The fact that an employee receives a salary does not without more mean that the employee is exempt from overtime pay requirements. Employers frequently make a mistake by automatically assuming that any employee who is paid a salary is not entitled to overtime pay. A case which illustrates the liability of an employer which mistakes this mistake is Goldsmid v. Lee Rain, Inc., 2014 U.S. Dist. LEXIS 14737 (D. N. J. February 6, 2014) (Irenas, J.), where the court found that a salaried employee was entitled to overtime pay and when the employer terminated the employee after he complained about not receiving overtime pay, the court also found that the employee has a claim for retaliation.
In Goldsmid, the Plaintiff was employed at an irrigation business and worked in multiple roles. When first hired, the employee began working at the front counter, where he primarily waited on customers; he also worked in the warehouse. While working in the warehouse, the employee moved from an hourly wage to a fixed salary. Even though the employee worked 45 hours per week, he was not paid overtime. One year after being moved to the salaried position, the employee’s accountant provided him with a fact sheet from the U.S Department of Labor Wage and Hour Division that explained how the Fair Labor Standards Act (FLSA) mandated overtime pay for work weeks in excess of forty hours. Shortly after becoming aware of the federal overtime pay requirements, the employee began sharing the information with co-workers and management and he also discussed with management the fact that he was working more hours than he had previously. After the employee worked for 3 more months, he was terminated for what the employer claimed was “disruptive” behavior and because he was a poor performer as an employee. The employer primarily relied on one occasion where the employee threw a box across the shop, in full view of his supervisors after he was disciplined.
The employee filed litigation claiming that the employers’ pay practices violated the FLSA and that his termination violated the FLSA’s retaliation provision. The Court found that the record demonstrates that after the employee moved from an hourly wage to a fixed salary his weekly work hours exceeded 40 hours on a number of occasions and in many weeks were in excess of 45 hours without proper overtime compensation required by the FLSA.
Under the FLSA’s anti-retaliation provision, it is unlawful to discharge any employee because the employee has filed any complaint or instituted or caused to be instituted any proceeding. To establish a prima facie case of retaliatory discrimination, a plaintiff employee must demonstrate that: (1) the employee engaged in a protected activity, (2) the employer undertook an adverse employment action against the employee, and (3) there was a causal link between the employee’s protected action and the employer’s adverse action. To engage in a protected activity, an employee need not formally file a written complaint with an employer; a verbal complaint that provides notice of the allegations to the employer is sufficient to form the basis of a FLSA retaliation claim. After making the prima facie case, the burden shifts to the employer to articulate a legitimate, non-retaliatory reason for the adverse action. If successful, the burden of production returns to the plaintiff employee who must show by a preponderance of the evidence that the employer’s reason was false, and that the true reason for the adverse employment action was retaliation.
In Goldsmid, the court found that the employee brought his overtime wage concerns to his direct supervisor and discussed his concerns about his salary with management, which was sufficient to for the employee to satisfy the protected activity requirement. Further, the court found that since the employee was fired from his position he established a prima facie retaliation claim because though his termination was not immediate, not long after management had conversations regarding the employee’s salary and hours and he was terminated. The court also found that because it was just one day after the employee was terminated that a new hire started, an inference could be made that the decision to fire was made weeks earlier but delayed to the day before his replacement would start. Thus, the court held that the undisputed evidence regarding the timing of the employee’s firing and hiring of a replacement creates a question of material fact and is therefore sufficient to enable the employee to move forward to trial.
For the same reasons the court found that the employee could proceed to trial with his FLSA retaliation claim, the court also found that he could go to trial with his claim under the New Jersey Conscientious Employee Protection Act (CEPA), as the employee’s complaint about wages could also be construed as complaint under New Jersey wage law.
Goldsmid illustrates two key points which often arise in FLSA litigation. First, in determining if a salaried employee who works more than 40 hours per week is entitled to overtime pay, it is essential to evaluate the employee’s duties and determine where or not there any overtime exemptions apply. Second, any attempt by an employee to inquire as to eligibility for overtime pay is protected activity and an employee can not be terminated for questioning an employer’s pay practices. For more information on unpaid overtime, the FLSA and Abramson Employment Law see http://www.job-discrimination.com/lawyer-attorney-1126494.html