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Best Wage and Hour Lawyer Reply: If I’m a salaried employee, can my employer deduct pay when I take a half a day off from work? Am I entitled to time and a half pay for working 50 hours per week at my job? Can my boss just call me an executive or a professional to avoid paying me overtime pay?

Today’s Fair Labor Standards Act (“FLSA”) example is about a sushi chef, Alex Y. Kim, who sued his employer, Umami Grill & Sushi, LLC and its owner Jennifer Zilliox, because he was not paid overtime for working more than 40 hours per week. This underpaid employee not only sued on his own behalf, but he also sued on behalf other chefs or cooks who are responsible for preparing and serving food at the same employer. Bringing a claim on behalf of other employees under the FLSA for wage theft violations is common and is referred to as a collective action. (see Can I Sue My Employer For Overtime Pay On Behalf Of All Employees? I Need A Lawyer!).

You might think that most FLSA overtime cases involves disputes between he employee and the employer about whether the worker actually worked more than 40 hours per week, because at that point the employer is required to pay a non-exempt employee time and half for all additional time worked. Specifically, the FLSA at 29 U.S.C. § 207(a) requires covered employers to compensate nonexempt employees at overtime rates for time worked in excess of statutorily defined maximum hours while the FLSA’s 29 U.S.C § 216(b) creates the cause of action that allows employees to sue employers who violate the overtime compensation laws.

However, those regular readers of our wage and hour attorneys blogs knows that the time and half requirement only applies to non-exempt employees. (Are All Professionals Exempt From Overtime Pay?; Are Managers Entitled To Overtime Pay? I Need A Lawyer!; Are Outside Sales People Entitled To Minimum Wage? Ohio Lawyer Best Answer!). The list of employees who are specifically exempted from overtime pay requirements can be found at 29 U.S.C. § 213(a)(1), and most commonly include administrative employees, computer employees, executive employees, highly compensated employees, creative professional employees, learned professional employees, teaching professional employees, and outside salespeople. Under the FLSA, an employer may make a deduction from the regular pay of exempt employees because of absences lasting one or more full days. However, deductions may not be made for partial days. See 29 C.F.R. § 541.602(b)(1) (“[I]f an exempt employee is absent for one and a half days for personal reasons, the employer can deduct only for the one full-day absence.”). Thus, even if you are an exempt employee under one of the categories listed above, you automatically become entitled to overtime pay at time and half the moment your employer deducts a portion of a day from your paycheck – such as deducting an hour for leaving early or a half day for going to the doctor.

And, this sets the stage for our wage dispute example.

You see, when an employer, such as the restaurant in this case, cannot dispute that the worker worked more that 40 hours per week, they have to come up with some argument – it is very rare, I mean extremely rare, to see an employer roll over and admit that they violated wage and hour laws under the FLSA. So, when this happens, a great number of employer attempt to misclassify the complaining employee as an exempt employee. Our wage theft attorneys have blogged about this before too. (My Boss Calls Me An Independent Contractor, Am I?; Does Just The Title Manger Stop Me From Getting Overtime Pay? I Need A Lawyer!; Can My Boss Avoid Paying Overtime By Calling Me An Executive? I Need A Wage Lawyer!).

In today’s wage and hour example, that is exactly what happened. The employee alleged in his complaint that the employer paid the sushi chefs a flat salary and did not pay the overtime premium despite the fact that these chefs habitually worked over 60 hours per week. In response, the employer sought to have the complaint dismissed by filing a motion for summary judgment in which it argued that Kim was exempt from the FLSA overtime requirements because he fit into both the bona fide executive exemption and the bona fide professional capacity exemption.

Specifically, the employer, Umami, argued that Kim “was not a simple line or prep cook that followed recipes,” but instead, he created them and managed the sushi department and sometimes the front of the house employees. To counter these arguments, the employee, Kim, argued that he was not paid on a salary basis – which is a requirement for all exempt categories. In support off this argument, Kim submitted a series of paystubs to the court demonstrating that his pay fluctuated from paycheck to paycheck. Kim further argued that his employer’s arguments are contradictory and negate each other because his primary duty (which implicitly limited to one duty) cannot be both management and creative design. While the second argument makes sense in the real world, keep in mind that parties in lawsuits can make alternative arguments. “Primary duty” as used in applying the FLSA means the principal, main, major or most important duty that the employee performs. When courts are deciding what an employee’s primary duty is, the court will consider all the facts regarding the employee’s job, with the significant focus on the character of the workers’ overall job.

