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Keep your own timesheet
The U.S. Department of Labor has released an iPhone app called DOL-Timesheet. Here is the description from iTunes Preview: "This is a timesheet to record the hours that you work and calculate the amount you may be owed by your employer. It also includes overtime pay calculations at a rate of one and one-half times (1.5) the regular rate of pay for all hours you work over 40 in a workweek." By the way, the app is free, even though iTunes has a link to "buy and download."
If you have an Android phone, there are several free apps available to do the recording, if not the overtime pay calculation. I have not tried any of these, so I cannot warrant any of them. Go to the Android Market.
Don't lower the minimum wage!
Charles Lane, of the Washington Post, has written an op-ed suggesting (along with two other ideas) that the federal government should lower -- yes, lower -- the minimum wage.
Fortunately, Nobel Prize winner Paul Krugman 'splains it all (in a mixture of easy- and hard-to-follow sentences). Krugman says:
So let me repeat a point I made a number of times back when the usual suspects were declaring that FDR prolonged the Depression by raising wages: the belief that lower wages would raise overall employment rests on a fallacy of composition. In reality, reducing wages would at best do nothing for employment; more likely it would actually be contractionary.
Here’s how the fallacy works: if some subset of the work force accepts lower wages, it can gain jobs. If workers in the widget industry take a pay cut, this will lead to lower prices of widgets relative to other things, so people will buy more widgets, hence more employment.
But if everyone takes a pay cut, that logic no longer applies. The only way a general cut in wages can increase employment is if it leads people to buy more across the board.
The Atlantic Wire links to several other online sources that trash Lane's (and Fox News' and the Wall Street Journal's) proposal. My favorite: "By that logic, a recession demands that the poor earn less but that the CEOs more directly responsible for the downturn deserve bonuses."
"Restoring the Minimum Wage for America’s Tipped Workers"
The National Employment Law Project has just release a report, Restoring the Minimum Wage for America’s Tipped Workers. Here is the executive summary of the report:
In 2007, Congress finally raised the federal minimum wage for the first time in ten years, giving millions of low-wage workers a modest raise to $7.25 per hour by 2009.1 But for millions more low-income employees like the waitress at your local diner, paychecks have not budged.
Workers who rely on tips are subject to a special tipped worker minimum wage, which has remained frozen since 1991 at a meager $2.13 per hour—just $4,430 per year for a full-time worker. Congress has overlooked this little-understood part of our minimum wage system the last few times that it has increased the minimum wage. The result has been to drag down pay for tipped workers in many of our nation’s fast-growing service industries, such as restaurants, hotels, nail salons, and car washes, where millions today spend their careers.
The overwhelming majority of tipped workers are adult women—many of them supporting families. They are hurt the most by the frozen tipped worker minimum wage, which is an under-appreciated factor in the unequal pay that working women continue to receive across our economy.
Despite their stagnant wages, most tipped workers still earn a couple of dollars more than the full minimum wage once their tips are added in. In fact, if their tips are not enough to bring them up to the full minimum wage, their employers are required to make up the difference. But the tipped worker minimum wage was meant to do more. When it was created by Congress, it provided tipped workers an economic cushion and brought their pay closer to a living wage—something our economy badly needs more of today. That is what the tipped worker minimum wage used to do when it was higher—and what it still does today in the states that have not let it erode.
The low minimum wage for tipped workers, which forces these employees to subsist almost entirely on tips, is a key factor behind falling living standards and growing economic insecurity for workers in tipped industries. Since the tipped worker minimum wage was frozen at $2.13 in 1991, its value has fallen by 36% in real terms.
Workers who are forced to rely mainly on tips see their paychecks fluctuate widely, frequently leaving them unable to pay their bills or provide for their families. This problem is now worse than ever because economically squeezed customers are leaving smaller tips. As a result, waitresses and waiters—the largest group of tipped workers—have three times the poverty rate of the workforce as a whole.
The solution is to guarantee tipped workers a strong minimum wage that is paid directly by their employers. That is what the federal Fair Labor Standards Act (FLSA) did historically and what many state minimum wage laws still do today. Thirty-two states have preserved or adopted stronger protections for tipped workers, and by 2010 over half of those will guarantee tipped workers 60% of the full minimum wage—the level of protection that the federal minimum wage provided tipped workers until 1989. These states have found that a strong tipped worker minimum wage raises living standards for this growing workforce without hurting business growth.
