Wage Wars

WASTE MANAGEMENT firms are more likely to face suits from workers seeking overtime pay than to defend either an employment discrimination or wrongful termination lawsuit. In fact, tens of thousands of workers around the country have gone to court claiming they were cheated out of overtime pay.

Experts in employment law say that these cases, brought under the federal Fair Labor Standards Act (FLSA), have surged in recent years. Congress passed the FLSA, amidst other Depression-era worker-protection laws, approximately 70 years ago. The act set a federal minimum wage, which is now $5.45 per hour, and requires employers to provide premium pay for more than 40 hours per work week. State wage-hour laws often contain additional employee protections, including required breaks and caps on the number of consecutive workdays. Like the federal anti-discrimination laws, the FLSA forbids employer retaliation against a worker who formally seeks to stop a violation of the act.

However, things are not quite that simple. The act also contains a number of exemptions, which can exclude employees from coverage who are classified as “managerial,” “administrative” or “professional.” If, as is often the case, an exemption is misapplied and excludes certain entitled employees from FLSA coverage (and correspondingly reduces labor costs), an employer can face considerable financial liability. The risk is compounded because the FLSA establishes a novel collective action remedy that is similar to ordinary class actions, but far more plaintiff-friendly. As a result, a lawyer can combine a large number of wage-and-hour claims against an employer into one suit that can yield a whopping payout — by verdict or settlement. Besides paying twice the amount of back wages owed, FLSA violators are liable for attorney's fees.

Typically, waste industry companies, no differently from other business sectors, may designate an employee as a manager or administrator, although the daily tasks resemble garden-variety office work. The employee ends up with little or no discretion on how to accomplish the job. If a company classifies its marketing and customer relations people as “outside” salespersons, which is yet another exempt category, it may refuse to pay them overtime. Additionally, workers frequently complain about being forced to work after regular business hours or during breaks.

Where an employer has not already been targeted by a privately filed collective action, the federal government may pick up the slack. The FLSA is enforced by the Wage and Hour Division of the U.S. Department of Labor (DOL), which has wide-ranging authority to follow up on employee complaints or to initiate inquiries on its own. DOL may conduct its investigations by entering workplaces and examining companies' records, and it may file civil and criminal proceedings against lawbreaking employers.