Best Ohio Overtime Pay Attorney Answer: What can I do if my manager says that I am not eligible for overtime pay because I’m an exempt employee? What kind of overtime compensation am I entitled to if my job broke the law by misclassifying me as an exempt employee? Can my employer pay me less than a time and half for overtime work if I am a salaried employee?
As experienced wage violation attorneys, we deal with a lot of multimillion dollar corporations who will do any to exploit their employees. Saving a couple bucks per employee for each pay period can add up to a lot of money for many employers. And, in the past, our wage and hour lawyers attorneys have written at length about employers’ unfair practice of misclassifying employees as exempt employees so that these employers can refuse to pay their workers overtime wages under the Fair Labor Standards Act (“FLSA“). (See, Are All Professionals Exempt From Overtime Pay? I Need A Lawyer!; Should I Be Paid Overtime Even If I Have The Title Manger? Top Ohio Wage and Hour Lawyer Reply; Top Wage and Hour Lawyer Reply: As A Salaried Employee, Am I Exempt From Overtime Pay?).
As our wage theft lawyers have explained in the past, both federal and Ohio wage laws mandate that covered employers must pay their employees their usual hourly wage in addition to a fifty percent overtime premium for every hour worked over forty hours in a given week. Commonly, this is called paying time and a half for overtime hours. However, employees that perform executive, professional, computer, and outside sales duties may not be covered under the overtime compensation law. Yet, whether or not an employee is exempt is a fact intensive exercise that receives a lot of scrutiny by courts. To this end, employers try, often to their detriment, to classify employees as exempt to avoid paying overtime compensation.
There is also a less known federal regulation found in 29 C.F.R. § 778.114 that allows for the payment of overtime compensation that is less than the widely know “time and a half.” This compensation method is mostly available to non exempt employees. For such employees – often paid an hourly wage – FLSA allows for employers to pay such employees a salary and an overtime wage which is less than a time and half. This kind of compensation is called “Flexible Workweek Method.”According to 29 C.F.R. § 778.114, the flexible workweek method of overtime compensation is allow only when there is a clear agreement between the employer and the employee that the employee will be paid a fixed amount for all hours worked within a week, and when:
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 workweeks 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.
So what happens when an employee complains that they are not being compensated properly for overtime? As a practical matter, the answer to this question is a straight forward one: determine the number of overtime hours worked which were not compensated and multiply that number by 1.5 the employees hour wage rate. But what if the employee is paid a salary? For such a case, a court will have to determine if the employer and the employee had an understanding that the employee was going to be paid a fixed weekly amount regardless of the hours worked. For an illustration of this issue, consider a recent case pending before the United States District Court in Texas against First Investors Financial Services in Houston.
According to this wage theft lawsuit, Victoria Chen claims that she was misclassified as an exempt employee and denied overtime compensation. For a period, Chen worked a workweek beyond forty hours for which she was paid a fixed weekly salary. Accordingly, she wants to be paid a time and half for all overtime worked period of her misclassification. In challenge of this claim, First Investors Financial Services filed a motion for partial summary judgment (which is a request by the defendant employer to throw the lawsuit out), arguing, among other things, that if a fact finder were to determine that Chen was a non exempt employee, her overtime compensation should be calculated using the “Flexible Workweek Method” – which would mean that the Chen’s overtime compensation will be less than a “time and a half.” To counter First Investors Financial Services’ argument, Chen points out that she was not eligible for the “Flexible Workweek Method” because she never agreed to this kind of compensation.
