United States District Court, E.D. Virginia, Alexandria Division
Ellis, III United States District Judge.
are eighteen (18) construction workers, each of whom sued
their former employers and/or supervisors. Capital Commercial
Solutions, LLC ("CCS"), CCE Specialties, LLC
("CCE"), Ixel R. Morales ("Morales"), and
Keren Torres ("Torres''), for violations of the
minimum wage and overtime provisions of the Fair Labor
Standards Act ("FLSA"), breach of contract and
conversion. (Pis.' Am. Compl.) (Doc. 7.) Plaintiffs
settled their claims with defendant CCE, who appeared in this
matter and agreed to pay all of the plaintiffs' alleged,
"actual" damages. See Order Approving
Settlement, July 17, 2017 (Doc. 42). Plaintiffs now seek
liquidated damages under the FLSA against the defaulting
defendants CCS, Morales and Torres.
motion for default judgment (Doc. 43), which seeks $44,
749.74 in liquidated, FLSA damages, was referred to
Magistrate Judge Anderson for a hearing and entry of a Report
and Recommendation ("Report"). Judge Anderson filed
his Report on August 11, 2017, recommending that the
plaintiffs be awarded $39, 096.25 in liquidated damages - $5,
653.49 less than the plaintiffs requested. (Doc. 48.) Bight
of the plaintiffs objected to Judge Anderson's Report,
claiming that he improperly calculated a portion of their
overtime wages. (Doc. 49.) Their objection is now before the
to its essence, plaintiffs argue that Judge Anderson erred by
using the minimum wage as opposed to their contracted rates
of pay when calculating their overtime wages for the weeks
they were paid nothing by their employers. For the reasons
set forth below, plaintiffs are correct and their objection
must be sustained.
FLSA "generally requires employers to compensate
employees at the overtime rate for all work performed over 40
hours per week." Roy v. Cty. of Lexington, 141
F.3d 533, 53S (4th Cir. 1998); see also Flood v. New
Hanover Cty., 125 F.3d 249, 251 (4th Cir. 1997)
("As a general rule, the FLSA provides that an employer
may not employ an employee for a workweek longer than forty
hours unless it pays its employee one and one-half times the
employee's 'regular rate' for all hours in excess
of forty."). Employees are due overtime compensation
"regardless of whether they work on an hourly, 29 C
JF.R. § 778.110, piece-rate, 29 C.F.R. § 778.111,
day or job rate, 29 C.F JL § 778.112, salary, 29 C.F.R.
§ 778.113, commission, 29 C.F.R. §§ 778.117 to
778.120, or other basis." Regan v. City of
Charleston, S.C., 131 F.Supp.3d 541, 546 (D.S.C. 2015).
An employee's Regular rate of pay" is the basis for
calculating his overtime rate.
Department of Labor's regulations, quoting Che Supreme
Court's decision in Walling v. Youngerman-Reynolds
Hardwood Co., 325 U.S. 419, 424-25 (1945), have the
following to say about the regular rate of pay: "Once
the parties have decided upon the amount of wages and the
mode of payment the determination of the regular rate becomes
a matter of mathematical computation." 29 CFR
§778.108. Thus, when the parties have contractually
agreed to an hourly rate, as opposed to a weekly, monthly or
annual rate, that hourly rate is the regular rate of pay.
See 29 CFR 778.110 ("If the employee is
employed solely on the basis of a single hourly rate, the
hourly rate is the Regular rate.'"); see also
Hunter v. Sprint Corp., 453 F.Supp.2d 44, 57 (D.D.C.
2006) ("[T]he regular rate for an hourly rate contract
is the hourly rate specified by the contract"). Here,
plaintiffs contracted with their employers to be paid a
certain amount per hour. During some weeks, plaintiffs were
paid the agreed-upon-rate; during others they were paid
nothing. No one contends that Judge Anderson erred
in calculating overtime for the weeks plaintiffs were paid
the hourly rate as specified in their oral contracts); but
plaintiffs believe Judge Anderson erred by using the minimum
wage ($7.25) instead of the contracted hourly rate in
calculating their regular rate of pay for the weeks they were
paid nothing. They are right.
FLSA establishes a statutorily mandated floor, below which an
employer's conduct cannot fall. But the FLSA does not
preclude the parries from bargaining for hourly wages above
the minimum wage. Here, the employees negotiated their hourly
rate and were, in fact, paid their contracted wage for
several weeks. Their employers cannot unilaterally reset the
plaintiffs9 regular rate of pay from the contracted hourly
rate to the federally-mandated minimum wage by simply
refusing to pay them. To hold otherwise would deprive the
plaintiffs of the benefit of their bargain and reward
employers for violating the FLSA. The FLSA does not
contemplate such a perverse result; and therefore, the
established, contracted hourly rate should have been used
instead of the minimum wage in calculating the plaintiffs9
overtime for the weeks they were not paid by their
and for good cause, It is hereby ORDERED that plaintiffs'
objection (Doc. 49) to the Magistrate Judge's Report is
hereby ORDERED that the factual findings of the Report (Doc.
48) are ADOPTED, and the legal conclusions are ADOPTED IN
PART as modified by this Order.
further ORDERED that final judgment will be entered against
CCS, Morales, and Torres in the amount of S44, 749.74.
is further ORDERED that within fourteen (14) days of
the date of this Order, plaintiffs' counsel may file a
motion requesting additional attorneys' fees and costs
for their efforts in obtaining default judgment against
defendants CCS, Morales and Torres.
Clerk is directed to provide a copy of this Order to all
counsel of record, and to place this matter among the ended