in the 1997, 1998 and 2001 opinion letters and is consistent with the “plain meaning” analysis of the Ninth Circuit in Alvarez. Those portions of the 2002 opinion letter that address the phrase “changing clothes” and the 2007 opinion letter in its entirety, which are inconsistent with this interpretation, should no longer be relied upon.”

and

(2) “Consistent with the weight of authority, it is the Administrator’s interpretation that clothes changing covered by § 203(o) may be a principal activity. Where that is the case, subsequent activities, including walking and waiting, are compensable. The Administrator issues this interpretation to assist employees and employers in all industries to better understand the scope of the § 203(o) exemption.”

To read the entire Administrator’s Interpretation, click here.

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Filed under Department of Labor, Donning and Doffing

Mortgage Loan Officers Do Not Typically Qualify For The Administrative Exemption, Says DOL

Administrator’s Interpretation No. 2010-1

The Wage and Hour Division, under the current Administration, has issued its first Administrative Interpretation Letter.  The introductory text of the Letter is below:

“Based on the Wage and Hour Division’s significant enforcement experience in the application of the administrative exemption, a careful analysis of the applicable statutory and regulatory provisions and a thorough review of the case law that has continued to develop on the exemption, the Administrator is issuing this interpretation to provide needed guidance on this important and frequently litigated area of the law.  Based on the following analysis it is the Administrator’s interpretation that employees who perform the typical job duties of a mortgage loan officer, as described below, do not qualify as bona fide administrative employees exempt under section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).

Typical Job Duties of Mortgage Loan Officers

The financial services industry assigns a variety of job titles to employees who perform the typical job duties of a mortgage loan officer.  Those job titles include mortgage loan representative, mortgage loan consultant, and mortgage loan originator.  For purposes of this interpretation the job title of mortgage loan officer will be used.  However, as the regulations make clear, a job title does not determine whether an employee is exempt. The employee’s actual job duties and compensation determine whether the employee is exempt or nonexempt.  29 C.F.R. § 541.2.

Facts found during Wage and Hour Division investigations and the facts set out in the case law establish that the following are typical mortgage loan officer job duties: Mortgage loan officers receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity.  Mortgage loan officers collect required financial information from customers they contact or who contact them, including  information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens.  They also run credit reports.  Mortgage loan officers enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided.  They then assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products. Mortgage loan officers also compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings.  See, e.g., Yanni v. Red Brick Mortgage, 2008 WL 4619772, at *1 (S.D. Ohio 2008); Pontius v. Delta Financial Corp., 2007 WL 1496692, at *2 (W.D. Pa. 2007); Geer v. Challenge Financial Investors Corp., 2007 WL 2010957 (D. Kan. 2007), at *2; Chao v. First National Lending Corp., 516 F. Supp. 2d 895, 904 (N.D. Ohio 2006), aff’d, 249 Fed.App. 441 (6th Cir. 2007); Epps v. Oak Street Mortgage LLC, 2006 WL 1460273, at *4 (M.D. Fla. 2006); Rogers v. Savings First Mortgage, LLC, 362 F. Supp. 2d 624, 627 (D. Md. 2005); Casas v. Conseco Finance Corp., 2002 WL 507059, at *1 (D. Minn. 2002).”

To read the entire Letter click here.

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Filed under Department of Labor, Exemptions, Wage and Hour News

W.D.Wash.: Notwithstanding Prior DOL Consent Judgment, Plaintiffs May Pursue Full Damages Under State Law, Because Appropriate Damages For Salary Misclassification Are Time And A Half Not FWW, And Damages Under Consent Judgment Represented Only Partial Relief

Monahan v. Emerald Performance Materials, LLC

This case was before the Court on the parties cross-motions for summary judgment.  The issue was whether a prior consent judgment entered into by the DOL and the Defendant employer precluded this subsequent case, based solely on Washington state law, despite the fact that Plaintiffs were not on notice of the prior proceedings, did not participate in the prior proceedings, and Plaintiffs did not receive full damages due them under the prior consent judgment.  Because the damages awarded previously–based on FWW, rather than time and a half–were insufficient, and Plaintiffs were not parties to the prior litigation, the Court found that they were not precluded from pursuing their full time and a half damages due them.  Further, the Court held that although the consent judgment barred a subsequent FLSA action, it did not preempt or preclude a claim for the additional damages due, solely under the relevant Washington state law.

