Las Vegas Injury Lawyers Blog

The DC Circuit Court of Appeals has temporarily enjoined the National Labor Relations Board's (NLRB) rule which, under the National Labor Relations Act (NLRA), requires businesses to post the statement of employee rights effective April 30, 2012. Under the posting rule, the NLRB required most private sector employers to post a notice advising employees of their rights under the National Labor Relations Act. Such rights included the right to unionize, as well as negotiate with their employers about the terms and conditions of their employment.

The posting was required to be in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted. Employers were also required to publish a link to the notice on an internal or external website if other personnel policies or workplace notices were posted there. Employers who did not comply with the posting requirement could be cited for an unfair labor practice. Additionally, the six-month period unions and employees have to file unfair labor practice charges would be extended to account for non-compliance.

The DC Circuit Court of Appeals felt a postponement of the effective date of the posting rule was warranted after two recent court decisions. In South Carolina, a federal trial court ruled the whole NLRB's posting rule was invalid and that the NLRB's power to create new rules was limited to those that are "necessary" to carry out the NLRA's provisions.

In Washington, D.C., a federal appeals court held the requirement to post was valid, however, the portions of the posting rule which made the failure to post an unfair labor practice and a basis for tolling the time period to file unfair labor practice charges were not valid. This decision was the one appealed to the DC Circuit Court of Appeals.

The NLRB has reaffirmed its commitment to the posting rule but has agreed not to implement the rule pending resolution of the appeal of the D.C. court's decision and the anticipated appeal of the South Carolina court's ruling.

Continue reading "DC Circuit Court of Appeals Enjoins NLRB Posting Rule" »

The California Supreme Court has held that while an employer is required to make it possible for an employee to take scheduled breaks, it is not liable if the employee chooses to work through those breaks.

Employees at Dallas-based Brinker International, the parent company of Chili's, Maggiano's Little Italy, and other eateries, filed suit when they missed their breaks to work.

In a unanimous vote, The California Supreme Court held that California Labor laws do not order an employer to ensure employees cease all work during meal periods. Instead, an employee is at liberty to use the time as they choose.

Under the California Labor Code an employer is required to provide an uninterrupted, 30-minute, duty-free break in which an employee can come and go as he or she pleases. This break must be scheduled no later than five hours into an employee's shift. However, if an employee works more than one five hour shift, an employer is not required to provide an additional 30-minute break.

An employer must also provide an employee who works a 31/2 hour to 6 hour shift with a 10-minute rest break, and a second 10-minute break if the employee works a 6 to 10 hour shift.

The court also said that the 30- minute break must be scheduled no later than 5 hours into an employee's shift. An employer is not required to give a worker a second 30-minute break if his or her's employee works more than 10 hours.

Previously the California high court had held that employees who are denied their rest and meal breaks face greater risk of work-related accidents - especially low-wage workers who engage in manual labor. In 2001, California became one of only a few states that impose a monetary penalty for employers who violate these laws, requiring employers to pay one hour of wages for a missed half-hour meal break.

In Nevada employers must provide employees a meal break of at least 30 minutes when the employee works 8 hours. Employers must also provide employees a 10 minute break for each 4 hours worked. Nev. Rev. Stat. 608.019. There is no federal law requiring employers to provide such breaks.

Continue reading "California High Court holds Employers Do Not Have to Babysit Employees for Breaks" »

The U.S. District Court in the Northern District of California has granted a motion for two non-U.S. workers to continue a class-action lawsuit against their India-based information technology provider, Tata Consultancy Services, Ltd., and its parent firm, Tata Sons, Ltd. The Court certified two classes: one consisting of all non-U.S. citizens who were employed by Tata in the U.S. any time from Feb. 14, 2002, through June 30, 2005, and who were sent to the U.S. after Jan. 1, 2002; and a California class asserting California Labor Code violations, consisting of all non-U.S. citizens who were employed by Tata in California at any time from Feb. 14, 2002, through June 30, 2005, and who were sent to California after Jan. 1, 2002. Vedachalam v. Tata America International Corp., 06-cv-00963, U.S. District Court, Northern District of California (Oakland)

This ruling was consistent with a 2009 decision by the Ninth Circuit Court of Appeals in Northern California which denied a motion by Tata to compel arbitration of the lawsuit in India and to dismiss the nationwide class-action lawsuit.

