In an effort to avoid paying overtime wages and to save money, some employers misclassify their employees as subcontractors. Because the federal government does not mandate a minimum hourly rate for contracted workers, these same employers may also compensate workers on a piece-rate (or flat rate) basis for assigned projects, regardless of the amount of time the worker has spent completing each task. Combined, these violations save companies a substantial amount of money. As a result, many American workers are denied the hard-earned wages and overtime compensation they deserve.
Cable Technicians Speak Up
In 2011, a group of technicians at Integral Development Solutions, LLC contacted Kennedy Hodges requesting legal counsel. With our assistance, the group filed a collective-action lawsuit against Integral Development Solutions, LLC alleging unpaid overtime and minimum wages. Integral Development Solutions, LLC manages the installation of cable networks, telephone outlets, and home telephone services on behalf of Time Warner Cable in the Plano, Texas area. Employees of the company who were assigned to tasks on behalf of Time Warner Cable were required to wear Time Warner Cable uniforms and branded badges while performing their work. Because these individuals were dispatched directly by Time Warner Cable and were required to wear Time Warner Cable uniforms, they should have been classified as employees rather than subcontractors.
Fair Labor Standards Act and Employee Misclassification
Under the United State Department of Labor’s Fair Labor Standards Act (FLSA), non-exempt employees must be paid no less than the federal minimum wage of $7.25 per hour, in addition to time plus one-half the regular rate of pay for hours worked in excess of 40 hours per week. While working for Time Warner Cable, these technicians were often not compensated in accordance with this FLSA-required overtime rate. In addition, hours spent on each project (for which workers were paid a flat rate) often averaged an hourly rate below the federal minimum wage rate. The cable provider also failed to adequately track and record the number of hours worked by its employees each work week, hindering the company’s ability to compensate them accordingly.
Following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found that a number of employees were misclassified and had been compensated at rates that violated FLSA, Integral Solutions, LLC agreed to pay more than $270,000 in back wages and attorney fees. It was decided that 114 cable installers were entitled to compensation as a result of this misclassification and pay violation.
Defending America’s Workforce
The misclassification of workers not only prevents hard-working individuals from receiving the compensation they are entitled to, it also places employers who correctly classify their employees at a competitive disadvantage, costing them customers and revenue. In some cases, employees who suspect or acknowledge that they have not received their full wages are afraid to speak up out of fear of being fired. Fortunately, there are legal protections in place that subject companies to criminal and civil penalties for taking action against an individual in a fair wage dispute.
In an effort to ensure that the federal standards for employee compensation are met, employees who have been denied wages must speak up to hold companies accountable. When the threat of retaliation is likely, employers are more inclined to abide by these federal regulations that have been put in place to protect everyday workers.
If you believe that you may have been unfairly denied wages or overtime pay from an employer, our experienced legal counsel can help. For more information about your employer’s compensation obligations, visit our frequently asked questions page, or read our blog to learn more about the legal process behind these disputes. Contact us for a free, confidential consultation to learn more about your rights, our services, and legal next steps.
The misclassification of employees is a serious matter that should never be taken lightly. To stop unpaid overtime and wage instances from occurring, take action today.