Phoenix, Arizona Overtime Law
The Law Offices of Kevin J. Dolley represents workers nationwide in claims for unpaid overtime compensation under the Fair Labor Standards Act (FLSA).
Introduction
In Baker v. D.A.R.A. II, Inc., 06-2887-PHX-LOA, 2008 WL 191995 (D. AZ Jan. 22, 2008), the United States District Court for the District of Arizona, located in Phoenix, Arizona, examined a case involving the alleged failure of an Arizona corporation and its owners (Defendants) to pay overtime wages to an employee (Plaintiff) as required under the FLSA. Defendant DARA II was an Arizona corporation that operated a network of group homes for disadvantaged children. Plaintiff worked for DARA, Inc. (DARA II's predecessor) and DARA II for a combined total of over 15 years. Plaintiff's employment duties included cooking, cleaning, doing laundry, preparing children for school and bed, administering medication, and engaging in general child care. The parties agreed that Plaintiff's position was not exempt from the overtime requirements of the FLSA.
Background and the Three Main Issues
Both Plaintiff and Defendants filed competing Motions for Summary Judgment. Plaintiff sought Summary Judgment on only the portion of Count I of her Complaint which sought unpaid overtime wages for the period from Nov. 30, 2003 to August 25, 2005. Defendants countered that Plaintiff was paid for all of the overtime she worked and disputed that they owed Plaintiff unpaid overtime. There were three main issues in front of the court in this case: 1) whether the Plaintiff was entitled to claim the three year statute of limitations under the FLSA; 2) the number of overtime hours Plaintiff worked in 2003 and 2004; and 3) the Plaintiff's regular rate of pay.
1. Plaintiff May Seek Damages Dating Back Three Years from December 30, 2006
The court found that, although the FLSA's usual statute of limitations lasts two years, Plaintiff could seek damages dating back three years from the filing of her Complaint on December 30, 2006. In order to receive the extension of the FLSA's normal two-year statute of limitations, the Plaintiff must present evidence demonstrating that the employer willfully violated the FLSA. A violation is willful if the employer either: 1) affirmatively knew its conduct violated the FLSA; or 2) recklessly disregarded whether its conduct violated the FLSA (citing Chao v. A-One Medical Services, Inc., 346 F.3d 908, 918 (9th Cir. 2003)). The court found that Plaintiff presented
prima facie evidence that Defendants' violation was willful since Defendants violated the FLSA in 1998 and were ordered by the Department of Labor to pay unpaid overtime to several employees. Ninth Circuit precedent (mostly taken from the aforementioned
Chao case) led the court to determine that Defendants' past "run-in" with the Department of Labor established a
prima facie case that Defendants acted at least with reckless disregard for the FLSA's requirements.
2. Plaintiff worked 536 Hours of Overtime in 2005, but a Genuine Issue of Material Fact Exists Regarding the Number of Overtime Hours Plaintiff Worked in 2003 and 2004
Plaintiff presented timesheets showing she worked 536 hours of overtime in the year 2005. Plaintiff further stated she worked approximately the same amount of hours in 2003 and 2004 as she did in 2005 and 2006. Defendants no longer had Plaintiff's time sheets for 2003 and 2004 and did not submit any evidence to directly dispute Plaintiff's assertion. Although the Defendants admitted they no longer had Plaintiff's time sheets for 2003 and 2004 and did not submit any evidence to directly dispute Plaintiff's assertion that she worked the same amount of hours in 2003 and 2004 as she did in 2005, the court refused to make a determination as a matter of law that Plaintiff worked the same number of overtime hours in 2003 and 2004 based on her 2005 timesheets. Defendants disputed that Plaintiff worked the same number of hours in 2003 and 2004 as she did in 2005 and this was enough for the court to hold that there is a material issue of fact regarding the number of overtime hours Plaintiff worked in 2003 and 2004.
3. A Genuine Issue of Material Fact Exists Regarding Plaintiff's Regular Rate of Pay
The central issue in this case surrounded Plaintiff's rate of pay during the time period at issue (November 30, 2003 to August 25, 2005). Plaintiff relied on payroll registries created by Defendants' payroll vendor to support her assertion that she was paid a $1700 salary twice a month. Since under the FLSA an employee's total compensation is converted to an equivalent hourly rate to calculate the overtime rate, the court found that Plaintiff's overtime wage at a salary of $1700 per month would be $31.87 per hour (determined by dividing Plaintiff's alleged weekly salary by the 40 maximum hours in a work week, and multiplying the result by 1.5 to calculate time-and-a-half).
Defendants contend that even though Plaintiff was paid on salary, her regular rate of pay was actually $6 per hour. Defendants explained that while Plaintiff was paid a salary, a large portion of this $1700 bi-weekly salary comprised "overpayments" to Plaintiff given to her "out of good conscience and because they liked her." In support of this, Defendants cite that they kept Plaintiff in a non-full time "on call" position in 2004 and nearly all of 2005 and that Plaintiff's normal hourly wage was $6 per hour (meaning she would have been entitled to an overtime wage of $9 per hour). Defendants also asserted that Plaintiff's "shift pay" salary schedule (in which Plaintiff was paid regularly on salary at $1700 twice a month even when she allegedly did not work) was developed in response to the Department of Labor's 1998 investigation into DARA Inc.'s failure to pay employees overtime and that Plaintiff agreed to be paid on salary at a "normal hour" rate of $6 per hour when she signed a "Pay Scale and Job Description Acknowledgment."
The court determined that since the record contains evidence suggesting both that Plaintiff's regular rate of pay was $1700 twice a month and $6 per hour, a genuine issue of material fact exists regarding Plaintiff's regular rate of pay. The court held that determining Plaintiff's salary depends on credibility determinations which are for the finder of fact.
Conclusion
In sum, the court found that Plaintiff was not entitled to Summary Judgment on the portion of Count I of her complaint which sought overtime pay for the period from Nov. 30, 2003 to August 25, 2005 because material issues of fact existed regarding her regular rate of pay and whether she worked overtime hours for which she was not paid. Defendants' Cross-Motion for Summary Judgment was also denied since there are material issues of fact regarding Plaintiff's regular rate of pay and whether she was adequately compensated for overtime hours worked.