In the case in dispute, two non-U.S. citizen employees, Gopi Vedachalam and Kangana Beri, were sent to the U.S. from India to do software projects. Before they could receive a paycheck, Vendachalam and Beri alleged that Tata forced them and other non-U.S. citizen employees to sign over their federal and state tax refunds to Tata. The two men also alleged that Tata deducted their Indiana salary from their U.S. pay depriving them of California wages. Both actions are a violation of California Labor Law.

The Immigration and Nationality Act (INA) allows U.S. employers, including in the State of Nevada, to hire foreign workers on a temporary or permanent basis to perform certain types of work. The U.S. Department of Labor's (DOL) Employment and Training Administration (ETA) generally grants certification to employers to hire foreign workers in cases where there are insufficient qualified U.S. workers available and willing to perform work at wages that meet or exceed the prevailing wage paid for that occupation in the area of intended employment.

Continue reading "U.S. Courts Have Jurisdiction to Hear a Class-Action Lawsuit brought by Non-U.S. Citizens Against a Foreign-Based Employer" »

Four Las Vegas, Nevada defendants were sentenced up to 37 months in federal prison for running a multi-million state and federal unemployment compensation scam. Francisco Garcia, the leader of the unemployment compensation scam, received 37 months, Efrain Garcia and Nabora Garcia received 24 months, and Eloy Garcia received 15 months.

Under the unemployment compensation scam, the four defendants had illegal immigrants, who were aware non-U.S. citizens were not entitled to unemployment benefits, use fake Social Security numbers to submit almost 600 fraudulent unemployment compensation claims. The claims were filed by phone or online which doesn't require proof of citizenship. The defendants then had the State of Nevada mail out the unemployment benefits to the defendants, not the illegal immigrants. Over an almost two year period, the defendants collected $4.4 million in state and federal unemployment compensation benefits.

The investigation of the unemployment benefits scam was a joint operation among several agencies - the Employment Security Division, the IRS Criminal Investigation, and the U.S. Department of Labor's Inspector General. According to the Las Vegas special agent in charge at the IRS, it was "greed and a money paper trail" that ultimately led to the defendants undoing. "With Nevada's unemployment rate a record highs, the scam not only taxed the system economically, it also "disrupted the entire unemployment benefits program," said Steve Zuelke, who runs the fraud unit for the Nevada Employment Security Division. "And considering that the defendants obtained over $4 million illegally in amounts less than $1 thousand, the extent of this fraud was staggering," said Nevada U.S. Attorney Daniel Bogden.

According to the Department of Labor, 11% or $20 billion unemployment compensation payments are improper. Since the scam was revealed, Nevada is checking all unemployment benefits claimant applications against the Social Security Administration.

All four defendants, who were found guilty of money laundering, mail fraud, and/or false representation of a Social Security number, are required to make restitution.

Continue reading "Major Sweeps Lands Four Las Vegas, Nevada Defendants in Prison for Unemployment Fraud" »

In Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, the Supreme Court of the State of Nevada held an employer is required to acquire knowledge of an employee's permanent physical impairment before a subsequent injury occurs to qualify for reimbursement from the Subsequent Injury Account for Private Carriers.

Holiday Retirement Corporation hired a couple as co-managers of a retirement residence. At the time the wife was hired, Holiday was not aware that the wife had had two back surgeries, including one to treat an on-the-job injury. While working for Holiday, the wife reinjured her back. An MRI revealed the prior back surgeries, and that the wife needed another back surgery. After surgery, Holiday put the wife on modified work duty restrictions. A year later, she and her husband quit.

The wife's permanent partial disability (PPD) evaluation showed the wife had a 35% whole person impairment, with 75% of the impairment due to the Holiday injury. She was awarded compensation. Holiday's insurer sought reimbursement under NRS 616B.587, arguing that the wife's compensation was based on her combined injuries and would be less if she just received compensation for only her Holiday injury.

The State of Nevada Division of Industrial Relations (DIR) denied the insurer's request for reimbursement. Under NRS 616B.587(4), an insurer is not entitled to reimbursement if the insurer " had knowledge of the 'permanent physical impairment' at the time the employee was hired or if the employee was hired after the employer acquired such knowledge." Because Holiday did not have knowledge of the wife's prior permanent physical impairment until after she was injured working for Holiday, no reimbursement was allowed.

Holiday appealed to the DIR and then the District Court, both of which affirmed the original DIR determination. Holiday appealed to the Supreme Court of Nevada.

