Tag Archives: payment

Fair Labor Standard Act and Individual Liability

In Torres et al. v. Gristedes Operating Corp. et al., Case No. 11-4035 (July 9, 2013), the Second Circuit Court of Appeals held that a mayoral candidate, a supermarket owner, and an executive can be individually liable for settlement payments arising of a Fair Labor Standard Act class action.

In this case, the parties settled the class action.  A class action is a discrimination case brought by a few plaintiffs on behalf of many employees.  All of the members who agreed to be part of the class (the individuals who were discriminated against) receive their part of the settlement.  In order for a fair disbursement, the Judge must adopt the settlement.

Under the settlement, the defendants agreed to pay $3.5 million to the class.  However, the defendants defaulted on the payments.  The judge’s order allowed the class to enforce the settlement.  Defendants, who sought to change the settlement, stated that they were not bound by the settlement because they were not “employers.”

The Second Circuit Court of Appeals disagreed.  The Court noted that the defendants exercised “operational control” that affected the class’ employment.  For example, based of their decisions, the employees’ wages were affected.  Because defendants were employers, defendants were bound by the settlement.  Based on this decision, defendants now have to pay the owed money.

via Labor Employment Law Blog: Second Circuit Imposes Individual Liability on New York Mayoral Candidate for Fair Labor Standards Act Settlement.

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Filed under civil rights, discrimination, District Court, employment, federal, legal decision, wage

Misclassification of workers and the DOL’s take on it

Labor Employment Perspectives reports on a possible change that the Department of Labor (“DOL”) regarding classification of workers.

DOL suggests that it may push forward changes to the record keeping requirements under the Fair Labor Standards Act (“FLSA”) regulations.  These changes will bring to the forefront issues relating to the misclassification of workers as independent workers when they are, in fact, employees.

On January 11, 2013, the DOL requested comments on a public survey designed to look at worker classification and determine the workers’ knowledge and understanding of employment laws and rules regarding basic laws and misclassification.

The DOL states,

The purpose of this study is to design and administer a new survey to collect information about employment experiences and workers’ knowledge of basic employment laws and rules so as to better understand employees’ experience with worker misclassification…..

The data collection effort with this group will gather information about workers’ employment and pay arrangements and will measure workers’ knowledge about their current job classification, and their knowledge about the rights and benefits associated with their job status.

As a backdrop, in 2010, DOL commissioned a study, which found that 10% to 30% of audited firms for state unemployment insurance had one or more of its employees misclassified as independent contractors.  In the fall of 2010, the DOL proposed a change to the regulations regarding record keeping designed to “enhance the transparency and disclosure to workers of their status as the employer’s employee or some other status, such as an independent contractor…”

In other words, the regulations, if passed as suggested in 2010, would require employers to inform workers of whether they are (1) employees, (2) independent contractors, or (3) other status.  Currently, the law does not require this.

Given their renewed interest, as evidenced by the public survey focused on worker classification, FMLA regulations may change.

 

via Right-to-Know Regulations May Move Back to the Forefront; Time to Check If You Have Misclassified Your Workers! | Labor & Employment Law Perspectives.

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Filed under civil rights, employment, regulations, rules, wage