Discussing the relevant procedural background, the Court stated:

“Immediately after discovering the potential violation in overtime pay for twelve-hour shift employees, Emerald, through counsel, reported the potential overtime pay violation to the U.S. Department of Labor, Wage and Hour Division, in Ohio (where Emerald is headquartered). After investigation, the Department of Labor determined that a violation occurred. On May 27, 2008, the Department filed a complaint in U.S. District Court for the Northern District of Ohio seeking to enjoin Emerald from continuing to violate the Fair Labor Standards Act (“FLSA”) and from continuing to withhold overtime compensation due to eighty-eight (88) employees, including all ten plaintiffs in this matter, who worked twelve-hour scheduled shifts and were paid according to Section 17A of the CBA.

The Department of Labor reviewed Emerald’s time and payroll records to calculate the amount of overtime back wages due. The Department of Labor determined that Article 17A of the CBA provided for payments of a fixed weekly amount of compensation regardless of the number of hours worked in any particular work week. The Department of Labor and Emerald entered into a Consent Judgment that enjoined Emerald from violating the overtime provisions of the FLSA and further required Emerald to tender payment to each of the subject employees in an individual amount listed in the Consent Judgment. The total amount tendered was $241,308. On July 29, 2008, U.S. District Judge Lioi entered the Consent Judgment, which set forth the specific amount of back wages due and owing to each employee.”

Plaintiffs and all other employees affected by the Secretary’s lawsuit in Ohio did not receive notice of the lawsuit, did not participate in any way in the lawsuit, did not have standing to appeal the Consent Judgment and did not have knowledge of the lawsuit until sometime after the defendant began distributing checks for unpaid overtime wages to them in August 2008.

Seventy-eight (78) employees listed in the Consent Judgment accepted the overtime back wages tendered to them. The ten plaintiffs in this case rejected the tendered amounts. On October 10, 2008, plaintiffs filed this lawsuit seeking overtime compensation under both the Federal FLSA and the Washington Minimum Wage Act (MWA). Plaintiffs are claiming back wages commencing in October 2005, before Emerald became the plaintiffs’ employer. Plaintiffs claim that Emerald has “successor liability.” Plaintiffs allege at paragraph 8 of their complaint that the Department of Labor in the Ohio action did not properly calculate the overtime back wages due.”

Discussing the proper time and a half calculation for overtime damages due in a salary misclassification case, the Court stated:

“Both the FLSA and MWA overtime provisions require an employer to pay time and one-half the regular rate of pay for all hours worked in a work week in excess of 40. 29 U.S.C. § 207 and RCW 49.46.130(1). Under the Washington Administrative Code, the term “regular rate” is determined “by dividing the amount of compensation received per week by the total number of hours worked during that week.” WAC 296-128-550. Similarly, under the United States Department of Labor Wage and Hour regulations at 29 C.F.R. § 778.109, an employee’s regular hourly rate of pay is determined “by dividing his total remuneration for employment (except statutory exclusions) in any work week by the total number of hours actually worked by him in that work week for which such compensation was paid .” Therefore, “regular rate of pay” is the same under both the FLSA and the MWA. Plaintiffs’ claims for overtime compensation under the FLSA and the Washington MWA are identical.

The Ohio District Court entered a judgment ordering payment of overtime using the flexible work week method. That judgment disposed of all claims under federal law but left open the question whether identical language under Washington law should be interpreted in the same manner as the Ohio Court interpreted federal law. There is no clear guidance from the Supreme Court on the subject and cases from different circuits seem to be split in cases with comparable or analogous circumstances. The Ninth Circuit has not weighed in on the issue.

First, the Court resolves the issue of preemption by determining that the CBA provision in question is clear and unambiguous. The parties intended to segment the wages earned by 12-hour shift employees using the flexible work week methodology. No further interpretation of the provision is necessary or possible. Because the interpretation of a CBA is not required, the state claims are not preempted in this case. Lividas v. Bradshaw, 512 U.S. 107, 125 (1994); Cramer v. Consolidated Freightways, Inc., 225 F.3d 683, 691 (9th Cir.2001). Defendant’s Motion for Summary Judgment on the issue of preemption [Dkt. # 39] is DENIED.

Next the Court must review the applicable regulation and the interpretive case law to determine whether Emerald is entitled to the employer-friendly flexible work week method of calculating overtime pay under Washington state law.