"The language in NRS 616B.587(4) is plain and unambiguous. The "critical difference" between an employer who retains a permanently physically impaired worker before a subsequent injury occurs and one who retains a permanently physically impaired worker after the subsequent injury has already occurred. In the former situation the potential for liability remains contingent; in the latter, the potential for liability is certain. Permitting reimbursement in the latter situation is akin to "providing employers an option to buy casualty insurance to cover a casualty that has already occurred."

District Court affirmed. Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, No. 54968, Sup. Ct. Nev., (April 05, 2012)

Continue reading "A Nevada Employer Must Have Knowledge of an Employee's Previous Injury to Receive Reimbursement " »

When most people think of a Las Vegas or Nevada business, their first thought is "The Strip." The glitz, the glamour, the celebrities, and the showgirls. Behind all these lights, however, are hotels, nightclubs, and entertainment arenas. Around all these lights are hundreds of other businesses found in every town and every city across the country.

Many Las Vegas and Nevada businesses employ unpaid interns and volunteers. However, are these unpaid interns and volunteers, actually employees covered by the Fair Labor Standards Act (FLSA)? Three recent New York lawsuits by unpaid interns against high-profile employers have brought this issue back into the national public eye.

As guidance for employers, the United States Department of Labor has established a 6-factor Fact Sheet to assist in determining whether an individual is a paid or unpaid intern.

1. The internship is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer derives no immediate advantage from the activities of the intern;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

All or any of these factors do not have to present. However, the more factors that are, the more likely the worker can be treated as an unpaid since the worker, and not the employer, is the primary beneficiary of the arrangements.

Continue reading "Is Your Unpaid Intern Really an Employee?" »

It's everywhere ... Facebook, Twitter, MySpace, LinkedIn. Used by everyone ... individuals, businesses, organizations, even our governments. With hundreds of millions posts discussing a range of topics. Our lives are transparent, and employers, including those in Las Vegas and Nevada, want access to their employee's social media transparency.

In 2009, Sears Holdings implemented a social media policy prohibiting employees from using any social media medium to disparage the "company's or competitors' products, services, executive leadership, employees, strategy, and business prospects." Representing Sears' technicians, the International Brotherhood of Electrical Workers (IBEW) filed a charge asserting that the new Sears' social media policy violated Section 7. Under Section 7, union and nonunion employees have the right to engage in protected "concerted activities," which include activities where the employee acts with the authority of other employees, seeks to initiate, induce or prepare for group action, or brings group complaints to the employer's attention. The National Labor Relations Board (NLRB) ruled that Sears' social media policy did not violate Section 7 since it only prohibited "online sharing of confidential intellectual property or egregiously inappropriate language and not Section 7 protected complaints about [Sears] or working conditions." Sears Holdings (Roebucks), Case 18-CA-19081 (December 4, 2009)

In 2010, the NLRB appeared to do an about face. It brought a complaint against American Medical Response of Connecticut, Inc. (AMR) for terminating an employee who used her Facebook page to criticize her supervisor. After discussions with the NLRB, the AMR agreed to narrow the scope of its social media policy. American Medical Response of Connecticut, Inc., Case No. 34-CA-12576 (October 27, 2010)

Finally, in 2011, the National Labor Relations Board (NLRB) issued three advice memorandas that seemingly clarify the issue of employer/employee relationship and the world of social media. Employees who post personal or professional messages on social media sites cannot be disciplined or terminated if ...

1. ... the posts are a "concerted activity." Wal-Mart, 17-CA-25030 (July 19, 2011) and JT's Porch Saloon, Case No. 13-CA-46689 (July 7, 2011)
2. ... their acts relate to the terms and conditions of their employment. Hispanics United of Buffalo, 3-CA-27872 (September 2, 2011).

The NLRB also ruled that employer's who implement social media policies cannot make them overbroad or impermissibly vague such that it chills the employees exercise of their rights. While Nevada has not drafted any employment laws directed at social media activities, other states are. In New Jersey, the legislature is drafting a law to outlaw employers from asking employees or potential employees for their social media passwords.

Continue reading "Social Networks Create Employment Discrimination Liability" »

In April 2009, Gareth Pitts filed a class action complaint against his employer, Terrible Herbst, Inc., for failing to pay Pitts and other employees' overtime and minimum wages. Pitts alleged that Terrible Herbst had violated the Fair Labor Standards Act (FLSA) and Nevada Labor Laws, and committed a breach of contract.

