The Obama administration and Labor Secretary Thomas Perez intend to rewrite the rules on overtime pay, which generally protect carpenters and drywall installers and laborers. A little-noticed lawsuit under the existing rules, however, involves non-craft construction project staff — and the distinction about who is exempt and who is eligible for overtime pay.
In late June, President Barack Obama announced a proposed rule change that raises the threshold above which white-collar employees may be exempt from overtime pay, from $455 per week to $970 per week. The U.S. Dept. of Labor estimates that this would extend overtime protections to almost five million additional workers in a year.
The proposed rule also includes automatic updates to the salary level to keep it adjusted for inflation.
Perez recently told a PBS interviewer that “we’re taking these folks who are working 60, 70 hours a week and making $35,000 at the most and saying, that’s not fair. You should be compensated fairly, because they’re effectively working 10, 20 hours for free in some cases."
Employer groups have said that the new planned rules would backfire. Instead of providing overtime for millions of more workers, they say, employers are going to spread the same amount of money across a slightly larger pool of hourly and part-time workers.
Lawsuits asserting the rights of workers under the Fair Labor Standards Act of 1938 are not uncommon in construction; in just the span of days from July 29 to July 31, five such lawsuits were filed in federal district courts against construction employers.
However, the FLSA lawsuit filed against Walsh Construction Co. in January, 2013 broke the trend because the plaintiffs were not skilled craft workers.
The class-action lawsuit, filed in Connecticut's federal district court, so far features five “project administrative assistants” and accountants alleging that Walsh Construction Co. misclassified them as employees exempt from overtime pay.
Preliminary Motions Prevail
So far, the parties are still engaged in answering and amending complaints. The plaintiffs' legal representatives did not respond to inquiries for comment or interview. Officials at Walsh's Chicago headquarters declined to comment when contacted.
The case is named Alicea et al v. Walsh Construction Co. and the plaintiffs allege in their amended complaint that Walsh classified them as exempt from overtime pay despite the fact that they were “not true accountants,” and that Walsh had also allegedly “failed or refused to keep adequate time records” while using a batch payroll system.
In a response to the amended complaint, Walsh Construction Co. representatives claim that its acts or omissions occurred in good faith, based on conformity with and reliance on the FLSA itself.
The FLSA mandates that non-exempt employees receive pay equal to time -and-one-half for every hour worked beyond the standard 40-hour work week.
Mentioned in the complaint, but not in the charges, are allegations by several of the plaintiffs that their employment was terminated after raising the issue of overtime pay with supervisors.
Those allegations remain unproven.