Plaintiffs allege that the overtime compensation due to plaintiffs in the Ohio Consent Judgment was incorrectly calculated. The Department of Labor calculated the regular rate of pay as set forth in 29 C.F.R. § 778.109, determining that the overtime compensation due to plaintiffs was one-half the regular rate times the number of hours in excess of 40 in a work week. The federal court in Ohio, in calculating back wages, used the “fluctuating work week” method set forth in 29 C.F.R. § 778.114. This regulation allows overtime to be calculated at only half of the regular rate, rather than time and one-half the regular rate of pay under the FLSA and the MWA:

An employee employed on a salary basis may have hours of work which fluctuate from week to week and the salary may be paid him pursuant to an understanding with his employer that he will receive such fixed amount as straight time pay for whatever hours he is called upon to work in a work week whether few or many. Where the clear mutual understanding of the parties that the fixed salary is compensation (apart from overtime premiums) for the hours worked each work week, whatever the number, rather than for working 40 hours or some other fixed weekly work, such a salary arrangement is permitted by the act if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those work weeks in which the number of hours he works is greatest, and if he receives extra compensation, in addition to such salary, for all overtime hours worked at a rate not less than one-half his regular rate of pay. Since the salary in such a situation is intended to compensate the employee as straight time rates for whatever hours are worked in the work week, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the work week into the amount of the salary to obtain the applicable hourly rate a week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirements because such hours have already been compensated at the straight time regular rate, under the salary arrangement.  29 C.F.R. § 778.114(a) (emphasis added).

It is undisputed that using this method would not result in a hourly rate below the statutory minimum wage, nor is there any dispute that the number of hours plaintiffs worked each week fluctuated. The parties dispute whether the “clear mutual understanding” requirement extends only to being paid a fixed weekly salary regardless of the number of hours worked, or whether it also includes an understanding that plaintiffs will be paid overtime. Likewise, the parties disagree about whether the regulation also requires that the employee actually have been contemporaneously paid overtime.

There is no Ninth Circuit case law directly interpreting this aspect of the regulation. Plaintiffs direct the Court’s attention to the district court decision in Russell v. Wells Fargo & Co., 2009 WL 3861764 (N.D.Cal.2009), while the defendant cites to Tumulty v. FedEx Ground Package Sys., Inc., 2005 WL 1979104 (W.D.Wash). Plaintiffs argue that because Emerald was not paying its employees overtime contemporaneously throughout the period in dispute, it could have no clear understanding with the employees about overtime and the rate of overtime pay to be paid. Plaintiffs argue that because there is no “clear mutual understanding” and no contemporaneous overtime pay, the flexible work week methodology is not available to Emerald here.

Although the state law of Washington is identical to the FLSA regarding calculation of overtime using the flexible work week method, this Court must choose between two conflicting lines of federal decisions. One line of cases adopts a common sense approach that requires only that so long as the parties (employer and employee) reached a clear mutual understanding that while the employee’s hours may vary, his salary will not, then the calculation of overtime pay in a subsequent action brought under the wage laws would be half-pay for each hour over 40 in a week. These courts did not require that the employee know that he would receive overtime compensation or have actually received it contemporaneously. Clements v. Serco, Inc., 530 F.3d 1224 (10th Cir.2008); Valerio v. Putnam Assoc. Inc., 173 F.3d 35, 39-40 (1st Cir.1999); Blackman v. Brookshire Grocery Co., 835 F.2d 1135, 1138 (5th Cir.1988). If the Court follows this line of cases, the Ohio judgment will represent full compensation owed the plaintiffs and this case is at an end without further payment to plaintiffs, beyond that which has already been tendered.

The second line of cases looks more closely at the language of the applicable regulation and requires both a clear mutual understanding of the parties that the fixed salary is compensation (apart from overtime premiums) for the hours worked each work week and contemporaneous payment of overtime as earned.