Before Pitts filed a motion for class certification, Terrible Herbst made a Rule 68 offer of judgment for $900, even though Pitts only claimed $88 in damages. Pitts then sought to abandon his FLSA claims and pursue only his Rule 23 class action available under the Federal Rules of Civil Procedure. Before Pitts could amend his claim but after Pitts rejected the offer of judgment, Terrible Herbst filed a motion to dismiss claiming its offer of judgment rendered the entire case moot. Though the court disagreed that an offer of judgment rendered the entire case moot, Pitts' case was dismissed with prejudice because Pitts failed to timely file the class certification for just a Rule 23 class action. Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1085 (9th Cir. 2011)

On Pitts' appeal, the Ninth Circuit reversed, holding that an unaccepted offer of judgment does not moot a case because allowing a defendant to "buy off" a class action by making an offer of judgment to satisfy a plaintiff's claim would make a matter transitory such that it would evade review. The Ninth Court further held that by giving a written response to a motion to dismiss, Pitts communicated to the district court, his desire to abandon his FLSA claims. Amendment of his complaint was not necessary. Further, Pitts' dismissal of his federal claims does not divest the district court of its power to exercise supplemental jurisdiction unless the claims were devoid of merit or frivolous, which is not the case here. If the district court were to certify a class, certification would relate back to the filing of the complaint.

The Ninth Circuit remanded Pitts' state law claims back to state court, and denied Terrible Herbst's motion to dismiss the breach of contract claim. Pitts v Terrible Herbst, Inc., No. 2:09-CV-940-RCJ-RJJ (D. Nevada, December 7, 2011)

Continue reading "A Rejected Offer of Judgment Does Not Prevent a Class Action for Unpaid Overtime" »

The Ninth Circuit holds that social workers, employed by the State of Washington, are not "learned professionals" as their position does not require a degree in a specific discipline. Social workers are thus covered by the Fair Labor Standards Act (FLSA) and entitled to overtime compensation for all hours worked in excess of 40 hours in a week.

The DSHS is a public agency created by the Washington legislature to "integrate and coordinate all those activities involving provision of care for individuals who, as a result of their economic, social or health condition, require financial assistance, institutional care, rehabilitation or other social and health services." Wash. Rev. Code § 43.20A.10. Under DSHS policy, individuals hired into social worker 2 and social worker 3 positions have to have attained rigorous educational qualifications, which include having a bachelor's degree or higher in one or more degree areas - social services, human services, behavioral serviced, or an allied field - from an accredited institution. That because of these educational qualifications, as well as formal training required by DSHS, individuals hired into these two positions qualified as "learned professionals" exempt from FLSA overtime protection.

In 2005, the DOL issued an opinion letter stating that social worker positions that required "a master's degree in social work, drug and alcohol, education, counseling, psychology, or criminal justice," were "learned professionals" exempt from FLSA protection, while social caseworker positions that required only "a bachelor's degree in social sciences" were not. In 2006, the Department of Labor (DOL) received a complaint from a DSHS employee. After an investigation, the DOL investigator concluded that the social worker 2 and social worker 3 positions were not "learned professionals" exempt from FLSA overtime protection and thus workers in these positions were entitled to overtime pay.

On a DSHS appeal, the district court disagreed with the DOL investigator's conclusion, and held the social worker 2 and social worker 3 positions were "learned professionals" exempt from FLSA overtime protection. The district court stated that the DSHS's requirements were "plainly more exacting than a bachelor's degree in 'any field' as stated in 29 [C.F.R] § 541.301(d), and more exacting than the caseworker's requirements outlined in the Department of Labor's 2005 opinion letter." The district court also concluded that DSHS's requirement that social workers have at least 18 months of experience in social work and that they be required to complete additional formal training weighed in favor of a finding of specialized training. Summary judgment was entered for DSHS. The DOL appealed.

The FLSA includes an exemption from the overtime requirement for "any employee employed in a bona fide executive, administrative, or professional capacity . . . ." 29 U.S.C. § 213(a)(1). To qualify as a "Learned Professional" an employee's primary duty must be the performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. This primary duty test includes three elements:

1. The employee must perform work requiring advanced knowledge;
2. The advanced knowledge must be in a field of science or learning; and
3. The advanced knowledge must be customarily acquired by a prolonged course of specialization where specialized academic training is a standard prerequisite for entrance into the profession.

