Sharon Stone’s Nanny, Overtime Pay and the Silicon Valley Professional

The number of wage and hour violation class action claims has surged in the past two years, according to a report by CNN last week. According to CNN, there has been a 400 percent increase from 2000 in the number of wage and hour class action lawsuits filed in federal court. In 2011 the number of such cases topped 7,000, and past years have included major suits against Wal-Mart, IBM, Taco Bell and Oracle. These wage and hour claims are usually brought under the Fair Labor Standards Act as well as state labor laws, which provide protections for workers from being forced to work off the clock, not being paid for working overtime or being paid below the federal minimum wage, among other issues.
Recent national headlines about the case filed against actress Sharon Stone by her former nanny, alleging violations of the Fair Labor Standards Act demonstrates that no one is immune from charges for such violations. This case against Sharon Stone also highlights the increasing importance of the FLSA in protecting increasingly vulnerable employees in the wake of the worst economic crisis since the Great Depression. In this case, Sharon Stone’s former nanny alleged that not only did the Academy Award-nominated actress harass and make derogatory comments about her, but she also fired her for accepting overtime pay for work that she performed during vacations and holidays.
Her case relies on one of the most important provisions of the Fair Labor Standards Act, that relating to overtime pay, which is also covered by the California labor codes. The overtime pay provision of the Fair Labor Standards Act requires that employers pay their workers for any hours worked over 40 hours a week at 1.5 times their hourly wage. California state law has an even stricter requirement in calculating overtime, requiring payment of one and a half the hourly wage for any hours worked over 8 in a day, in addition to the 40 hours a week restriction. These overtime provisions apply to all workers in all industries at all job levels, regardless of salary or job title, unless the position falls under one of a few narrow exceptions. Some of the most important exemptions under federal law are for bona fide administrative, executive, professional, computer, and outside or commissioned sales employees. There are a number of very complex requirements for such positions to be exempt from the overtime provisions, and there has been much litigation over the issue. One major requirement under federal law for most of the exemptions is that the position be salaried and pay over $455 a week. The California labor code has very similar exemption requirements, with the required salary varying depending on the industry. For computer professionals, for example, a court would look carefully at the job duties of the computer professional, the hourly rate and other issues in determining whether a position is exempt from the overtime requirements.
In the case of Sharon Stone’s nanny, her work would probably not fall under any of the overtime exemptions as her job duties would not qualify her under the broad exemptions for administrative, professional or other related positions. Even if she was salaried, any work she performed over 40 hours a week or 8 hours a day would probably need to be paid at time and a half. Sharon Stone’s nanny claims that she was not paid time and a half for her work over weekends and holidays, which presumably would have put her over the 40 hour a week provision. She also claims that she was retaliated against when she complained about not being paid, also a violation of the Fair Labor Standards Act. If Sharon Stone’s nanny’s claim is successful, she would be entitled under the Fair Labor Standards Act for any back pay under the overtime provisions, although she would not be entitled to any punitive damages under the statute.
In Silicon Valley, the greatest attention has certainly been to the computer professional exemption of the Fair Labor Standards Act. Silicon Valley has certainly been a hot-spot for start-ups and other high-powered technology companies, where long hours and missed weekends are the norm. Recent developments in California state law on the issue has engendered a great deal of confusion in Silicon Valley regarding the applicability of the Fair Labor Standards Act and the California labor laws to such computer technology professionals. While we will explore such issues facing computer professionals in more detail in future posts, the recent case concerning Sharon Stone and the sharp jump in wage and hour suits filed in the past few years does highlight the increasing importance of the overtime issue for all California workers in these difficult economic times.

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