Here, because Emerald did not pay plaintiffs any more for overtime hours (hours worked in excess of 40 hours each week) the flexible work week method of payment for overtime hours at half the regular rate would give way to the predominant rate of compensation at time-and-a-half. This approach has been adopted by District Courts around the country: Russell v. Wells Fargo & Co., 2009 WL 3861764 (N.D.Cal.); Scott v. OTS Inc., 2006 WL 870369, *12 (N.D.Ga.); Hunter v. Sprint Corp., 453 F.Supp.2d 44, 58-62 (D.D.C.2006); Cowen v. Treetop Enters., 163 F.Supp.2d 930, 941 (M.D.Tenn.2001); Rainey v. Am. Forest & Paper Assoc., 26 F.Supp.2d 82, 99-102 (D.D.C.1998). The Court’s review of these cases, to include Overnight Motor Transport Co. v. Missel, 316 U.S. 572 (1942), and its consideration of the background and policy of the FLSA, convinces it that the flexible work week method cannot be used to calculate overtime retroactively (where it has not been paid contemporaneously with the overtime work) for the purposes of determining damages under Washington State law. The plaintiffs are entitled to pay at the rate of time-and-a-half for every hour of overtime time worked during the period of time covered by plaintiffs’ claims.

Washington courts recognize the “persuasive authority” of the federal Fair Labor Standards Act and regulations promulgated pursuant to it when construing MWA provisions that are similar to those of the FLSA. Inniss v. Tandy Corporation, 141 Wash.2d 517, 524-25, 7 P.3d 807 (2000). Both the FLSA and the MWA authorize the use of the Flexible work week methodology. 29 C.F.R. § 778.114; WAC 296-128-550.

The Washington Supreme Court has expressly found that 29 C.F.R. § 778.114 provides guidance when determining the applicability of the flexible work week method under the MWA. Inniss, 141 Wash.2d at 524-25.

29 C.F.R. § 778.114(a) sets out five prerequisites for application of the flexible work week method. Griffin v. Wake County, 142 F.3d 712, 715 (4th Cir.1998). The plain terms of 29 C.F.R. § 778.114(c) provide that unless “all the legal prerequisites” for applying the flexible work week method are present, an employer cannot avail itself of the flexible work week method for calculating overtime wages. In such cases where the flexible work week method cannot apply, the “statutory” method of multiplying the employee’s regular hourly rate by 1.5 and then by the number of hours worked over 40 in each work week is the applicable overtime pay computation method.

One of the prerequisites under 29 C.F.R. § 778.114(a) for applying the flexible work week method is payment of the mandatory 50% overtime premium contemporaneously with payment of the employee’s regular straight time pay.   Russell v. Wells Fargo & Co., 2009 Westlaw 3861764, at *3 (N.D.Cal.2009). Defendant paid plaintiffs no wages at all for the hours for which plaintiffs seek recovery of unpaid overtime wages. Defendant therefore did not satisfy the contemporaneous overtime pay prerequisite of 29 C.F.R. § 778.114(a).

Another prerequisite for the flexible work week method of overtime calculation to apply is that the employer and employee must have reached a “clear mutual understanding” at the outset of their employment relationship that the employee’s fixed salary would compensate the employee for all hours worked.   Griffin, 142 F.3d at 715. This understanding must include an understanding that the employee will be compensated for his overtime work at a rate of 50% of his regular hourly rate. Russell, 2009 Westlaw 3861764, at *5.

The parties lacked the clear mutual understanding required by 29 C.F.R. § 778.114(a) as evidenced by the fact that plaintiffs were paid nothing for the hours worked over 40 in various work weeks. If the employee receives no pay for overtime hours worked, the parties could not have understood that the employee was to be paid the requisite 50% overtime pay premium.

Defendant cannot avail itself of the flexible work week overtime pay computation method because two of the five prerequisites for application of that methodology were unsatisfied. The proper overtime pay computation method will be the statutory method described above.”

Thus, the Court concluded, since the Defendant was not entitled under the FLSA or Washington law to use the FWW to calculate the back-wages due for Plaintiffs, and the DOL consent judgment did not preempt the instant action, Plaintiffs were entitled to seek their proper time and a half damages under Washington law, notwithstanding the prior consent judgment.

