On July 29, 2024, laborers sued a carpet cleaning and mold remediation company in Georgia called Genesis Restoration Services, Inc. (“Genesis”) for paying flat, daily rates that did not provide proper compensation for overtime.
According to the lawsuit, the named plaintiff was called a “manager” by Genesis but performed substantially the same job duties as laborers and brought the case on their behalf. Laborers’ job duties allegedly included: “loading and unloading materials onto the work truck such as paint, sheetrock, ladders, and wet/dry vacuums; cleaning and restoring carpets for Defendants’ customers; and restoring homes and other spaces following water, fire, and mold damage.” In addition, the purported “manager” was responsible for driving a company vehicle to and from each project that Genesis assigned.
The “manager” and laborers typically worked from 8:00 a.m. or 9:00 a.m. until approximately 7:00 p.m. or 8:00 p.m. for five to six days per week.
Despite these long hours, Genesis only paid the “manager” a flat rate of $250 per day and similarly paid laborers flat, daily rates.
The lawsuit alleges that these daily rates violate overtime laws because they do not provide compensation of one and a half times the employees’ regular rates for hours worked over 40 per week. Indeed, a federal regulation that addresses daily rates specifically, 29 C.F.R. § 778.112, provides, in sum and substance, that if an employee is paid a flat sum for a day’s work, then his regular rate is calculated by dividing total weekly compensation by total weekly hours worked, and the employee is “then entitled to extra half-time pay at this rate for all hours worked in excess of 40 in the workweek.”
This lawsuit shows that a fixed, daily rate may not provide proper compensation to employees working more than 40 hours per week. Additionally, while an employer may call a particular employee a “manager” or “supervisor,” that employee may still be eligible for overtime compensation based on his or her job duties.