Wage and Hour Issue Articles

Criminal Conviction Upheld for Failure to Pay Wages

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            The Connecticut Supreme Court upheld the criminal conviction of an employer who failed to pay wages, even though the affected employees agreed to defer payment of their accrued earnings. State v. Lynch, 287 Conn. 464 (2008). The employer began missing its biweekly payroll when it experienced cash flow problems. The owner met with his employees and obtained their implied agreement to delay payment of both past and future wages until the company acquired sufficient revenue to pay them. Some time later, each employee quit and then filed claims with the Connecticut Department of Labor for unpaid wages of more than $250,000. The Labor Department asked the Attorney General to criminally prosecute the owner.

Recovering Sales Draws and Advances Paid in Excess of Earned Commissions

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            Sales representatives often are paid a “draw” against future earned commissions. When a representative leaves the company, and has been paid a draw that exceeds actual earned commissions, employers will forfeit the overpayment, unless the situation has been addressed in an agreement between the parties.

Store Manager Duties Key to Avoiding Overtime Eligibility

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            In a recent case the Eleventh Circuit Court of Appeals found a Florida grocery chain violated the Fair Labor Standards Act (“FLSA”) when it failed to pay overtime to store managers working more than forty hours per week. Rodriguez v. Farm Stores Grocery, Inc., 2008 U.S. App. LEXIS 4817 (11th Cir. March 6, 2008).

Penalties for Misclassifying Employees as Independent Contractors

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            Employers are sometimes confused whether individuals providing services should be classified as employees or independent contractors. Getting it right is now even more important as Connecticut has recently amended its workers’ compensation laws to increase the penalties for misclassifications. Previously, employers who knowingly and improperly characterized employees as independent contractors, and therefore failed to provide required workers’ compensation coverage, were considered guilty of a class D felony and subject to a fine of $300 for each misrepresentation.

Time Spent Clearing Security Not Compensable

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            The Second Circuit Court of Appeals recently held that time spent by employees undergoing security checks when entering their place of employment is not compensable under the Fair Labor Standards Act (“FLSA”). Gorman v. Con. Ed. Corp., 2007 U.S. App. LEXIS 12450 (2d Cir. 2007). The case involved employees at a nuclear power plant who were required to undergo lengthy security procedures upon entering or exiting the facility. The process intensified following the attacks on September 11.


 

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