In part one of this podcast, host Sean Harris talk with plaintiff attorney and OAJ past President Bob DeRose about the law on wage and hour cases.
Sean: Hello and welcome to Civilly Speaking, OAJ’s monthly podcast on practical and timely legal issues, I am your host Sean Harris. Our guest today is OAJ past President Bob DeRose with the firm of Barkan Meizlish in Columbus. Bob good morning to you.
Bob: Good morning Sean. How are you?
Sean: I am hanging in there. Our topic today is wage and hour cases and that’s a term that’s you know thrown around, but when we are talking about a wage and hour case what does that even mean?
Bob: Well wage and hour case it encompasses, all the aspects of how an employee is paid. From not being paid over time, meaning that an once employee whose not exempt works 40 hours that next hour there to be paid a premium for every hour thereafter, to minimum wage payments, there is a certain mem amount of payment that each employee is entitled to receive for every hour worked. Those are more of your common notions that most people know about, but it also could be issues where there not being paid the regular rates, not being paid for all the hours they worked, working off the clock is a term that we use. There’s issues on not including bonuses or including all the wages that somebodies entitled to. So it’s on one hand a very simplistic area of law and on the other hand it’s very nuanced in that there are many many pitfalls that employers sometimes unwittingly and unfortunately count in a very calculated ways fall into.
Sean: As I am hearing you describe the very situations where this comes up, I am wondering whether there are considerations as far as size of employer. Does this apply across the board or is there larger employers who have different rules versus smaller employers.
Bob: Yes. So this all started, the wage and hour concept started in the 30s. The Fair and Labor Standards Act, is the federal legislation that gave us the rules by which employers have to pay their employees. The federal statute covers all employees that work for employers that make more than $500,000, not just in earnings, but have $500,000 in goods and services, meaning that there business could be valued at $500,000 or more and do work in interstate commerce, but sometimes you’ll have a small employer that doesn’t meet that threshold, but an individual employee does something in interstate commerce. Think of the Mom and Pop pizza shop. It might not be valued at $500,000, but they take credit cards, payments over the phone, they use a website to which to get there business. When congress wrote this in the 30s they were trying to bring people out of the depression. The whole idea was that instead of having one employee work 16 hours they would somewhat penalize the employer for an 80 hour week for an employee, by making them pay time and a half for every hour after 40, the idea being that he’ll hire another employee instead. It was really a job creation bill, but it has been expanded, many times fold to expect a lot more protection to the employees in the work place. So the idea was to capture as many employees as possible so they would have what you call the enterprise coverage, which is the employer itself, does enough to trigger it or a small employer has an employee in interstate commerce, so that individual coverage they can get it. There is a very few employees that aren’t covered by the Fair Labor Standards Act.
Sean: Sounds like whether it you said enterprise or individual there is a way to get them all.
Bob: Right. Now there are states that have, there are 22 states in the United States that have State Wage and Hour laws that do more than the federal statute. The federal statute is the least you can do for your employees. Twenty-two states, including Ohio, have their own wage and hour statute that do more.
Sean: How does generally, how does Ohio’s wage and hour statute compare?
Bob: It compares on the overtime side they incorporated the Fair Labor Standards Act and you get essentially the same protections as the federal government, however, on the minimum wage side, if you are found to have been a violation as an employer of the minimum wage under the fair labor standard act, you owe your employee there or what they do, you owe them that damage and the judge has the discretion to give liquidated damages up to one extra dollar. So you could get, your exposure, potentially as an employer, is if you owed your employee a dollar you have to pay that back plus the judge can issue liquidated damages up to another dollar, and the statute of limitations under the federal statute is only two years, unless you can prove willfulness, then it goes to three. In Ohio, under the minimum wage, once you show a minimum wage violation it’s automatically treble damages and that’s automatically three years, you don’t have to do anything other than show the violation. So for Ohio protections, with respect to minimum wage, we are probably one of the best states for minimum wage and we are even on the over time.
Sean: That’s refreshingly surprising to hear that Ohio’s actually statutorily somewhat progressive.
Bob: How the legislature giveth and taketh it away because they took away the right to do it as in Ohio on minimum wage as a Rule 23 class, and that follows the federal opt in process as opposed to opt out so you know, but it is still a good statute. Its powerful, it does really good things, but you know.
Sean: We’ll take it.
Bob: We’ll take it.
Sean: Now, and forgive me maybe I call me naïve, but the idea that an employer would not pay an employee minimum wage seems unfathomable to me. Right I mean , that is something that even no lawyers understand. That’s the law you do it. You’re telling me employers get around the minimum wage?
Bob: So the minimum wage violations are generally a little more insidious than just somebody coming into my office and being paid with a paycheck that blatantly says it’s less than the hourly rate. Generally what you find, is an employer tells an employee that we’re going to pay you a salary or I have the right, the employer says to the employee I have the right to pay you a salary and then they work them 60-70 hours a week, and then when they come to our office and we prove that they weren’t entitled to exempt these employees, then we find out when you do the math that when you take these 70 hours they worked into the amount of money they made that’s the typical way we find the minimum wage and then also off the clock. A lot of employers have employees doing a significant amount of work before they start work, during their unpaid lunch breaks, and then after work, and if somebodies working a minimum wage job, every hour that they work beyond the 40 that they are paid for, automatically triggers it into minimum wage and so a lot of times you have to do the math, which I thought in college I could get away with by going to law school, but there is a lot of math involved.
Sean: Now you mentioned a couple terms that I want to circle back to that being exempt versus nonexempt. Tell us about that.
Bob: So the best way I explain is to my clients, anybody else is that the Fair Labor Standards Act applies to everyone. Every employee, including you Sean is entitled to minimum wage and time and a half if they work over forty, but unfortunately for you, you are, that is the premise you start with everybody is entitled to. The employer, as a form of defense can come in and say no Sean Harris is exempted from the FLSA because he is either executive exemption, those are your managers, administrative exemption, you would be a learning professional and I hope highly compensated individual, by which your employer would allow you to not pay you time and a half, but that’s one of the things that I have to educate even some defense council and employers that every employee is entitled to time and a half and minimum wage unless the employer can show they are exempted and there are a list of exemptions and a little bit later I want to talk to you about how that’s changed. There is a pretty significant change coming with that.
Sean: Thanks for listening to part one of our interview with Bob DeRose. Stay tuned for part two where we will discuss the update and changes in the law on wage and hour cases.