Posted by marykeating on August 27, 2010 under Wage and hour issues | 
The Fair Labor Standards Act requires most workers to earn at least minimum wage, and for non-exempt workers to earn overtime pay. Some workers have been completely exempt from protection under this law, however. Until 1974 there was no set limit on hours or minimum pay for live-in workers such as housekeepers or nannies. But even after they were finally included in the law, live-in workers were still exempt from overtime, and companions for the elderly or the ill were not covered by the law at all.
New York has passed a law expanding the rights of domestic workers, entitling them to overtime after 44 hours for a live-in worker, after 40 hours for others, and mandating one day off per week. The Domestic Workers’ Bill of Rights also requires vacation time after a year of service, and extends the sexual harassment law to live-in employees. (Under federal law, the employer would not be liable in any event unless he or she had 15 full-time employees.)
Other states may follow New York’s lead, as news reports of abusive conditions for servants proliferate. Once an employee accepts both the domestic duties and a place to stay, the influence from the outside world can shrink.
Posted by marykeating on August 12, 2010 under Collective rights, Wage and hour issues |
The New York Times reported that the health care industry is the latest industry in the Department of Labor sights. After finding that hospitals and nursing homes are misclassifying workers, and failing to pay overtime correctly, the Department has obtained large settlements against Kaiser Permanente and SSM Health Care, and is pursuing residential care facilities. Two problems are commonplace. One is the classification of an employee as exempt from overtime, when the employee is not properly classified as exempt. The second is failing to pay overtime pay when
employees actually work through unpaid meal breaks.
The automatic deduction of meal breaks has been a problem in many industries. An employee must be fully relieved of work obligations during a lunch or dinner period in order for the employer to mark it as unpaid. Yet many employees in high-paced workplaces are expected to answer the telephone, finish the report, or respond to patient needs during the break. This is especially the case with short meal breaks, which as a practical matter prevents an employee from leaving the worksite.
The Department of Labor is not the only danger for employers engaging in this behavior. Employees, alone or in groups, are empowered to sue their employers, and can receive double the unpaid pay as liquidated damages, as well as attorney’s fees.
Posted by marykeating on April 29, 2010 under Federal wage and hour law, Pending legislation |
I’ve discussed misclassification of employees before. The issue comes up when an employer decides to treat a worker as an independent contractor when the person actually qualifies as an employee. The savings to the employer include worker’s compensation premiums, unemployment insurance premiums, the employer share of the social security and medicare taxes, and, often, the cost of fringe benefits. In addition, an employee has protections under various non-discrimination laws which usually do not apply to independent contractors.
Congress now has before it a new version of The Employee Misclassification Prevention Act. It was introduced last week, and is expected to get a favorable hearing.
The law would add enforcement teeth to the Fair Labor Standards Act. One provision adds a presumption that someone receiving money for the performance of work is an employee, unless the employer has maintained records related to the classification and the hours worked and wages paid. In addition, the misclassified employee will be entitled to doubled liquidated damages for that violation. In other words, the amount recoverable by the misclassified employee could be triple the unpaid or underpaid wages, as is the case in state law.
Maryland is targeting specific industries, such as the landscaping industry, believed to have rampant violations. The new federal bill requires the Department of Labor to engage in targeted audites of industries the department finds to have a frequent incidence of misclassification.
Posted by marykeating on April 11, 2010 under Maryland wage law, Pending legislation |
The Maryland legislative session is nearly over for the year. One favorable bill clarifies the state’s wage payment and collection act to include overtime. Both houses have passed the bill, and it’s expected to be signed by Governor O’Malley.
The wage law helps employees enforce their rights to payment for their work. When there is no good faith dispute about the worker’s entitlement to the wages, a judge may triple the amount found to be owed, and award the employee reasonable attorney’s fees for taking the case to court. The policy behind the law is clear. When an employer withholds wages (and many such cases come up when the employer refuses to pay the last paycheck, apparently figuring that the employee will go away quietly), the employee should have an effective means of obtaining the compensation. Permitting additional damages and attorney’s fees are good incentives. In addition, the law penalizes the employer for holding back pay for no reason other than wage theft. On the other hand, if there is an actual dispute over the pay owed, or the amount of a commission, the employee cannot obtain the enhanced damages, but still has access to court.
Now the law will specifically include overtime pay as an element of the compensation that the employee may sue for. Not all courts had accepted the idea that compensation of any kind included overtime pay, so employees would sue under the Maryland law for unpaid straight-time wages or bonuses, and under the federal Fair Labor Standards Act for their overtime pay. This made the cases needlessly complicated. This may not change the reality that federal judges seem more likely to apply the correct burden of proof (it’s on the employer to show exemption from overtime), but it is a good clarifying law.
Posted by marykeating on March 23, 2010 under Federal wage and hour law, retaliation |
The Supreme Court agreed yesterday to decide a case of critical importance to retaliation claims under the federal wage law, the Fair Labor Standards Act. The request to the Supreme Court presented one question for review:
Is an oral complaint of a violation of the Fair Labor Standards Act protected conduct under the anti-retaliation provision, 29 U.S.C. § 215(a)(3)?
Anti-retaliation laws give powerful protection for employees who either complain about their own discriminatory treatment, or someone else’s. Often the proof available to establish sexual harassment, for example, is too disputed for the plaintiff to win, but the employer’s retaliatory reaction is crystal clear.
For historical reasons the language of the Fair Labor Standards Act is different. That law dates from the Great Depression, while the Civil Rights Acts from the 60s, 70s, and 80s broadened the language defining retaliation.