"An employer who claims an exemption from the FLSA bears the burden of demonstrating that such an exemption applies." Klem, 208 F.3d at 1089. "The criteria provided by regulations are absolute and the employer must prove that any particular employee meets every requirement before the employee will be deprived of the protection of the Act." Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1125 (9th Cir. 2002) (quoting Mitchell v. Williams, 420 F.2d 67, 69 (8th Cir. 1969)

The Ninth Circuit noted that in the 2005 opinion letter, the DOL stated that social worker positions that required "a master's degree in social work, drug and alcohol, education, counseling, psychology, or criminal justice," were "learned professionals" exempt from FLSA protection, while social caseworker positions that required only "a bachelor's degree in social sciences" were not. That while the DSHS's requirement that the social worker 2 and social worker 3 positions required more than a degree "in any field," it did not require a "prolonged course of specialized intellectual study." DSHS's educational requirement may be satisfied by degrees in diverse fields. DSHS also admitted it does not examine an applicant's coursework once it determines that the applicant's degree is within one of those fields. Furthermore, that the DSHS required both positions to participate in a formal training program is not relevant as the regulation states clearly that the FLSA exemption does not apply to "occupations in which most employees have acquired their skill by experience." 29 C.F.R.§ 541.301(d).

Continue reading "Social Workers Are Not Exempt as "Learned Professionals" Under FLSA" »

Clincy et al. v. Galardi South Enterprises Inc., No. 1:09-CV-02082-RWS (N.D. Georgia, September 7, 2011)

One of the questions before the court is whether exotic dancers are independent contractors or employees, entitled to minimum wages and overtime under the Fair Labor Standards Act (FLSA).

Each of the Plaintiffs performed as a dancer/entertainer (DE) at Club Onyx. Galardi South Enterprises Inc. is owned by Jack Galardi, who also owns Pony Tail, Inc. and Galardi South Enterprises Consulting, Inc. Pony Tail leases the premises where Onyx is located and admits to owning and controlling Onyx.

Onyx employs a management team that handles the club's day-to-day operations. House moms assist the entertainers. Part of the house mom duties include directly managing a DE, including her appearance, signing her in for her shifts, and explaining how a DE is required to pay the disc jockey and a bar fee.

When hired, a DE at Onyx is given a "Dancer Packet" which contains forms to review, complete and return to management. The packet includes 1) Onyx's Club Rules and Conduct for Contractors and Employees; 2) conduct rules for the VIP Rooms; 3) a Dancer Information Sheet; 4) a Random Drug Test Consent Form; 5) an Independent Contractor Agreement; 6) a document entitled "Wage Acknowledgment Regarding `Tip Credit'" and 7) Rules Recognition and Consent.

A DE is responsible for obtaining an individual adult entertainment license specific to Onyx from the City of Atlanta, where the club is located, and paying the annual cost to maintain an adult entertainment license. A DE is also asked to attend separate meetings to discuss Onyx's rules and policies, changes in City law, promotional events and Onyx's decoration and furnishings. Though there is no concrete rule as to the minimum number of nights a DE must work each week, if a DE does not work four nights a week, she is fined or disciplined. A DE must also call her House moms if she cannot perform on a work day.

The FLSA defines an "employee" as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). The economic realities of the relationship between the worker and the boss determines whether a worker is an independent contractor or an employee.

The court reviewed six factors to determine the economic reality relationship between the plaintiffs and defendants.

1. The nature and degree of the alleged employer's control as to the manner in which the work is to be performed. The court finds Onyx exerts control over nearly every aspect of a DE's work from hire to termination.

2. The alleged employee's opportunity for profit or loss depending upon his managerial skill. The court finds Onyx is primarily responsible for drawing customers into the club, which determines a DE's earnings and Onyx's revenue.

3. The alleged employee's investment in equipment or materials required for his task, or his employment of workers. The court finds a DE's investment in exotic dancing is small in comparison to Onyx's investment.

4. Whether the service rendered requires a special skill, which is indicative of an independent contractor. The court finds that special skills are not required to perform as a DE at Onyx.

5. The degree of permanency and duration of the working relationship. The court finds most of the plaintiffs have worked less than a year for Onyx. This is not indicative of an employer-employee relationship.