Relevant to this sushi chef example, employees who are employed in a bona fide executive or professional capacity are exempt from the overtime requirement. Both of the employers’ asserted exemptions apply to employees compensated on a “salary basis” which means, that the employee “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” Spoken in plain English, this means that your paycheck is the same every week with few exceptions. Again, Kim put his paystubs into evidence that his pay fluctuated. The court observed that on February 4, 2014, the employer paid Kim $1,772.68 for his two-week pay period but that the employer paid him $1,636.32 on February 18, 2014 and $1,909.04 on March 4, 2014 for two weeks’ pay.1 Id. He received credit card tips on top of the “regular” rate listed on his pay stubs. Kim submitted paystubs indicating that he was occasionally paid less than $1,500 for a two-week pay period – which is another FLSA minimum requirement. This evidence included paystubs showing that the employer restaurant paid Kim $1,309.05, $1,454.50, $1,163.60 and $1,018.15, with the lowest paycheck being a paltry $436.35 as his “regular” rate.

The court held that the deductions on Kim’s paystubs did not add up to full-day absences and that the employer failed to offer any other explanation that would explain the fluctuation in the regular rate of pay. Given that this element is an essential and required element to both the bona fide executive exemption and the bona fide professional capacity exemption, the court held that the employer failed to prove that either exemption applied and denied the motion for summary judgment. As a result of concluding that this primary requirement was not met, the court did not reach the remaining requirements of either exemption.

But, since this is an educational blog, our wage and hour lawyers will delve a little deeper. The bona fide executive employee exemption applies when the employer can meet the burden of showing all of these requirements: (1) The employee must be compensated on a salary basis (which is what our lawyers discussed above) at a rate not less than $455 per week; (2) the employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; (3) the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (4) the employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight. While requirements (2) and (3) might be up for debate in our example, Umami did not allege that Kim had the ability to hire and fire, which would also be a complete bar to the employer proving this exemption.

The bona fide professional capacity exemption is a little more complicated as there are two subcategories, the learned professional exemption and creative professional exemption. First, to qualify a worker under the learned professional employee exemption, the employer must prove all of these requirements: (1) the employee must be compensated on a salary or fee basis (again, this is the common requirement) at a rate not less than $455 per week; (2) the employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment as distinguished from work involving routine mental, manual, mechanical or physical work; (3) the advanced knowledge must be in a field of science or learning (law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other occupations that have a recognized professional status); and (4) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction, and requires a degree beyond high school and does not apply to occupations in which most employees acquire their skill through experience outside of schooling. While I am truly amazed by the skills of a good sushi chef, I think we can all agree that this exemption does not apply.

This brings us to the creative professional employee exemption, which requires that an employer be able to prove all of the following: (1) as you probably guessed, the employee must be compensated on a salary or fee basis at a rate not less than $455 per week; (2) the employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. According to the Department of Labor (“DOL”), the requirements for the creative professional employee exemption are typically satisfied by actors, musicians, composers, soloists, artistic painters, writers, novelists, and others as set forth in the regulations. In our example above, the questions will come down to how often the chef can change and vary the menu. However, given that preparing sashimi is simply cutting raw fish in a skilled manner and nigiri is doing the same but putting the raw fish on top of rice, there is going to be a large component of the job that involves no creativity. Moreover, most sushi rolls have been set on the menu for years and are standard. Thus, at best the employer can argue that there is some creativity in creating one or two special sushi rolls per week. As a wage and hour lawyer, I suspect that his will not suffice either.

Thus, Kim looks to be in very good shape as his overtime wage theft claim moves forward.

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 required 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 our office at 866-797-6040.

Disclaimer:

The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me extra when I work on weekend or holidays?”, “My paycheck is short” or “What do I do if my job is stealing money from me?”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.