Wednesday, January 24, 2018

Despite Shutdown, Essential Employees Must Be Paid on Time

At midnight on January 20, 2018, the federal government ran out of money. While members of Congress and the White House continued to negotiate a continuing resolution to fund the government, a large portion of the federal bureaucracy shut down. However, federal employees who provide services involving the safety of human life or the protection of property are considered essential and are instructed to continue to report to work. Additionally, the federal government is required to pay these “excepted” or “essential” employees, on their regularly scheduled payday, for the time they worked during the pay period – whether or not Congress has passed a budget.

In 2013, the federal government shut down from October 1 through October 16. Essential employees, like correctional officers at federal prisons, continued to work through this time. On October 11 – the government’s regularly scheduled payday for pay period 21 – these essential employees were not paid for any time they worked from October 1 through October 5 (the last day of pay period 21). Losing a third of a paycheck can be, and was, devastating for some families.

While the government eventually paid the essential employees for their October 1 through October 5 work, KCNF partner Heidi Burakiewicz filed a lawsuit on their behalf arguing that the federal wage and hour law, the Fair Labor Standards Act (“FLSA”), requires that employees be paid on their regularly scheduled pay day for all the hours they worked during a pay period, regardless of whether the government was shut down.

The government opposed the lawsuit and argued that another federal law, the Anti-Deficiency Act (“ADA”), prohibits the government from spending money when specific appropriations are not in place, as is the case during a shutdown. The chief judge of the United States Court of Federal Claims did not buy that argument and held that the ADA does “not … cancel defendant’s obligation to pay its employees in accordance with the manner in which the FLSA is commonly applied.”

Because it was obvious, and mostly undisputed, that the government’s actions in this situation violated the FLSA, the only requirement remaining was for the court to determine if the government could demonstrate that it had reasonable grounds for believing its failure to pay timely wages to essential employees during the shutdown was allowed. The government argued its position that the ADA precluded timely payment of wages to plaintiffs during the shutdown because, in the absence of appropriations, there was no source of appropriated funds by which federal agencies could comply with the FLSA. The court responded:
Here, defendant made no inquiry into how to comply with the FLSA, instead relying entirely on of the primacy of the ADA. By its own admission, the government did not consider—either prior to or during the government shutdown—whether requiring essential . . . employees to work during the government shutdown without timely payment of wages would constitute a violation of the FLSA.
Because the government failed to demonstrate that it had good faith reasons for not paying essential employees’ wages on their regularly scheduled payday, it was liable under the FLSA for liquidated damages – that is, an amount equal to the minimum and overtime wages that the government failed to timely pay to essential employees.

If you have concerns about how you were paid during the 2018 Shutdown, please reach out to the attorneys at Kalijarvi, Chuzi, Newman and Fitch, P.C., for a consultation.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Thursday, January 18, 2018

Trump's DOL: Employees' Protections Down the Drain

The Fair Labor Standards Act (“FLSA”) establishes, among other things, overtime pay standards affecting employees in both the private and Federal sectors. Workers covered by the FLSA must receive overtime pay (their hourly rate plus an additional 50%) for each hour they work after 40 hours of work in a workweek. The Department of Labor (“DOL”), Wage and Hour Division (“WHD”) enforces the Federal overtime pay requirements of the FLSA.

Historically, interested parties could ask the WHD for official written explanations (“Opinion Letters”) of what the FLSA requires in certain fact-specific situations. In an Opinion Letter, the DOL indicates whether a particular business practice complies with the FLSA. This process, however, largely served the interests of employers: it gave them a legal defense that their practices comported with what the Opinion Letter says, even if the DOL’s guidance in the Opinion Letter was wrong. Specifically, under the Portal-to-Portal Act of 1947, employers may be able to rely on the Opinion Letters for their affirmative defenses and receive deference from the courts if they act “in good faith in conformity with” an Opinion Letter. This can be a challenge for employees’ attorneys to overcome. Additionally, although most beneficial to the employer requesting the Letter, any other employer can cite the Letter as a defense, provided its practice aligns with the material facts underlying the Letter.

DOL’s longstanding practice of issuing Opinion Letters offering interpretive guidance under the FLSA was halted by the Obama Administration in 2009. Beginning in 2010, the DOL discontinued issuing Opinion Letters in favor of “Administrative Interpretations”—broader pronouncements of the DOL’s views on wage and hour issues, unlinked to a particular fact pattern.

In June 2017, the Trump Administration began undoing some of the sub-regulatory activism of the Obama administration by withdrawing two Administrative Interpretations on independent contractors and joint employers:
  • No. 2015-01: addressed the classification of independent contractors as employees under the FLSA, stating that “most workers are employees under the FLSA’s broad definitions,” essentially creating a presumption of employment for all workers. This Interpretation underscores the importance and level of scrutiny placed on employers to confirm that they are properly classifying workers.
  • No. 2016-01: established new standards for determining joint employment under the FLSA and Migrant Seasonal Agricultural Worker Protection Act. The DOL took the position that “[t]he concept of joint employment, like employment generally, should be defined expansively under the FLSA and MSPA.”
The withdrawal of these Interpretations signaled a major shift in wage and hour policy—away from heightened scrutiny of employers with respect to their classification of workers as employees and for determining joint employment with contractors and other related organizations. Later that month, the DOL announced it would return to the practice of issuing Opinion Letters to provide guidance to employers and employees on FLSA issues. The DOL also reissued 17 previously withdrawn Opinion Letters on a wide variety of topics under the FLSA. This shift strongly indicates that the Trump Administration favors less aggressive regulation and oversight of employers: reverting back to a process that largely serves employers’ interests—at the cost of employees’ wages.

Although the DOL may recover back wages (either administratively or through court action) on behalf of employees that have been illegally underpaid in violation of the FLSA, the Trump DOL has shown that it cannot be trusted to uphold workers’ interests. Accordingly, an employee who believes his/her employer has violated the FLSA should seek guidance from an attorney practicing in this area. Attorneys at KCNF practice wage and hour law and have recovered tens of millions of dollars in unpaid work on behalf of employees. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue to http://www.kcnlaw.com/Contact.shtml.


This blog is provided to our readers for informational purposes only. It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.