San Antonio based restaurant China Sea, agreed to pay $504,577 to 82 former workers for minimum wage, overtime and record-keeping violations. China Sea used two sets of books, one real, one not so real. Some kitchen workers were paid a salary that did not equate to minimum wage. And some workers worked 60 hours per week, but their hours were not recorded. And, servers were not properly paid. The Department of Labor filed suit against the corporate owner, PCXAC LLC and WKHK Investment LLC, which own three China Sea restaurants. The suit originally sought over $1 million in damages on behalf of 164 workers.

The lawsuit was filed in 2012. The parties completed discovery and apparently agreed to a settlement after a mediation session. See Cause No. 12-CV-1210. See San Antonio Express News report.

President Obama announced that the administration will change regulations to allow overtime pay for managers who make up to $970 per week. The current level is $455 per week, which makes the overtime regulation largely meaningless. Indeed, this regulation has lost much of its effectiveness since 1975, when it applied to 65% of management. Now, under the current level, the overtime requirement only applies to 12% of managerial workers. See CNN news report. The increase to $970 per month means overtime will apply to 47% of managers.

For decades, this overtime provision has provided a scam for employers. They could often save money by re-naming a position as managerial, assign some minimal supervisory duties,  and thereby avoid having to pay overtime. The current salary level of $455 per week was set by Pres. Bush in 2004.

I previously wrote here about the lawsuit against Lady Gaga for overtime pay.  Lady G did not do well in her deposition.  Now, the federal district court denied her ladyship’s motion for summary judgment (or some motion like that).  See New York Post report.  So, Lady G settled.  That is wise.  She would not have testified well.  Lady Gaga is the sort of defendant juries get upset with.  See Employment and Labor Insider post.  

A deposition is when one side has the opportunity to cross-examine an opposing witness prior to trial.  It is a key event in the discovery process.  Lady Gaga, whose real name is Stefani Germanotta, is being sued for unpaid overtime by a former legal assistant.  Jennifer O’Neill claims she is owed $393,000 for 7,168 hours of overtime pay.  That is a lot of overtime.  Lady Gaga claims Ms. O’Neill was paid $75,000/year in salary.  Apparently, Lady Gaga is claiming that Ms. O’Neill was on salary and exempt from overtime pay. 

During her deposition, Lady Gaga insisted this lawsuit was "bulls—t" and the lawyer knows it.  She (Ms. O’Neill) thinks she is the "queen of the universe," and she did not want to be a slave to one, because, said the Lady, "I’m the queen of the universe everyday."  

Lady Gaga insisted her employees work no more than eight hours per day, although the time is spaced throughout the day. You don’t get a schedule you can like "play f—ing Tetris at your desk for hours."  "This is — when I need you, you’re available."  See ABA Bar Journal report

In a deposition, the witness should always remember that everything said can and probably will end up in front of a judge and jury.  It is easy to forget during a deposition that the real audience is the judge and jury, not the opposing party and her lawyer.  These statements will likely haunt Lady Gaga during her lawsuit.  And, if she cannot document her assistant’s time better than when "I need you," she may well lose this lawsuit. 

We always hear about the million dollar judgment in an employment case.  But, in reality, far more cases result in $30,000 judgments or less.  This is especially true in federal court.  In the case of Barney v. Hill Country Shooting Sports Center, No. SA-11-CV-268, a jury found in favor of the plaintiff regarding her wage claim.  The lawsuit, filed in U.S. district court, concerned overtime wages.  The San Antonio jury awarded $29,500 in unpaid overtime wages.  The judge later awarded another $29,500 in liquidated damages and $10,000 in attorney’s fees.  

So, no, contrary to what many plaintiffs expect, the jury did not get mad and award the maximum amount allowed.  They simply, calmly awarded the amount which the plaintiff was owed.  The trial result, like many, did not appear in the San Antonio Express News.  The jury quietly did its job and then went home.  That is how the judicial system is supposed to work. 

Wal-Mart has settled Department of Labor claims that many workers were mis-classified as exempt.  Exempt workers are not paid overtime.  4500 workers were part of the suit.  The settlement includes $4.8 million in unpaid overtime wages.  See Workplace Prof Blog.  As Workplace Prof mentions, Wal-Mart seems to always be in violation of one workplace law or another.  Civil penalties of over $463,000 were also assessed due to the repeated nature of these violations.  See DOL news release

The DOL investigation was regarding vision center managers and asset protection coordinators for Wal-Mart. 

 The US Department of Labor has filed suit against Child Protective Services for failure to pay overtime wages.  The state actually enjoys sovereign immunity from such suits.  So, if DOL does not initiate such suits, such a lawsuit might not be possible.  According to the suit, CPS workers have been told to work off the clock.  Yes, that would be a classic violation of the Fair Labor Standards Act.  See San Antonio Express News report.  The suit is the result of a lengthy DOL investigation. 

The suit seeks some $1 million in overtime wages for some 800 current and former CPS workers.  As if the caseworkers did not have enough to deal with already, they must also deal with overtime wage violations.  CPS continues to suffer from high turnover and low morale.  

 Periodically, the Department of Labor issues guidance on interpretation of the regulations and statutes regarding the Fair Labor Standards Act.  The FLSA is the statute hat requires overtime pay and payment of minimum wage.  The DOL has issued an opinion recently stating that it now believes mortgage loan officers are not exempt employees and are, therefore, entitled to overtime pay.  According to one commentator, this new interpretation will apply to employees who work primarily in the employer’s place of business and to employees who do not engage in cold-calling, contacting potential customers.  If you think you may have employees who fit these criteria, you should seek guidance regarding changes to be made as soon as possible. 

 Many employers seek to reduce cost by hiring independent contractors to perform some work.  The employer does not have to pay benefits to an independent contractor.  But, what is an independent contractor?  The IRS uses one test to determine whether an employee is a true independent contractor and not just an employee under a different name.  Department of Labor uses a different test.  But, a recent decision by the Fifth Circuit Court of Appeals addresses factors found in both tests.  

Cromwell, Et Al v. Driftwood Contractors, Inc. Et Al was decided on Oct. 12.  Cromwell and another man worked for Driftwood performing a great deal of electrical work in the aftermath of Hurricane Katrina.  Cromwell and his co-worker invested $70,000 in providing their own equipment, says Mike Maslanka.  They provided their own insurance and paid their own taxes.  They were so busy that they could not work for anyone else.  That factor made the difference, says Mr. Maslanka.  Because, the Fifth Circuit concluded they were so economically dependent on Driftwood that they were actually employees, and were not independent, at all.  

This was a Fair Labor Standards Act lawsuit.  Cromwell and his co-worker had filed suit for overtime wages.  By claiming overtime wages, Cromwell and his co-worker were claiming they were employees, not independent contractors.  Summary (ie, "quick") judgment had been granted in favor of the employer, Driftwood, at the lower court.  But, the Fifth Circuit reversed that summary judgment, a rare move for the Fifth Circuit.  So, economic dependence can make a difference, even to the Fifth Circuit.