Congress and the rest of the states should follow their lead by restoring protections for the nation’s millions of tipped workers. Specifically, they should:
1. Substantially raise the tipped worker minimum wage. For starters, Congress and the states that currently have weak protections should restore the tipped worker minimum wage to at least its historical level of 60% of the full minimum wage. But over the longer term, the federal and state tipped worker minimum wages should be raised to 100% of the full minimum wage as seven states have done.
2. Make the tipped worker minimum wage increase automatically when the full minimum wage increases by making it a fixed percentage of the full minimum wage or a fixed dollar amount less than the full minimum wage.
3. Strengthen protections against “tip stealing” to ensure that managers or employers do not skim off a portion of workers’ tips.
4. Fight attempts to roll back tipped worker minimum wages in states that already provide strong protection for these workers.
GAO study shows appalling laxness in US Labor Department investigations of wage and hour complaints
The Government Accountability Office released a report on 25 March dealing with its investigation of the Wage and Hour Division of the Labor Department. The following is part of the summary of the report:
GAO found that WHD frequently responded inadequately to complaints, leaving low wage workers vulnerable to wage theft. Posing as fictitious complainants, GAO filed 10 common complaints with WHD district offices across the country. The undercover tests revealed sluggish response times, a poor complaint intake process, and failed conciliation attempts, among other problems. In one case, a WHD investigator lied about investigative work performed and did not investigate GAO’s fictitious complaint. At the end of the undercover tests, GAO was still waiting for WHD to begin investigating three cases—a delay of nearly 5, 4, and 2 months, respectively. ...
GAO identified 20 cases affecting at least 1,160 real employees whose employers were inadequately investigated. For example, GAO found cases where it took over a year for WHD to respond to a complaint, cases closed based on unverified information provided by the employer, and cases dropped when the employer did not return phone calls.
GAO’s overall assessment of the WHD complaint intake, conciliation, and investigation processes found an ineffective system that discourages wage theft complaints. With respect to conciliations, GAO found that WHD does not fully investigate these types of complaints or compel employers to pay. In addition, a WHD policy instructed many offices not to record unsuccessful conciliations in its database, making WHD appear better at resolving conciliations than it actually is. WHD’s investigations were frequently delayed by months or years, but once complaints were recorded in WHD’s database and assigned as a case to an investigator, they were often adequately investigated. --
Wage and Hour Division’s Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft
When people ask me what kind of law I practice, one of the things I say is "wage and hour cases." That's way too nice a description. From now on, I will say, "I prosecute wage theft." If someone knocks you down and takes your purse or wallet, it's "robbery." If they break into your home or car and take something, it's "burglary." If Bernie Madoff takes your life savings, it's "fraud." They are all thefts of your money.
And if your employer does not pay the wages you are due -- and are owed according to the law -- then it is a theft of your wages. As Kim Bobo points out in "Wage Theft: Faces of a Hidden Crime, Part 1 of 3", wage theft is not paying the minimum wage, not paying for overtime, wrongly classifying an employee as a "contractor" so no benefits are paid (and usually no overtime), taking illegal deductions, and not paying employees at all.
While the production values on "Wage Theft" are low, the information is high quality. After you watch Part 1, go on and look at Part 2 (mainly about Interfaith Worker Justice) and Part 3 (in which there is a resolution of the problems presented in Part 1).
Interfaith Worker Justice has a great page of resources on wage theft.
Wage and Hour
If you are interested in consulting with me about your wage and hour situation, please contact my office.
Federal law requires that most employees be paid a minimum wage of $6.55 per hour (as of 24 July 2008) and be paid 150% of the regular wage (which may be more than the minimum wage) for each hour over 40 in a work week. There are many exceptions to both parts of that statement. Here are some typical violations:
Deductions -- An employer may not deduct the cost of required uniforms from the worker’s pay, if that would reduce the worker’s pay below the minimum wage for any work week.
Cash shortages -- An employer cannot deduct cash shortages from the worker’s wages, if that would reduce the worker’s pay below the minimum wage for any work week.
Tips -- Tipped employees may be paid 50% of the minimum wage only if the amount of the worker’s total income does not go below the minimum wage for a particular work week. (To be considered a “tipped employee,” the individual worker must usually receive more than $30 per month in tips.)
Commissions -- Commission employees must be paid at least the minimum wage each work week. Recently, the U.S. Labor Department sued a company that was paying its commission employees on a monthly basis, without making sure they were receiving at least minimum wage for each week.
