Tag Archives: economic realities

Illinois Judge Holds that Individual Liability Under FLSA Requires Both Ownership and Operational Control

The definition of an “employer” under the FLSA is, like a number of FLSA provisions, not well defined, as set forth in a long and thoughtful opinion from Judge Manish S. Shah of the Northern District of Illinois. Schneider v. Cornerstone Pints, Inc., 2015 U.S. Dist. LEXIS 166993 (N.D. Ill. Dec. 1, 2015). However, it … Continue Reading

USDOL Issues Administrative Interpretation Reflecting Administration’s View Of “Independent Contractor” Analysis Under FLSA

As previously promised, the Department of Labor today issued its eighth Administrator’s Interpretation (“AI”) since the 2010 implementation of this form of guidance. Today’s Interpretation, as expected, reflects the current Department’s position that the governing analysis is the economic realities test which, in the Department’s view, is used to determine “whether the worker is economically … Continue Reading

WHD Administrator Weil Announces Impending “Administrator Interpretation” Regarding Contractor Status

“Administrator’s Interpretations” from the Wage Hour Division have been relatively few and far between since their implementation in 2010. However, on Friday Administrator David Weil, speaking at a conference at New York University School of Law, indicated his office would be issuing such an interpretation to “clarify” who qualifies as an independent contractor under the … Continue Reading

Pennsylvania Federal Court: Cosmetology Student Not An “Employee” Entitled To Minimum Wage

Last week, a Pennsylvania federal judge held that a former cosmetology school student was not entitled to minimum wage as an “employee” under the Fair Labor Standards Act or the Pennsylvania Wage Payment and Collection Law. Jochim v. Jean Madeline Educ. Ctr. of Cosmetology, Inc., 2015 U.S. Dist. LEXIS 45663 (E.D. Pa. Apr. 8, 2015). … Continue Reading

Nevada Supreme Court: Exotic Dancers Are Employees Under State’s Law

In a setback for that state’s thriving adult entertainment business, the Nevada Supreme Court yesterday ruled that Sapphire Gentleman’s Club improperly classified its 6000+ semi-nude performers as independent contractors rather than employees under Nevada’s minimum wage law.  Terry et al. v. Sapphire Gentlemen’s Club et al., case number 59214, 10/30/14. The Nevada court, citing policy … Continue Reading

Brooklyn Federal Court Rejects Allegation That Not-For-Profit Board President Was An Employer

Many courts, including the Court of Appeals for the Second Circuit, have ruled that under certain circumstances an individual can be a statutory “employer” under the Fair Labor Standards Act, liable for minimum or overtime wages usually along with a corporate entity.  The scope of such potential liability and the precise formulation of the “economic … Continue Reading

Ohio Court Concludes That Construction Trade Association Is Not Joint Employer

In recent months, we have discussed courts adjudicating claims seeking to hold municipalities and business’ clients‘ liable as “joint employers” for alleged unpaid wages under the FLSA.  A new decision rejects a similar challenge brought with respect to a trade association.  IBEW, Local Union No. 8 v. King Elec. Servs., 2014 U.S. Dist. LEXIS 63462 … Continue Reading

Eastern District of New York Senior Judge Deems FLSA Allegations Of Overtime, Contractor Misclassification Inadequately Pled

Following the Second Circuit’s clarification that an FLSA plaintiff must provide “sufficiently developed factual allegations” regarding hours worked (DeJesus v. HF Mgmt. Servs., LLC, 726 F.3d 85, 89-90 (2d Cir. 2013)), District Courts both within and outside the Circuit have sought to apply that standard to Fair Labor Standards Act complaints.  In one of the … Continue Reading

Supreme Court Declines Catsimatidis’ Invitation To Review FLSA Liability

Though the high court recently has accepted other petitions for certiorari on FLSA issues, today the Court declined Gristede’s owner and former NYC mayoral candidate John Catsimatidis’ request that the Court take up his case and review the imposition of individual liability imposed by the Second Circuit.  Catsimatidis v. Irizarry, 2014 U.S. LEXIS 1802 (2014).  … Continue Reading

New York Federal Court Finds Bank Properly Classified Financial Services Consultant As Independent Contractor

Reviewing a working arrangement common in the financial services industry, particularly with respect to experienced professionals, Judge Katherine B. Forrest of the Southern District of New York recently upheld the Royal Bank of Canada’s (RBC) treatment of a “consultant” as an independent contractor under the federal and state wage/hour and anti-discrimination laws.  Sellers v. Royal … Continue Reading

