Overtime Ripples (Part 1)

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Robin Frank |

All about employment law: myths, realities, ramifications

SOUTH FLORIDA — Owning and operating a successful drycleaning business requires you to follow a myriad of employment laws. Failing to comply with these laws can result in an expensive lesson.

The federal overtime law applies whether you have one small store, a chain or a plant. Moreover, employees cannot waive their right to overtime. Even if an employee agrees in writing that he or she will not be paid overtime, that person can still sue.

This is why employees sue employers for unpaid overtime or minimum wage violations more often than for any other reason.

Many drycleaning business owners and operators wrongly assume that if an employee works overtime without advance approval, in violation of a written policy, they do not have to pay for that overtime.

However, if the employer knows or has reason to know that the employee will be working an extra shift or worked later than scheduled, the employer is liable and must pay for that overtime. That individual can, however, discipline the employee for violating the policy.

Many employers also do not maintain accurate time records.

In the overtime context, it is the employer’s obligation to keep and maintain accurate time records. A work schedule posted at the employee entrance to the store or plant does not constitute an accurate time record.

If an employee sues for overtime and the company does not have accurate time records, the law allows the employee to estimate the number of hours worked. This could be as simple as the employee stating that he or she worked an average of “X” number of hours per week.

Moreover, if an employee recovers even one penny in unpaid overtime, the employer more than likely will be required to pay double that amount as a penalty.

The overtime law also requires the employer to pay the employee’s reasonable attorney’s fees if the employee wins. If the employer wins, that individual is still responsible for his or her attorney’s fees in most cases.

The federal overtime law is an extremely unforgiving law for employers and is almost entirely skewed in favor of the employee.

It does not recognize that dry cleaners operate at the convenience of their customers, and that plants operate overnight to have cleaned clothes in their stores and on delivery trucks early the next morning.

For example, if an employee in your plant or store is an illegal immigrant, and therefore has no right to work in this country, that person can still sue you for unpaid overtime and you are required to pay him or her for that overtime.

You, as the employer, may also be subject to penalties for hiring an illegal worker. And you may be liable for unlawful retaliation if you report this employee to the immigration authorities.

Moreover, regardless of whether they are owners or managers, those who have the authority to hire, fire, and set pay rates and/or work schedules can be held liable for unpaid overtime and minimum wages, regardless of whether the company is an LLC, S corporation, or some other legal entity.

This means that the owner of the drycleaning store can be individually named in a lawsuit and personal assets can be on the line if a judgment is entered in favor of the employee.

Additionally, successor companies are often substituted after the fact. So, shuttering the store or bankrupting the plant is not an effective way to avoid liability.

Drycleaning store owners and managers get themselves in trouble when they try to avoid paying overtime by classifying employees in a way that would make them exempt from the overtime laws.

There’s no guarantee that the law will see them as such. Paying an employee a salary or giving that person the title of weekend or third-shift manager does not mean the worker is not entitled to overtime.

Being paid a salary simply changes how you calculate the overtime rate.

Likewise, only certain types of jobs are exempt from the overtime requirements. While an employee must be paid a certain salary in order to be exempt, the exemptions focus on the employee’s day-to-day duties and responsibilities, and not the job title.

For example, a presser is not a supervisor if he or she only presses clothes.

The same goes for paying employees on a piece rate or by commission. The fact that an employer pays a spotter based on performance or, for example, the cost of alterations completed has nothing to do with whether that employee is entitled to be paid overtime.

If that employee works more than 40 hours in one workweek, then that employee must be paid overtime. How you pay the employee — salary, hourly, piece rate, and so on — simply dictates how you calculate the overtime compensation and whether the employee must be paid overtime at a time-and-one-half rate or half-time.

Finally, another big issue for those drycleaning operators who provide pickup and delivery services is whether to pay for travel time, lunch breaks, and when the workday starts and ends.

For example, if you pay your delivery drivers to come to the store or plant in the morning and check out a company vehicle before going to the first customer site, then the workday, for purposes of calculating the total hours worked, begins when that person leaves the store or plant and ends when the employee returns.

It doesn’t matter when a driver finishes making deliveries or if traffic delays that person’s return to the store or plant. You must pay the individual.

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an attorney for advice regarding your particular situation.

Check back Thursday for the conclusion.

About the author

Robin Frank

Shapiro, Blasi, Wasserman & Hermann, P.A.

Partner

Robin I. Frank is a partner with the independent law firm, located in South Florida, Shapiro, Blasi, Wasserman & Hermann, P.A. She focuses on labor and employment law.

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