Tag Archives: Wages

N.D.Miss.: Workers Who Performed Off-the-Clock After-Hours Work in Exchange for Food Were Employees Not Independent Contractors; Food Was Not Adequate Compensation for Work

Newsom v. Carolina Logistics Services, Inc.

This case was before the court on the parties’ competing cross-motions for summary judgment. As discussed here, at issue was whether the defendants were liable to plaintiffs for after-hours off-the-clock side work they performed for defendant cleaning its warehouse. Although the court held that any issue of fact precluded summary judgment with regard to the amount of damages due, the court granted the plaintiff (who participated in the case) summary judgment as to liability and denied the defendant’s cross motion for summary judgment on liability.

The court recited the following facts as relevant:

Shortly after starting his work, Newsom [the plaintiff] made a special arrangement with his center manager, Alfred Taylor, whereby Newsom was permitted to clock out from work after his shift and clean CLS’s warehouse in exchange for a banana box of food. The work consisted of sweeping, mopping, picking up trash, and using a floor cleaning machine to clean the entire warehouse. Newsom Decl. at 1. According to Newsom, he worked approximately four to four and-a-half hours after each shift. In October 2008, Newsom was transferred to CLS’s Olive Branch, Mississippi center. There, Taylor remained his supervisor and allowed the banana-box program to continue. Not long after the move, Newsom found that he could not clean the new center alone and recruited Plaintiff Shanda Bramlett, another CLS employee, to assist him with the more arduous work. Taylor agreed to allow Bramlett to participate in the program, and Bramlett began assisting Newsom in March 2009. Bramlett’s work entailed sweeping floors, cleaning bathrooms, and performing other cleaning tasks. She claims that she worked an average of somewhere between two and three-and-a-half hours after each shift. Taylor assisted Newsom and Bramlett by moving pallets that obstructed their ability to clean the premises. From December 2010 through March 2011, no one was allowed to take anything from the warehouse. Nevertheless, for reasons unexplained in their depositions, both Newsom and Bramlett continued to perform their after-hours work, apparently without any guarantee of compensation.

Describing the issues at bar, the court explained:

It is undisputed that Newsom and Bramlett worked for CLS “off the clock” in exchange for a banana box of food. This case turns on a simple legal question: Does Newsom and Bramlett’s after-hours work constitute a violation of the FLSA? The Plaintiffs advance a simple and persuasive argument why the Court should answer affirmatively. Put simply, the Plaintiffs maintain that, at all times pertinent to the present suit, they worked as CLS employees with CLS’s knowledge and under CLS’s supervision. Judging from the record, CLS’s management appears to have initially adopted this view, at least with respect to Newsom, by sending him a check and an apology letter. Now at the summary-judgment stage of litigation, however, CLS takes a different view of the matter, offering two legal theories why the Plaintiffs cannot recover for their FLSA claims: (1) Newsom and Bramlett acted as independent contractors, not employees, when performing their after-hours work, and (2) even if Newsom and Bramlett were employees, they were properly compensated for their work with food.

Initially, the court rejected the defendant’s contention that the plaintiff performed his after-hours work for defendant as an independent contractor (as opposed to as an employee), thus requiring that all of plaintiff’s hours be treated cumulatively each week for determining defendant’s overtime obligations. Rejecting the defendant’s second contention- that the banana box of food constituted sufficient wages, in lieu of actual wages- the court reasoned:

CLS advances its second contention-that Newsom and Bramlett were compensated appropriately under the FLSA with a brief-and incomplete-reference to the definition of ‘wages’ in the statute, and therefore the Court will give this argument short shrift. Under the FLSA, the term ‘wages’ can include board, lodging, and other facilities as CLS suggests. 29 U.S.C. § 209(m). As an initial matter, it is unclear as to whether banana boxes of food fall within the categories of “board, lodging, or other facilities.” The statute does not mention food, sustenance, or any other similar term. Moreover, the statute continues that in order for “board, lodging, and other facilities” to constitute wages under the FLSA, they must be “customarily furnished by such employer to employees .Id. (emphasis added). The Court declines to opine as to whether banana boxes of food are customarily furnished by CLS to its employees for cleaning services, and since CLS fails to make such an argument, the Court will dismiss it without prejudice. CLS may raise this argument subsequently with respect to damages, provided it advances the argument with cited legal authority.

Thus, the court granted plaintiff-Newsom’s motion for summary judgment as to liability, and left open the issue of damages.

Click Newsom v. Carolina Logistics Services, Inc. to read the entire Memorandum Opinion and Order.

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Filed under Independent Contractor vs Employee, Regular Rate

DOL to Issue Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations

The DOL announced yesterday that it would be issuing proposed amended rules regarding companionship and live-in workers’ eligibility for overtime under the FLSA.  A preview of the announcement from the DOL’s website explains:

“While Congress expanded protections to “domestic service” workers in 1974, these Amendments also created a limited exemption from both the minimum wage and overtime pay requirements of the Act for casual babysitters and companions for the aged and infirm, and created an exemption from the overtime pay requirement only for live-in domestic workers.

Although the regulations governing exemptions have been substantially unchanged since they were promulgated in 1975, the in-home care industry has undergone a dramatic transformation. There has been a growing demand for long-term in-home care, and as a result the in-home care services industry has grown substantially. However, the earnings of in-home care employees remain among the lowest in the service industry, impeding efforts to improve both jobs and care. Moreover, the workers that are employed by in-home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption (i.e., neighbors performing elder sitting), but instead are professional caregivers entitled to FLSA protections. In view of these changes, the Department believes it is appropriate to reconsider whether the scope of the regulations are now too broad and not in harmony with Congressional intent.

Proposed Changes to the Companionship and Live-In Worker Regulations

On December 15, 2011 the Department announced that it will publish a Notice of Proposed Rulemaking (NPRM) to revise the companionship and live-in worker regulations for two important purposes:

  • To more clearly define the tasks that may be performed by an exempt companion
  • To limit the companionship exemption to companions employed only by the family or household using the services. Third party employers, such as in-home care staffing agencies, could not claim the exemption, even if the employee is jointly employed by the third party and the family or household.

Although the Office of Management and Budget (OMB) has reviewed and approved the attached Notice of Proposed Rulemaking (NPRM), the document has not yet been published in the Federal Register. The NPRM that appears in the Federal Register will specify the dates of the public comment period and may contain minor formatting differences in accordance with Office of the Federal Register publication requirements. The OMB-approved version is being provided as a convenience to the public and this website will be updated with the Federal Register’s published version when it becomes available.”

Among other things, the proposed rule would overrule the 2007 holding of the Supreme Court in Long Island Care at Home, Ltd. v. Coke, and require 3rd party employers such as staffing agencies to pay companions and home health workers overtime under the FLSA when they work in excess of 40 hours per week.

Click Notice of Proposed Rulemaking to read more.

 

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Filed under Department of Labor, Exemptions