6. The extent to which the service rendered is an integral part of the alleged employer's business. The court finds the presence of a DE was integral to Onyx and weighs in favor of finding an employer-employee relationship.

The court concludes that the economic reality relationship between the plaintiffs and defendants is such that plaintiffs are employees of Onyx and entitled to minimum wages and overtime as decreed by the FLSA. The court grants plaintiffs' motion for partial summary judgment and deny defendants' cross motion for summary judgment.

This decision is significant as the majority of strip clubs in the country, including Las Vegas, disregard court decisions that hold most strippers, employed under circumstances similar to those in the case, are actually employees.

Continue reading "Exotic Dancers Are Employees Entitled to Minimum Wages and Overtime" »

Kimberley Daprizio was a dealer at Harrah's Las Vegas, which is owned by Harrah's Entertainment, Inc. Harrah's required Daprizio and other dealers to attend a short meeting before each shift. Daprizio and other dealers were not compensated for the time spent in these mandatory meetings.

Daprizio sued Harrah's Las Vegas and their parent company for violating the Fair Labor Standards Act (FLSA) and Nevada Revised Statutes (NRS), and invoked the Class Action Fairness Act (CAFA) to extend the lawsuit to any other Harrah employees who were not compensated during the previous three years. Harrah's argued that Daprizio's complaint was legally insufficient and requested the District Court to dismiss the lawsuit. Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983).

First, the District Court determined jurisdictional law. Section 216(b) of the FLSA grants jurisdiction to "any Federal or State court of competent jurisdiction." 29 U.S.C. § 216(b). The primary difference between the FLSA and Nevada state labor class action laws is the process parties use to become members of a class action suit. Under the FLSA, "No employee shall be a party plaintiff to any such action unless he gives consent in writing to become such a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b). In other words, a party to the action must opt in to an FLSA collective action. Fed.R.Civ.P. 23(c)(2)(B)(v) governs other class action suits, such as Nevada state labor class action suits, and requires that any member who does not want to be part of a class action suit must opt-out.

The District Court found that because of the divergence in the opt-in and opt-out procedures the FLSA precludes state law labor class actions. The District Court also noted that if Rule 23 was applied, the 1100 California employees who did not affirmatively opt-in to the lawsuit would have been made part of the case. Finally, the District Court found that while the FLSA preempted a state class action, Daprizio still had an individual claim under Nevada state law.

Next the District Court reviewed whether the amount of time required to attend the mandatory meetings was "de minimis." In Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692 (1946), the United States Supreme Court held, "it is only when an employee is required to give up a substantial measure of his time and effort that compensable working time (which is covered by the FLSA) is involved" In Lindow v. United States, 738 F.2d 1057, 1062 (9th Cir. 1984) three requirements were identified to determine whether time was de minimis: (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work. The District Court found the time required to attend the mandatory meetings was not de minimis.

The District Court held that Harrah's motion to dismiss the class action suit under state law was granted, but denied in regard to Daprizio's individual FLSA claim.

Continue reading "District Court Holds Class Action under Nevada State Law is Precluded by FLSA" »

Tips are a mainstay in the service industry. According to the Nevada Department of Employment, Training and Rehabilitation, the service industry employs more individuals than any other employment category. And GOP Presidential candidate, Ron Paul, wants their vote. Paul has introduced the "Tax Free Tips Act" to exempt tips from federal and payroll taxes. A bigger question is whether any state now taxing tips, like Nevada, would follow suit.

Under the Internal Revenue Code, gross income includes "all income from whatever source derived, including ... compensation for services, including fees, commissions, fringe benefits, and similar items." Internal Revenue Code §61(a)(1). Under IRC Sections 101-140, gross income does not include such items as certain gifts, Supplemental Security income, certain health care plan contributions, death benefits, and other sources of income. Tips paid to a service industry employee are not an excludable income source; therefore they are deemed taxable gross income and subject to withholding tax.

Currently, under the Fair Labor Standards Act (FLSA) service industry employers in Las Vegas are required to deduct any applicable taxes for any service industry employee who receives $30 in tips per month. In the reverse, Las Vegas' service industry employees who receive tips are required to maintain documentation to verify how much they have earned in monthly tips, and then submit this information to their employers by the 10th of the following month. When employees do not maintain sufficient documentation to calculate their tip income, the IRS will generally assume a service industry employee's earned tip income at 8 percent of the server's food and beverage sales.

