Employment/Wage & Hour: Misclassification/Improper Paycheck Deductions

Misclassification Cases Under The Fair Labor Standards Act
Under the federal Fair Labor Standards Act, an employee who works more than 40 hours a week is, as a general proposition, entitled to time and a half overtime. This is true unless the person is an “exempt” employee under the FLSA and fits within one of the statute’s exemptions. There are exemptions for “executive” positions, “administrative” positions, and “professional” positions, among others. The basic thrust of the various exemptions is to exempt from the overtime requirements those individuals with meaningful roles in the direction or management of the company. In recent years, either through lack of knowledge or a willful desire to save money, many companies have disregarded the dictates of the FLSA, required their workers to work in excess of 40 hours and not paid overtime. Workers will be given titles that sound significant – e.g., “Assistant Store Manager,” “Sales Manager,” “Exemption Analyst” – but whose actual jobs do not meet the criteria for exemption under the statute.

How Might I Know If I’ve Not Been Paid Properly?
The following is a non-exhaustive list of factors to consider in analyzing a FLSA misclassification case. The operative test is a qualitative analysis as opposed to a pure mathematical formula:

  • A title such as assistant store manager, assistant managers, cable installers, call center employees, and Loan Officers/Loan Consultants/Loan Processors
  • Worker worked more than 40 hours a week and received the same amount of wages per week, regardless of the amount of hours worked
  • Worker had:
    • Little to no authority to hire or fire employees
    • Little to no authority to establish salaries
    • Little to no authority to give promotions or demotions
    • Followed standard, company-wide policies and procedures in performing duties and responsibilities
    • Not permitted to make relatively important decisions about how to do his job without direct supervision or approval from supervisors
    • Does (or did) not regularly supervise two or more employees

Cases in this area generally are brought as collective cases or class actions. KO&L attorneys have successfully obtained certifications on behalf of thousands of employees against numerous companies. We have also obtained many settlements, including a $42 million settlement against Staples, a $9.2 million settlement against BJ’s Wholesale Warehouse Club, a $4.9 million settlement against Hewitt, Inc., among others. Our attorneys are available to review potential claims in this area of the law at no charge to you. If you believe you may have a claim, click here to send us your information.


Improper Paycheck Deductions

In addition to unpaid overtime claims, our clients have often told us that their employers have taken deductions from their pay or commissions.  You may have been harmed by these practices.  Many states forbid employers from deducting costs and expenses from pay and only certain items can be deducted.  Yet, companies will try to pass to their employees costs for such things as buying and cleaning uniforms, tools necessary for the job, tickets received while working, damages occurred while on the job, or shortfalls from cash registers.


You should Contact Us if you (or someone you know) has experienced deductions for: (1) which no written authorization has been provided; (2) earned commissions such as for advertising or selling costs or support costs; (3) performance issues, such as failing quality checks or not meeting quotas; (4) missing /damaged /spoiled /lost employer property or tools; (5) expenses normally paid by your employer, such as fees for credit cards, performing background checks or using or renting  company equipment; (6) discipline, such as for being late to work, too much break time or otherwise for failing to follow company policies; or (7) tip pools.


If your current or former employer has done any of the things described here, you (and other employees) may be entitled to a significant award of back pay. Please Contact Us or call us at 914-934-9200 for a free and confidential case evaluation.