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Filed under Department of Labor, Fluctuating Workweek

11th Cir.: Receipt And Signing WH-58 Form And Cashing Of The Employer’s Check Is Sufficient To Effect A Waiver Of Right To Sue Under FLSA

Blackwell v. United Drywall Supply

Plaintiffs were employed by Defendants.  In September 2007, they sued Defendants pursuant to the Fair Labor Standards Act (FLSA).  Plaintiffs alleged that, from 2002 forward, Defendants intentionally violated the Act by failing to pay them properly for overtime.  Plaintiffs further alleged that, in 2007, “as a result of an investigation by the United States Department of Labor involving allegations of the improper payment of overtime compensation to its laborer employees, [United Drywall] made payments to various employees for past due overtime compensation.”  Plaintiffs alleged that Defendants retaliated against Williams for his complaints to the Department of Labor regarding overtime violations.  And, Plaintiffs alleged that the payments made as part of the Department of Labor supervised settlement were “far lower than what the employees were legally due.”  They sought allegedly unpaid overtime compensation for three years before the filing of the complaint and attorney’s fees and expenses pursuant to § 216 of the Act.  The Court below granted Defendants’ Motion for Summary Judgment holding that Plaintiffs’ signing of the DOL WH-58 form and cashing of settlement checks was a valid waiver of their FLSA rights.  On appeal, the Eleventh Circuit affirmed.

Framing the issue before it, the Court explained, “Defendants moved for summary judgment, arguing, among other things: (1) that Plaintiffs had waived their right to sue under the Act when they cashed checks from United Drywall pursuant to the 2007 settlement between the parties supervised by the Department of Labor, and (2) that Plaintiffs are exempt employees under the Motor Carrier Exemption in the Act (“the Exemption”) and therefore are not entitled to back pay pursuant to the Act. Plaintiffs opposed the motion, arguing that there were genuine issues of fact regarding whether they had knowingly waived their rights to sue and whether the Exemption applied.  After considering arguments and evidence from both sides, the district court granted Defendants’ motion for summary judgment. The court held that, because Plaintiffs had received Department of Labor form WH-58 (which contained a statement that if Plaintiffs accepted the back wages provided in conjunction with the form, they would give up their rights to bring suit under the Act) and because Plaintiffs had cashed the checks provided in conjunction with the WH-58 forms, Plaintiffs had waived their rights to sue Defendants for the payments they sought under the Act.  The court entered judgment for Defendants.  Plaintiffs appeal the judgment.”

Addressing and denying Plaintiffs’ appeal, the Court reasoned, “Plaintiffs argue that the district court erred in finding waiver because Plaintiffs did not knowingly and intentionally waive their rights to sue. They argue that the WH-58 form provided to them by the Department of Labor is ambiguous and did not put them on notice that, by cashing the checks, they would waive their rights to sue for additional back pay. Defendants argue that the district court correctly found waiver and that the judgment can be supported on the additional ground that the Exemption applies to bar Plaintiffs’ claims. In their reply brief, Plaintiffs respond that affirmance of the judgment based on the Exemption would not be proper because the Exemption is not applicable to Defendants’ business as a matter of law or, in the alternative, there are genuine issues of material fact regarding the application of the Exemption.

We affirm the judgment. We find no error in the district court’s holding “that receipt of a WH-58 form and cashing of the employer’s check is sufficient to effect a waiver of the right to sue under the FLSA.”  There is no dispute that Plaintiffs received WH-58 forms in connection with the checks written by United Drywall and given to Plaintiffs by the Department of Labor as part of the supervised settlement between United Drywall and its employees. Those forms are receipts for payment of “unpaid wages, employment benefits, or other compensation due … for the period up to and including 05/20/2007 … under … The Fair Labor Standards Act….” They contain this language:

NOTICE TO EMPLOYEE UNDER THE FAIR LABOR STANDARDS ACT-Your acceptance of back wages due under the Fair Labor Standards Act means that you have given up any right you may have to bring suit for back wages under Section 16(b) of that Act.     ( Id.)

The WH-58 forms then proceed to describe the types of recovery and statutes of limitations under § 16(b) of the Act. We agree with the district court that these forms unambiguously informed Plaintiffs that, if they cashed the checks provided with the forms, they would be waiving their rights to sue for back pay. And, there is no dispute that Plaintiffs cashed the checks. Therefore, the district court correctly determined that ‘both Plaintiffs have waived their right to sue.  Affirming the judgment on waiver grounds, we do not address the parties’ arguments regarding application of the Exemption.’ “

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Filed under Affirmative Defenses, Department of Labor, Settlements

New Jersey Labor Department Investigator Admits To Taking $1.8 Million In Bribes From Owners Of Temporary Labor Firms He Was Hired To Investigate

As reported in The Star-Ledger on March 31, 2009:

“A New Jersey Labor Department investigator from Camden County admitted on Monday to taking some $1.8 million in bribes from owners of temporary labor firms he was hired to investigate.