No time records -- If the employer keeps no time records at all, there may be a violation of the minimum wage law.
Generally -- A worker working more than 40 hours in a work week must be paid 1-1/2 times the regular rate for each hour over 40.
Working through lunch -- If you work through lunch, you should be paid for the time. You must get at least 30 minutes of time with no work duties – time that you can spend as you want to – or the employer must pay you.
Comp time -- Public employers are allowed to use a “comp time” system so that excess hours in one week are compensated by time off in a later week. The time off must be 1-1/2 times the amount of overtime. Private employers must pay overtime and may not use “comp time.”
Work at home -- If the employer requires the employee to do work before leaving home or after returning home, the employer must pay for this time. An example: a service worker has to call into work to get the first assignment of the day and must drive from home to that first assignment. The time spent getting the assignment and getting to the customer’s location may be time for which the worker should be paid.
Salaried employees -- Even if the employer says that an employee is “salaried,” the worker may be entitled to overtime pay in certain situations. To be exempt from the overtime rule, the employee must be paid at least $455 per week and have duties that qualify the worker as an executive, manager, administrative employee, or professional. These exceptions usually apply if the worker
• is directly related to the management of his or her employer's business, or
• is directly related to the general business operations of his or her employer or the employer's clients, or
• requires specialized academic training for entry into a professional field, or
• is in the computer field, or
• is making sales away from his or her employer's place of business, or
• is in a recognized field of artistic or creative endeavor.
Prohibiting overtime -- An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, will not impair the worker’s right to compensation for the overtime hours that are worked.
Cash payments -- Some employers pay for overtime hours “off the books” by making the payment in cash without reporting the hours on the pay check. This may be a violation of the overtime law.
Overtime: not just for blue-collar workers
Legal Times newspaper reports on a growing trend in overtime cases in Drug Salespeople Sue for Unpaid Overtime: Following what lawyers describe as a growing trend in class action overtime litigation, thousands of pharmaceutical representatives are suing eight major drug companies over unpaid overtime for all the hours they spend hawking drugs in doctors' offices.
Currently, more than a dozen such pharmaceutical overtime lawsuits -- all of them filed in recent months -- are pending in California, Connecticut, New Jersey and New York. Several more are expected to be filed this week in New York, Pennsylvania and possibly Minnesota.
Defendants include AstraZeneca, Pfizer Inc., Johnson & Johnson, Amgen Inc., Eli Lilly & Co., GlaxoSmithKline PLC, Bayer Corp. and Hoffman-LaRoche Inc., which had oral arguments scheduled for Monday. ...
In the pharmaceutical cases, plaintiffs allege that drug companies are misclassifying them as salespeople, denying them overtime even though they work 50- to 60-hour weeks. They argue that they're not actually selling anything, but rather acting as public relations representatives who memorize carefully worded scripts about drugs.
"These reps aren't making sales. They're marketing products to doctors ... They are not sales reps, but pharm-bots who do and say as they are told," said Eric Kingsley of Los Angeles-based Kingsley & Kingsley, who is representing plaintiffs in several of the lawsuits.
Some company officials denied the allegations, while others declined comment.
Mortgage loan brokers owed minimum wage, DOL claims
The Miami Herald reports:
The U.S. Department of Labor has filed a lawsuit against a mortage broker with local operations, alleging the company owes at least 200 loan officers more than $239,000 in back pay.
Ohio-based Alliance Mortgage Group Inc. and Credit Financial Services did not pay its overtime-eligible loan officers properly, providing only a monthly commission and in some cases wages that were lower than the federal minimum wage, the department's Wage and Hour division said in a statement.
Fifty-one of the 211 employees listed in the complaint are from Alliance Mortgage's South Florida locations in West Palm Beach, Boca Raton and Aventura. Payments owed the local employees ranged from more than $150 to almost $2,150, according to the complaint.
Comment: A copy of the complaint is available here.
Under the Fair Labor Standards Act, an employer must pay an employee at least the minimum wage ($5.15 per hour), even if that employee is working on a commission system. The complaint alleges that many of Alliance's mortgage brokers did not earn enough in commissions to give them at least the minimum wage.
Another point to note about the suit: the Department of Labor sued not only the corporations that employed the brokers, but also the president and chief financial officer of the corporations. As the guys who set the compensation policy of the corporations, they are liable along with the actual employers.