Under current FLSA and Nevada statutes, employers with tipped workers (such as wait staff, bartenders, and valets) may deduct up to $6.12 an hour as a tip credit from the minimum hourly wage paid to an employee. To qualify for the credit, an employee must earn more than $30 a month in tips. And if the total amount of an employee's hourly tips and cash wages does not equal the minimum hourly wage, a Nevada employer must compensate the employee for the difference.

For instance if during the first hour of work an employee receives $3.00 in tips and their minimum wage is $8.25, their employer must pay the employee an additional cash wage of $3.12 ($8.25 - $3.00 - $2.13). If the employee's minimum wage is $7.25, their employer must pay the employee an additional cash wage of $2.12 ($7.25 - $3.00 - $2.13). If the same employee earns $15.00 in tips during their second hour of work, their employer need only pay the employee the minimum wage of $2.13.

Continue reading "GOP Candidate Ron Paul - Tips Are Not Taxable!" »

When the sun goes down on February 17, 2012, Hooters wings will hopefully begin to sizzle under a more financially sound and responsible management when the Las Vegas Hooters Hotel goes on the auction block. Filing for bankruptcy protection last August, Hooters' hotel owners claimed the 5-year-old $80 million property was $181 million in debt due to overbearing mortgage payments in a sluggish economy. The hotel owners and their largest creditor, Canpartners Realty Holding Co. IV who owns $178 million of the property's debt, have agreed on a settlement to sell the 696-room Las Vegas property at auction. But for the many employees at the Las Vegas Hooters and other Las Vegas hotels, a hotel bankruptcy always brings up to them the question ... "Will I get paid?" If a Las Vegas hotel owes its employees unpaid wages, will these unpaid wages be discharged or settled in a bankruptcy filing?

Under the Federal Labor Standards Act (FLSA), employers, including Las Vegas employers, are required to pay their employees all wages earned and are liable for any unpaid wages. Further, Section 507 of the Bankruptcy Code states that persons owed "wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual have an allowed unsecured claim but only for wages, salaries, or commissions earned within the earlier of 180 days before the bankruptcy filing or the cessation of the debtor's business, and only to the extent of $ 10,950 for each individual or corporation." But if the Las Vegas employer has absolutely no assets or funds to pay unpaid wages, are their Las Vegas employees left hanging?

Maybe not! Under Boucher v Shaw, 572 F. 3d 1087 - Court of Appeals, 9th Circuit, 2009, the court gave "further protection" to Las Vegas employees owed unpaid wages.

In Boucher the Castaways Hotel Casino and Bowling Center filed a Chapter 11 bankruptcy. Part of the debt owed by the Hotel Casino at the time of filing was unpaid wages to several employees. With no assets or funds to satisfy their unpaid wages, several Castaways employees filed a class action lawsuit against three of the Castaways executives - the Chief Executive Officer, the Labor Relations Manager, and the Chief Financial Officer.

The federal district court in Nevada ruled that neither Nevada state law nor the FLSA made a company's executives liable for unpaid wages and dismissed the case. The 9th Circuit Court of Appeals disagreed holding that the FLSA definition of an "employer" should be "given an expansive interpretation in order to effectuate the FLSA's broad remedial purposes." If executives exercised economic (the CEO and Manager owned 70% and 30% of the Castaways' stock, respectively.) or key control over the employment relation an executive could be liable for unpaid wages owed to a Las Vegas employee and not satisfied in a bankruptcy settlement.

The commentary is for educational and commentary purposes only. If you or someone you know are owed unpaid wages, salaries, or commission, and would like to be represented by a Nevada attorney, contact our office for a free confidential case review and receive a response within hours. Call Toll Free 866-414-0400.

24/7, 365 days a year, is a big reason Las Vegas is one of the most popular tourist destinations in the world. At any hour of the day, Las Vegas visitors can gamble, see a show, be entertained, or just grab a bite to eat. And to ensure these activities operate smoothly, Las Vegas employs one of the largest entertainment work forces, which as seen in several recent lawsuits, can be an overtime challenge for many Las Vegas employers. In Kwame Luangisa vs. Interface Operations LLC et al, and Olsen v. Wynn Las Vegas LLC, the plaintiffs allege they were denied overtime wages and that such denial is a violation of the Fair Labor Standards Act (FLSA) and Nevada's Revenue Statue NRS 608.018.