Nonetheless, based on the Court’s ruling on the motion – which denied judgment – there is enough facts in the record to indicate that Chen might have know that she was being paid a fixed amount regardless of the amount of hours she worked within any given week. The court held:
“The [fluctuating-workweek] method of calculating overtime premiums in a misclassification case is appropriate when the employer and the employee have agreed that the employee will be paid a fixed weekly wage to work fluctuating hours.” Black v. SettlePou, P.C., 732 F.3d 492, 498 (5th Cir. 2013). It is not enough to show that the employer paid a fixed salary for fluctuating hours. Instead, the employer and employee must have “agreed that a fixed salary would compensate [the employee] for all of the hours she worked each week.” Id. at 501. “The parties’ initial understanding of the employment arrangement as well as the parties’ conduct during the period of employment must both be taken into account in determining whether the parties agreed. . . .” Id. at 499. The plaintiff has the burden to prove that a nonfluctuating-workweek method should be applied. Samson v. Apollo Res., Inc., 242 F.3d 629, 636 (5th Cir. 2001). …
The present record does not lend itself to summary judgment on the method to calculate overtime. There are factual disputes material to determining whether to apply the nonfluctuating-workweek method or the fluctuating-workweek method. Although determining which method of damages to apply is a question of law for the court, whether the parties agreed to a fixed weekly wage for fluctuating hours is a question of fact. Black, 732 F.3d at 498. When, as here, factual disputes material to deciding the existence and extent of an agreement to pay certain rates or amounts, the question is one of fact for the jury. See Nunez v. Superior Oil Co., 572 F.2d 1119, 1126-27 (5th Cir. 1978) (“Where uncertainty arises either from a conflict of testimony or because the facts being undisputed, fair-minded men may honestly draw different conclusions from them, the question is not one of law, but of fact to be settled by the jury.”).
Several district courts in this circuit have denied summary judgment on whether to apply the fluctuating-workweek method because of factual disputes. See Faniola v. Proteus Servs., LLC, No. CIV.A. H-14-3081, 2015 WL 6666213, at *6 (S.D. Tex. Oct. 13, 2015) (denying summary judgment because of a dispute about whether the parties agreed to a certain wage for all hours worked); Gomez v. Crescent Servs., LLC, 25 F. Supp. 3d 965, 972 (S.D. Tex. 2014) (denying summary judgment because of a dispute over the number of hours worked during the workweek); but see Olibas v. Native Oilfield Servs., LLC, 104 F. Supp. 3d 791, 798 (N.D. Tex. 2015) (court has discretion to make factual findings necessary to selecting a damages model).
The present record presents conflicting inferences as well. On the one hand, the record could show Chen’s agreement that her salary would compensate her for all the hours she worked during a week, including when the hours fluctuated and went over 40 hours in that week. The present record could also support a reasonable inference that Chen did not agree and instead expected to be paid overtime for any hours she worked over 40 in a week. This case falls between Ransom andBlack. Here, as in Black, the employer’s records indicate that it paid the employee a fixed wage for working 40 hours in a week. The First Investors employee handbook stated that exempt employees such as Chen are paid a certain amount for 40 hours of work per week. The employee handbook stated that “[e]xempt employees are paid for eighty hours per pay period. . . .” (Document Entry No. 16, Ex. 3). A pay period at First Investors is two weeks, meaning that an employee is paid for 40 hours of work per week. (Id.). First Investors disputes whether Chen knew about the employee handbook, but cites no authority that this is required for the handbook to be relevant.
Chen submitted a document she terms a “historical base salary document.” (Docket Entry No. 16 at 5). This document appears to show the amount of Chen’s biweekly salary for each year of her employment. Each entry in the document covers approximately one year. Below each entry appears the language “Base Salary: $[amount] per two weeks, 40.0 hours per week.” The quoted language appears consistent with the inference that Chen was paid a certain amount every 2 weeks for 40 hours of work per week, as in Black. First Investors argues that it is not responsible for the “historical base salary document” because it was prepared by an independent payroll provider. First Investors also challenges Chen’s description of what the document shows, arguing that it simply states Chen’s historical salary and that “40.0 hours per week” was not meant to indicate an agreement that working more than 40 hours a week would be paid on an overtime basis.
Thus, it will be up to a jury to decide how Chen’s overtime pay would be calculated. If finds that there was an agreement, Chen would only be entitled to an overtime compensation that is half the calculated hourly rate of pay for the weeks in which she worked overtime. If, however, a fact finder determines that there was no agreement, then Chen will be entitled to time and a half overtime compensation.
Like Victoria Chen if you think that you have been misclassified as an exempt employee, making you ineligible for overtime compensation, but have not agreed with your employer for a fixed weekly wage, you are entitled to be paid a time and a half for hours worked beyond 40 hours a week.
If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call (216) 291-4744.
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