Reversing District Court, Eleventh Circuit Orders Trial of Cable Installers’ Claims of Misclassification Under FLSA

In a lengthy analysis of the “economic realities” test as applied to cable installers, the Court of Appeals for the Eleventh Circuit reversed Judge Elizabeth A. Kovachevich of the Middle District of Florida’s 2012 decision finding cable installers to be properly classified as independent contractors.  Scantland, et al. v. Jeffry Knight, Inc., et al., 11th Cir. … Continue Reading

Second Circuit Finds Gristede’s Owner to Be Individually Liable “Employer” Under FLSA

Reviewing a district court decision issued two years ago, the United States Court of Appeals for the Second Circuit has affirmed a ruling finding John Catsimatidis, the CEO and owner of New York-area grocery chain Gristede’s (and a New York Mayoral Candidate), individually liable for wages under the FLSA based on the “economic realities” of … Continue Reading

Manhattan Judge Analyzes Appropriate Standard for Intern Determination, Denies Class Certification

In a significant victory for employers in the series of hotly contested cases regarding the status of interns, the Hearst Corporation successfully defeated class certification under the New York Labor Law. Xuedan Wang v. Hearst Corp., 2013 U.S. Dist. LEXIS 65869 (S.D.N.Y. May 8, 2013).  As important to wage/hour practitioners and employers as the Court’s ruling … Continue Reading

Texas Federal Court Agrees With Employer: Gate Attendants Are Independent Contractors Within the Meaning of FLSA

The Department of Labor often challenges an employer’s independent contractor classification, even when such classification is a matter of long-standing, industry practice.  Such disagreements can result in DOL audits or even DOL litigation seeking alleged unpaid minimum wage and overtime, as well as private enforcement actions. In a recent victory for employers involving litigation brought by … Continue Reading

Eleventh Circuit: “Externs” Who Received Academic Credit Are Not Employees Under FLSA

As discussed in this space just last week, there is an ongoing war regarding compensation of interns under the FLSA. In a victory for employers, last week, the United States Court of Appeals for the Eleventh Circuit ruled that individuals completing externships relating to their enrollment in MedVance Institute’s Medical Billing and Coding Specialist program were … Continue Reading

Federal Courts Finds Question of Fact as to “Employee” Status of Casino “Guides” and Related Issues

As we have detailed many times, the legal determination as to when an individual providing services is performing work which must be compensated under the minimum wage and overtime provisions of the FLSA is not always simple. This inquiry and related questions were at issue in Rui Xiang Huang v. J&A Entm’t Inc., 2012 U.S. Dist. … Continue Reading

Tenth Circuit: Security Guard Employee Was Separately A “Contractor” Janitor, No Need To Aggregate Hours Worked

From time to time, employees offer (or are offered an opportunity) to provide further services to their employer in a “freelance” or "contractor" capacity. However, given the control exercised by the employer in the course of the general employment relationship, these arrangements can result in allegations that the “hybrid” employee/contractor is in fact at all times … Continue Reading

Court Holds Minority Owner of Construction Business Not Employer Under FLSA

FLSA litigation against medium-sized businesses continues, and a common tactic  in such cases is to assert that one or more owners or managers of the business is the plaintiff’s "employer" under the statute, and thus individually liable for the allegedly unpaid minimum wage and/or overtime. See generally Herman v. RSR Sec. Servs., Ltd., 172 F.3d 132 … Continue Reading

Colorado Federal Court Upholds Inclusion of Employee Performing Expediting Function In Tip Pool

Employers who maintain a tip pool are likely aware that, depending on the employer’s state of operation and prevailing law, such a tip pool typically can consist only employees who are both “customarily and regularly” tipped and who are not themselves “employers” or those with employer authority. Last year, we discussed a court’s recognition of the … Continue Reading

Long Island Judge Finds Company Properly Classified Its Drivers As Independent Contractors Under FLSA and State Law

Whether a business can properly classify an individual as an independent contractor excluded from FLSA coverage is a question governed by the “economic realities” of the relationship between the individual and the business for whom she or he performed services. Under New York State Law, a related but distinct test examines the “degree of control exercised … Continue Reading

Eleventh Circuit Confirms: DHL Not Joint Employer of Contractors’ Couriers

In the latest judicial analysis of wage-and-hour plaintiffs’ ongoing quest to hold larger entities liable as “joint employers” of a vendor’s employees, the Court of Appeal for the Eleventh Circuit has affirmed DHL Express’ victory in an Alabama federal court on this issue. Layton v. DHL Express United States, 2012 U.S. App. LEXIS 13978 (11th Cir. … Continue Reading
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