Under the FLSA an employee is someone who is "engaged in interstate commerce or in the production of goods for commerce, or who is employed by an enterprise engaged in commerce or in the production of goods for commerce", unless the employer can claim an exemption from coverage." An employer is defined as "any person acting directly or indirectly in the interest of an employer in relation to the employee." Though the FLSA exempts executive, administrative, or professional employees, as well as drivers from the definition of employee, whether a worker falls into these categories, or any other exempt employee category, or a business is an employer, is often a disputed question in labor lawsuits.

For example, In the Luangisa case, Kwame Luangisa worked as the personal driver for Sheldon Adelson, the CEO of the Venetia Resort Hotel Casino, Palazzo Las Vegas, and Sands Convention Center in Las Vegas. From 2007, when he was hired, until 2011, Luangisa alleges he was responsible for driving Mr. Adelson, primarily in Las Vegas and Malibu, CA, for 12 to 18 hours a day, seven days a week. Luangisa claims he is entitled to but never received overtime pay. Adelson and Interface Operations LLC, which owns the Vegas properties, allege as a salaried employee, Luangisa is not entitled to overtime.

In the Olsen case, Richard Olsen worked as an investigator and executive protection agent for Wynn Resorts Ltd. Though he worked many hours in excess of the standard eight, Olsen was not compensated for any overtime wages. Like Interface Operations, Wynn Resorts claims as a salaried employee, Olsen is not entitled to any overtime pay.

Under the FLSA, an employer is generally responsible for overtime pay of "1.5 times an employee's regular wage rate ... whenever an employee works more than 40 hours in any scheduled week of work or more than 8 hours in any workday." Employees who are paid a flat salary as opposed to an hourly wage are covered by the FLSA rules and requirements, and their overtime wage is calculated by dividing their compensation by the number of hours required to work for that compensation. The FLSA does not require that the number of hours required to work be 40. It can be less or more.

Continue reading "Overtime - A Big Problem for Las Vegas Employers, Employees, & Agents" »

In this day of economic recession, businesses look for any way to increase their bottom line. With the rising cost of employee benefits and the sometimes onerous burden of employment taxes, businesses try to save money by "replacing" their employees with independent contractors and volunteers. Too often this "replacement" is facilitated by just changing the labor category of the worker from employee to independent contractor, even though the identity of the worker stays the same.

While this recategorization can save money for the business, it does the opposite for state and federal governments who utilize employment tax revenue to provide services for the general population. As such, many governments are cracking down on businesses who attempt to circumvent employment taxes by recategorizing employees as independent contractors or volunteers.

Under the Fair Labor Standards Act (FLSA) an employee is someone who is "engaged in interstate commerce or in the production of goods for commerce, or who is employed by an enterprise engaged in commerce or in the production of goods for commerce", unless the employer can claim an exemption from coverage." And there is considerable case law pointing out that categorizing a worker as an independent contractor, or a volunteer, does not make them so.

In determining what employment category a worker falls into, the court will review the total "economic reality" relationship between the worker and his/her employer. Though generally whether one is an employee or independent contractor/volunteer comes down to a determination of who is in control - the worker or employer - the court's review will also focus on two other areas - the relationship and the financial circumstances.

Control (Behavior): Independent contractors (IC) exert control over their work. Though the business identifies what work is to be completed, an IC determines who will complete the work and is responsible for hiring these workers, how it will be completed including what tools, equipment, and supplies are used, where it will be completed, and when it will be completed to meet the deadline given by the business. If any special skills or training is required to complete the work, an IC is administratively and financially responsible for ensuring anyone working on the project meets this need. A court is more likely to find a worker is an employee and not an IC when the amount of detailed instruction given to complete the above is given to the worker.

Financial Circumstances: The IRS outlines five financial areas which go into determining whether a worker is an IC or employee - whether the worker has made a significant investment in the tools, equipment, and supplies needed to complete the project, whether the worker is reimbursed for their expenses, whether the worker can incur a profit or loss, whether the worker operates a business, pays taxes, and offers their services to the public, and how the worker is paid. Workers who engage in these five areas are often deemed IC.

The Relationship: In the relationship between a business and an IC, one generally finds a written contract spelling out the terms of the work required and when it is due. That the work to be performed is not a key aspect of the business and employee benefits is not provided.

No area or factor is considered more important than another. All are reviewed and each case is taken on a case-by-case basis.

Continue reading "FLSA - Employee versus Independent Contractor" »