Why Can’t Law Firms Obey the Wage and Hour Laws?
“Why does a hearse horse snicker, hauling a lawyer away?”
One of the many hats I have worn in life is that of a “lawyer’s lawyer,” meaning that I have represented lawyers who have got themselves into trouble with the law. In my case, it’s been the wage and hour laws, and problems involving the exemptions, working time and overtime compensation. Typically, law firms pay well above the minimum wage. Indeed, back in the day, a good legal secretary was worth his or her weight in gold and commanded a large wage premium above the minimum wage. Thus, lawyers rarely violated the minimum wage laws. But correctly classifying workers, paying for all hours worked, and paying time and one-half the regular rate of pay for hours over 40 in a workweek, are another issue. Lawyers too often think their support staff is sufficiently paid, often on a salary basis, and they don’t want to pay more.
But legal secretaries, paralegals, account receivable clerks, billing assistants, and other law firm support staff are generally nonexempt employees under the Fair Labor Standards Act (“FLSA”) and thus are entitled to be paid their regular rate of pay for all hours worked plus premium pay when they work overtime. They generally do not satisfy for the special highly compensated employee exemption duties test. The temptation to work support staff the same long hours as attorneys, to interrupt lunches, to call staff on week-ends, and similar work activities, all of which can land the law firm in hot water under the wage laws. At one law firm I know, the named partner paid his secretary/assistant practically six figures and refused to pay any premium overtime. That was a basic error and a possible public relations embarrassment in the making.
Which brings me to exhibit A of this blog, which is a press release # 22-508-CHI dated April 6, 2022, involving a Detroit, South Haven and Ottawa, Ohio medical malpractice law firm that paid its administrative and support staff workers a salary for all hours worked but failed to pay at least 36 workers the overtime wages they earned. DOL determined after investigation that the employees of McKeen & Associates P.C. were not exempt. See https://www.dol.gov/newsroom/releases/whd/whd20220406. As the press release kindly says: “McKeen & Associates P.C. misapplied overtime rules”. Now the law firm is $112,000 poorer and has been publicly tarred and feathered.
So why does the Department of Labor snicker when hauling a lawyer away?