Articles Posted in Workers’ Compensation

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Owen H. Laird, Esq.

Identifying which public-sector employees are entitled to overtime pay is a complex endeavor, fraught with regulations, collective bargaining agreements, and bureaucracy, as well as the numerous requirements and exemptions of the Civil Service Law, New York Labor Law, and the Fair Labor Standards Act. A recent case, Matter of Roberts v. Cuomo, addressed these issues in the context of New York’s response to, and recovery from, Hurricane Sandy.

In Roberts, the New York Appellate Division, Third Department reversed a decision regarding whether “exempt” public sector employees can receive compensation for overtime worked during Hurricane Sandy. “Exempt” workers – those who generally are not entitled to overtime pay – may receive overtime compensation under certain circumstances under New York Civil Service Law § 134[6], including work done in relation to an “extreme emergency.”

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One of the most common wage related allegation made by employees is that they performed work-related activities but were not paid for that time. This is referred to as off-the clock work claims. This a very difficult area since overtime sometimes needs to be authorized by the employer. It is not rare to find company policies stating that overtime needs to be pre-approved. However, policies of this kind may constitute a violation of the Fair Labor Standards Act (FLSA) and it is not enough for a company to have set up a policy warning employees that their non pre-approved overtime work may not be compensated, to be off the hook. However, the FLSA does not go as far as to forbide employers from having or implementing such policies. The FLSA does not authorize employers to withhold payment of employees who worked unapproved overtime because it would constitute an hour and wage violation.

Under the FLSA employers have an obligation to pay its employees for all the hours worked. As a consequence the employer must be careful as to what type of work he authorized because this will put him under a legal duty to compensate his employees for the work done. According to Section 785.11 of the (FLSA) regulations, “Work not requested but suffered or permitted is work time. For example, an employee may voluntarily continue to work at the end of the shift. He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, and prepare time reports or other records. The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time.”

As a consequence it is the employer’s responsibility to enforce his policies against unapproved overtime by communicating clearly about his policy (through managers or supervisors for instance) as stated in Section 785.13 of the FLSA states, “In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.”

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The Court of Appeals for the Eighth Circuit recently held that undocumented immigrants are able to sue employers under the Fair Labor Standards Act (“FLSA”) for payment of minimum wage or overtime. In Lucas v. Jerusalem Café, the appellate judge stated that the Secretary of Labor and numerous district courts agree that employers must comply with federal employment laws even where they hire unauthorized workers.

In Lucas, five of the six workers involved in the lawsuit alleged that the employer knew of their lack of employment permits and paid employees in cash on a weekly basis. The Court rejected the employer’s argument that the plaintiffs’ status as undocumented workers prevented them from seeking relief for uncompensated work.

Responding to criticism against the Lucas decision, the Department of Labor argued that protecting labor rights laws of unauthorized workers did not frustrate federal immigration policy because imposing such liability for labor law violations would dissuade employers from hiring illegal immigrants for lower than the minimum wage. The court reasoned that employers should be encouraged to comply with federal regulations requiring Form I-9 employment verification because they are now warned that exploiting illegal immigrants exposes them to liability for breaking U.S. immigration and labor laws.

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On July 10, 2013 the Second Circuit decided Palma v. National Labor Relations Board, in which undocumented aliens petitioned for review of an order of the National Labor Relations Board denying them backpay. The petitions had been unlawfully discharged by their employer in violation of the National Labor Relations Act (“NLRA”).

The court held that undocumented aliens were not entitled to backpay, and the decision touched upon the interplay between the NLRA and the Immigration Reform and Control Act of 1986 (“IRCA”), the former granting backpay to workers and the latter prohibiting undocumented persons from working.

The Second Circuit relied heavily on the Supreme Court decision Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002). The Court had ruled that the IRCA foreclosed relief for an undocumented alien to win back-pay under the NLRA. The Court said,

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Employers have used workers’ compensation statutes to narrow the claims that an employee can bring to a court by asserting as a defense that the claim must proceed through the state’s workers’ compensation law. The common law torts of negligent hiring and negligent retention are permitted where an employee’s tortious conduct does not result in liability under the theory of respondeat superior. Today, jurisdictions across the United States differ whether negligent hiring and negligent retention claims fall under their workers’ compensation laws.

Generally, workers’ compensation statutes require employers to have workers’ compensation insurance, which pays for employees’ injury expenses in exchange for a waiver their claims. In the United States, each state has passed its own unique set of laws the generally preempt the litigation of injuries to employees that arise from their employment. Workers’ compensation benefits both employers and employees: employees receive compensation quickly and employers are protected against work-related injury lawsuits. Workers’ compensation statutes were first legislated to compensate workers who were physically injured by dangerous working conditions but have expanded to include non-physical injuries and other work related negligence claims as well. A claim for negligent hiring is based on the principle that an employer is liable for the harm resulting from its employee negligently hiring improper persons for a position. Claims for negligent retention on are based upon the principle that an employer is liable for the harm resulting from an employee when the employer knew or should have known the hire was predisposed to committing a wrong against a third party. State judges determine whether this is the type of negligent conduct its legislators intended workers’ compensation laws to subsume.

The result is a crazy quilt of states permitting or prohibiting their courts original jurisdiction for claims of negligent hiring and retention. For example, New York, New Jersey, and Pennsylvania allow their courts original jurisdiction over these claims while Maryland, Connecticut and Florida do not. In New York both the state and federal courts have held that negligent hiring and retention are preempted by New York’s workers’ compensation law. Ferris v. Delta Air Lines, Inc., 277 F.3d 128 (2d Cir. 2001); Conde v. Yeshiva Univ., 16 A.D.3d 185 (N.Y. App. Div. 2005). However, in Maryland, the Court of Special Appeals found “no reason to abandon those general tort principles in favor of preemption under the [Maryland worker’s compensation law.” Gasper v. Ruffin Hotel Corp. of Maryland, Inc., 183 Md. App. 211, 233 (2008) aff’d, 418 Md. 594 (2011). This inevitably affects the rights of workers across the country and increases unpredictability in the courts.