John W. Stewart
July 22, 2024
An investigation by the U.S. Department of Labor Wage and Hour Division recently uncovered what it alleged to be an unlawful scheme to avoid overtime payments, perpetrated by a Long Island maintenance company, “Professional Building Maintenance Corp.,” and its owner, Brady Patruno.
HOW DID THE COMPANY ALLEGEDLY VIOLATE THE LAW?
According to the Department of Labor, when employees at the company worked more than forty hours in a workweek, they frequently received only “straight-time” pay for that overtime work, rather than the “time-and-a-half” rate required by the Fair Labor Standards Act (“FLSA”), the federal overtime law. The company attempted to hide their failure to pay at the required overtime rate by issuing one check for employees’ regularly scheduled work and another check, from a separate company bank account and/or from straw man corporations, for overtime work at straight-time rates.
As a result of the DOL investigation, over $333,000 in back pay and liquidated damages was recovered on behalf of the 51 employees at Professional Building Maintenance Corp. In addition, the DOL assessed at $15,0432 civil money penalty against the employer.
WHAT IS THE FAIR LABOR STANDARDS ACT?
The Fair Labor Standards Act or the FLSA is a federal law that sets the minimum wage, overtime pay, recordkeeping, and youth employment standards for employees, both in the federal/state/local government as well as the private sector. Covered employees (who are otherwise not exempted under any other statutory provision) must receive overtime pay if they work for longer than 40 hours in a week. This overtime rate must be at least one-and-a-half times their regular rate of pay. For example, if an employee earns $20/hour during their 40-hour workweeks, they are entitled to receive at least $30 in overtime pay for hours they work over 40 in a workweek.
WHAT IS UNPAID OVERTIME?
Unpaid overtime refers to the extra hours spent by employees over 40 in a workweek beyond their regular hours for which they do not receive any additional pay. Unpaid overtime can put financial strain on the worker, and lead to issues like burnout and stress.
WHO IS ENTITLED TO OVERTIME PAY?
Any employee who is covered under the FLSA is entitled to overtime pay for working beyond 40 hours per week. In terms of practice, however, many employers do not compensate their employees for additional hours of work by using creative ways to deny fair pay like improperly calculating regular rates, failing to consider pre-shift and post-shift activities as additional hours, ignoring work performed during the unpaid meal, or wrongly claiming that covered employees are exempt from overtime pay.
HOW FAR BACK CAN EMPLOYEE’S RECOVER UNPAID OVERTIME?
Although the FLSA allows for a maximum recovery period reaching back three years (and often only two years), New York state law allows employees to recover for unpaid overtime reaching back for six years. In other words, New York employees who have been paid for unpaid overtime under federal law reaching back two or three years, may have three to four additional years of damages they can still recover under New York law.
This issue, inherent in Department of Labor investigations in states with longer recovery periods for overtime violations than federal law, can mean that wronged employees may miss their chance to be paid for years of unpaid overtime (and related damages) if they do not act to protect their rights.
If you have questions about your rights as an employee or union member, please do not hesitate to contact McGillivary Steele Elkin LLP at [email protected] or 202-833-8855.
