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See’s Candy Shops, Inc. v. Superior Court, 2012 WL 5305729 (Cal. Ct. App. 2012)

Pamela Silva sued her former employer, See’s Candy, for various wage-and-hour violations. After certifying a class of current and former California employees, the trial court granted Silva’s motion for summary adjudication on four of See’s Candy’s affirmative defenses. In a writ petition to the Court of Appeal, See’s Candy challenged…

As the federal government wades deeper into the realm of mobile "apps" (among the most useful, of course, the Smithsonian Institution’s “MEanderthal” app, which enables users to morph personal photos into prehistoric images of themselves), various U.S. agencies are promoting new apps that allow the public to access official information from “the palm of [one’s] hand.”

Not to be left behind, the U.S. Department of Labor (DOL) recently rolled out a smartphone app to help employees independently track the hours they work. The “DOL-Timesheet,” as the app has been dubbed, is currently available in English and Spanish for use on the iPhone, iPod Touch, and iPad. The app is designed to assist employees in recording their hours worked and calculating the wages – including overtime – that they’re owed. (Overtime pay is computed at a rate of one and one-half times the employee’s regular rate for all hours worked each week in excess of 40 – though California also has a daily overtime requirement for hours worked in excess of eight.) Users are currently able to view and email summaries of their logged hours and gross pay, and additional features have been promised, including the ability to track tips, commissions, bonuses, deductions, holiday and weekend pay, shift differentials, and paid time off.

Sanders v. City of Newport, 657 F.3d 772 (2011)

Diane Sanders, a utility billing clerk for the City of Newport, Oregon, began suffering health problems, which (according to her doctor) were due to “multiple chemical sensitivity” triggered by handling low-grade paper at work and poor air quality in her work area. Sanders took an FMLA leave, but the city refused to return her to…

The U.S. Department of Labor’s (the “DOL”) Wage and Hour Division recently issued a Wage and Hour Opinion Letter, FLSA 2009-3, addressing how a company can compute overtime payments retroactively for salaried employees it had mistakenly classified as exempt (not overtime-eligible) under the Fair Labor Standards Act (“FLSA” or the “Act”). The DOL reiterated its support for the half-time methodology in calculating back overtime due, endorsing the so-called “fluctuating workweek” model on a retroactive basis for remedying the misclassification of salaried employees. This is a significant development and, in so deciding, the DOL has “weighed in” on an issue that remains a source of lively debate in the federal courts.

Generally, the FLSA requires that overtime pay be calculated weekly (notwithstanding that an employer’s payroll period might be semi-monthly or bi-weekly) and that employees receive one and one-half times their regular hourly rate of pay for each hour worked in excess of 40 hours in a workweek. Here, the employer paid a guaranteed salary bi-weekly and expected the employees to work a minimum of 50 hours per week. The employer’s payroll software even converted the bi-weekly salary to an hourly rate by dividing the salary by 100, without regard to whether the employees worked more or less than 100 hours in the payroll period. When the employer concluded that it had mistakenly classified certain salaried employees as exempt, it wished to pay them back overtime retroactively, using a half-time methodology, reasoning that the employees had already been compensated straight-time for each hour over 40 worked in the workweek.

The DOL agreed. Since the fixed salary covered all the hours the employees worked in a workweek, straighttime already was included in the salary covering the hours worked over 40 and, as a result, the employees needed only to be paid an additional one-half of their actual regular rate for each overtime hour. Important to the DOL’s decision was the fact that the fixed salary was paid to the employees even when they worked less than 100 hours in the bi-weekly payroll period.

The Opinion Letter is particularly noteworthy for its generous interpretation of the fluctuating workweek’s “clear mutual understanding” requirement which, heretofore, many had understood meant that there had to be a “clear and mutual understanding” at the outset of how salary and overtime would be calculated and paid for hours worked. According to this Opinion Letter, the “clear and mutual understanding” criterion does not need to be set forth in writing and intent can be inferred from the parties’ conduct that the fixed salary was compensation for all hours actually worked by the employee in a given week, rather than for a fixed number of hours per week – a stance that adopts the minority view among judicial decisions that have considered the issue.