A second investigator, who lives in Salem, was also charged in the scheme that allegedly involved these men looking the other way when these agencies broke the law.

Joseph Rivera, 53, of Winslow, a senior investigator for the state, pleaded guilty to soliciting and accepting a bribe, and tax evasion.

Also charged in this scandal was 71-year-old James Peyton, a field investigator with the Department of Labor. Police believe the Salem man began accepting cash bribes in 2005 and took as much as $8,000 in cash each quarter.

“The conduct described by two of these defendants … was driven by pure greed,” said Acting U.S. Attorney Ralph Marra. “Mr. Rivera’s corrupt actions lined his own pockets, and provided temporary labor firms with an unwarranted advantage against those employers who operate lawfully.”

The owner of one of these temp businesses also pleaded guilty Monday, and two others were charged for their alleged involvement.

As a senior investigator, Rivera was responsible for inspecting temporary labor firms with workers in southern New Jersey to verify their compliance with state wage and hour laws.

Federal prosecutors said in a court document that Rivera charged temporary employment agencies 25 cents per hour their employees worked not to notice irregularities with their tax withholdings and other payroll violations. He also would recommend these temp agencies to companies looking for workers.

Between 2002 and 2008, Rivera said he raked in $1.86 million from 20 firms.

He also admitted to trying to cover up this scheme by filing false tax returns.

For tax year 2007, Rivera claimed on a tax return that he had $89,696 in taxable income, when, in fact, his total taxable income was nearly $500,000.

These companies provide workers to other firms for a flat hourly rate with the agreement they are responsible for making sure the workers are documented, withholding payroll taxes, and covered with worker’s compensation insurance.

By getting these investigators to look the other way on some of these responsibilities, these companies make bigger profits.

At least one of the alleged bribe payments was made at the Deptford Mall, authorities said, adding the conversation was caught on tape. On Feb. 13, Peyton allegedly met with one of these temp agency owners at the mall, received $800 in cash, and said he would help the firm “stay out of trouble,” court documents indicate.

Another time, he also reportedly told the firm’s manager that the temp agency would only have to report 70 percent of the hours worked by these employees. For his services, Peyton allegedly received $700.

Although he has not pleaded guilty, Peyton Ð who was charged on Monday with bribery Ð has reportedly spoken with an IRS agent and admitted to receiving such payments.

Peyton was responsible for auditing employer records, reviewing quarterly tax filings and other duties related to making sure companies complied with tax laws.

The three managers of these temporary labor firms all live in Philadelphia and were charged with paying bribes.

They are: Yohan Wongso, 27; Channavel “Danny” Kong, 37; and Thuan Nguyen, 37.

Wongso pleaded guilty Monday and faces 18 to 24 months in prison.

As part of his plea agreement, Rivera will forfeit two homes, a 2008 Lexus, $120,000 in cash and a collection of valuable coins. He also will turn over five gold plates and four silver bars.

Rivera faces up to 15 years in prison when he is sentenced on July 6. Although the judge has final say, the two sides agreed on Monday to not object to Rivera receiving a sentence of between eight and 10 years.”

To read the full original article go to http://www.nj.com/sunbeam/index.ssf?/base/news-4/1238476203173240.xml&coll=9


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Labor Agency Is Failing Workers, Report Says

Steven Greenhouse reports in today’s New York Times that the Wage and Hour Division of the Department of Labor is severely lacking when it comes to its enforcement responsibilities:

“The federal agency charged with enforcing minimum wage, overtime and many other labor laws is failing in that role, leaving millions of workers vulnerable, Congressional auditors have found.

In a report scheduled to be released Wednesday, the Government Accountability Office found that the agency, the Labor Department’s Wage and Hour Division, had mishandled 9 of the 10 cases brought by a team of undercover agents posing as aggrieved workers.

In one case, the division failed to investigate a complaint that under-age children in Modesto, Calif., were working during school hours at a meatpacking plant with dangerous machinery, the G.A.O., the nonpartisan auditing arm of Congress, found.

When an undercover agent posing as a dishwasher called four times to complain about not being paid overtime for 19 weeks, the division’s office in Miami failed to return his calls for four months, and when it did, the report said, an official told him it would take 8 to 10 months to begin investigating his case.”

To read the entire article go to http://www.nytimes.com/2009/03/25/washington/25wage.html?hp#

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