News & Insights

B.A.D. Manufacturing classified some of their drivers as employees and others as independent contractors, prompting drivers from two states to file a class-action suit to recover overtime pay they were owed.

To determine whether an employer–employee relationship exists, the courts consider various factors including:

• Permanency of the relationship
• Investment in facilities and equipment by the alleged contractor
• Independence of business operations

A group of customer service employees alleged that B.A.D. Manufacturing routinely failed to account for all their hours worked, resulting in lost wages and miscalculated overtime.

Specific violations included:

• Taking work calls at home
• Working through lunch breaks
• Reporting early for meetings with supervisors

A group of sales employees filed a class-action lawsuit alleging that their performance bonuses and commissions weren’t calculated into their overtime pay.

The bonuses had been misclassified as discretionary bonuses, which are awarded at the discretion of the employer and are not factored into an employee’s regular rate of pay.

The commissions should have been nondiscretionary because they were awarded for performance based on pre-established criteria. By law, nondiscretionary bonuses must be factored into employees’ regular rate of pay.

B.A.D. management instructed warehouse employees to clock in for their shifts on the warehouse floor, where they are required to wear safety gear and personal protective equipment.

A group of warehouse employees sued to receive compensation for the time spent putting on and removing their equipment each day as well as walking to and from the warehouse floor.

The Supreme Court ruled in IBP, Inc. v. Alvarez that if equipment is “always essential if the worker is to do his job,” then donning said equipment counts as a “principal activity” under the FLSA and is considered part of the compensable workday.

Security guards at B.A.D.’s California facility found that the company’s payroll automatically deducted 30 minutes from each shift for meal breaks, even though they were expected to eat at their desks and were regularly interrupted.

Some of the guards filed a Private Attorneys General Act (PAGA) claim to recover their lost wages.

• PAGA is a California statute that enables workers to file lawsuits against employers for labor law violations.
• PAGA claims can be costly but are typically not excessive.
• PAGA claims are more common than class actions because they’re easier for employees to file.