Among the most common labor disputes are those in which employees are misclassified in one form another. The majority of employees are eligible for minimum wage benefits, workers comp, and overtime. However, some employees are not eligible for overtime, and independent contractors, who are presupposed to be business owners, are not entitled to any of those.
Most recently, Cerner Corporation attempted to fight off a class-action misclassification lawsuit in which employees of the company were dishonestly labeled as independent contractors. The lawsuit was filed in federal court and tried in the United States District Court for the Western District of Missouri. The settlement, which was approved by judge Fernando J. Gaitan, Jr., was reportedly for $4.5 million. Cerner Corporation denies any wrongdoing and other details of the settlement remain under seal.
The Case against Cerner Corporation
Workers for EHR developer claim that Cerner misclassified some of their employees in order to avoid paying them overtime. It further alleges that employees who were not exempted by federal law were paid late when they were paid at all. Lastly, the complaint stated that Cerner defrauded its employees by intentionally processing their timecards improperly.
On the last accusation, employees claim the Cerner compensated them based on a “fluctuating workweek” method for calculating wages. They did this despite the fact that their workers not paid on a fixed salary.
Each of these violates federal labor law.
Understanding the Fluctuating Workweek Method of Calculating Overtime
There are certain positions that will require employees to work 48 hours one week and then 32 hours another week. Let us assume that the employee is not exempt from overtime due to executive or professional functions within their company.
As an alternative to standard payment of overtime, an employer can opt to pay an employee a fixed salary regardless of whether or not the employee works greater or fewer hours during a given week. As a tradeoff, the employee is only compensated for 50% of his or her normal wage. Federal law says that this is legal under specific circumstances. None of those, however, were present in the case of Cerner and their employees.
When can an Employee be Compensated on a Fluctuating Workweek
Employers who use the fluctuating workweek method must meet five requirements. Those are:
- The employee hours must literally fluctuate from week to week;
- The employee must be paid a fixed salary that compensates them for all hours worked;
- The rate of compensation must not be less than the minimum wage;
- The employee must be paid at a rate of one half their normal compensation for overtime hours worked;
- There must exist a clear mutual understanding that the employee is being compensated a fixed rate regardless of how many hours they work.
Cerner ended up failing the state’s litmus on points 2 and 5. In other words, they were not entitled to invoke a fluctuating workweek as a defense to shortchanging their employees.
Contact an Employment Attorney to Manage Your Claim
The employment attorneys at HKM Kansas City have prevented thousands of employees from being shortchanged by their employers.