In the case before the Supreme Court, a Wisconsin factory worker complained to his supervisor and to the company’s human resources department that the company’s location of time clocks was illegal. The placement of the clocks led to employees not being paid for time spent putting on and taking off protective clothing and Kevin Kasten warned his company, using the company’s reporting procedures, that it was acting illegally. He was warned, suspended and fired. The company lost in the trial court but convinced the appeals court that oral complaints cannot be “filed,” as required by the statute. 
The Supreme Court accepts very few cases every year, but one of its major criteria is whether there is a “split” in the Circuits, meaning that appellate courts of equal stature interpret the same law in opposite ways. This issue has split the Circuits, with many agreeing that to “file” a complaint does not require a piece of paper.
It is never safe to guess why the Supreme Court takes on a case, or how the case will come out. Still, it will be helpful to get this issue settled. If the Court upholds the Seventh Circuit, and permits retaliation for oral complaints of wage violations, the outcome will likely be more retaliatory firings, but also perhaps more union campaigns to combat the perceived unfairness, and more employees complaining in writing or to the Department of Labor when they believe there are wage and hour missteps.
Posted by marykeating on March 20, 2010 under Wage and hour issues |
Wage theft is a common problem, afflicting low income workers disproportionately.
Wage theft may take such forms as a refusal to pay a day laborer, bouncing a weekly paycheck, or failure to pay overtime. Unfortunately, it is not easy to enforce wage laws when relatively small amounts are involved. Some workers do not complain for fear of retaliation. Others find themselves deprived of their last week of wages after they quit or are fired, but the costs of pursuing a claim of a few hundred dollars make the effort too difficult for most people. In addition to filing and service fees, enforcement of a judgment includes delays and costs. For example, filing and serving a bank garnishment costs at least $18, and then more filings are required to obtain the funds. Moreover, courts often impose too high a standard of proof for employees, who do not routinely copy their timesheets or time cards, and therefore their testimony on the number of hours they worked does not carry the burden of proof.
Employers engaged in a pattern of wage theft gain an illegitimate competitive advantage. Therefore, the effort to stop wage theft should gain support from workers as well as honest employers. A new initiative in Florida may provide a useful template for solving the typical impediments to
Miami-Dade County, Florida, enacted a county-wide ordinance designed to streamline a process for complaining of wage theft. The county has a high proportion of immigrants and low-paid workers. After a year of work by the South Florida Wage Theft Task Force, working with the South Florida Interfaith Justice group, the ordinance passed unanimously. One objective was to make the process easier than using small claims court. There is no filing fee, a claim may be made and pursued by the employee or someone acting on his behalf (not necessarily a lawyer), and service of process is made by the County. Under the ordinance, if the employer does not pay and a hearing is required, the successful employee receives an order awarding doubled (liquidated) wages dues, which are then tripled as a penalty for the violation. In addition, the employer owes interest on the amount to both the successful employee and the County.
The design of this ordinance favors early conciliation (the employer can avoid some of the costs), easy access by the employee, and rapid resolution, that is payment to the employee. Other cities are considering such legislation, and San Francisco already has one on its books. The proliferation of this kind of legislation would even the playing field for workers and employers alike.
Posted by marykeating on February 27, 2010 under Government contractors, Wage and hour issues |
Long a punch line, the idea that the government can step in and improve lives has its deep seated detractors. But the Obama administration is discussing using the federal government’s massive economic power to change the way workers are treated. According to a New York Times article, one in four workers is employed by a company with a federal contract.
One in four workers translates into more than a quarter of American families affected, since so many families have two wage-earners. The administration intends to scrutinize the procurement process, and favor companies with good records on labor and the environment, and those with good wage structures. Naturally this potential executive order has drawn fire. Critics contend that the cost of government contracts will increase, that union shops will be favored, and that many companies will drop out of contention. The article points out a Maryland study, however, that shows the opposite. When Maryland required contractors to pay a living wage (higher than minimum wage), more 
contractors placed bids. “Some higher-wage companies said they began seeking government bids because the new policy leveled the playing field.” In addition, the drain on government resources by the working poor would decrease. Moreover, some evidence indicates that the lowest paying contractors do not produce the same quality work as the companies that pay higher wages and provide employee benefits. No executive order has issued yet, and critics questioned whether legislation would be necessary to change the procurement process. The ramifications could be significant, however, in reversing the rising gap between the most and least affluent in this country.
Posted by marykeating on January 29, 2010 under Discrimination in employment, Wage and hour issues |
As is typical in a State of the Union address, the President touched Wednesday on a number of themes, domestic and foreign. But he specifically alluded to two employment issues that have a lot of resonance in a post-Bush era.
“We are going to crack down on violations of equal pay laws — so that women get equal pay for an equal day’s work.” Nice words; in actuality it has proved difficult for women to prevail on equal pay laws, which require the genders to be paid equal pay for equal work, where the jobs require equal skill, effort, responsibility, and working conditions. Although cases say that the jobs need to be “substantially” equal, courts have too often required women to show that the male who is making more money is doing the identical job, and has identical qualifications. There are always some differences between people. Proving that two jobs are substantially equal is nearly impossible at higher levels, like vice presidents. Yet when a woman at the same level of a corporate organization chart makes $30,000 less than her peer, there should be some redress. Let’s hope the President’s promise comes with some improved legislation.
In the inspirational department, the President said this:
“Abroad, America’s greatest source of strength has always been our ideals. The same is true at home. We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we are all created equal, that no matter who you are or what you look like, if you abide by the law you should be protected by it; that if you adhere to our common values you should be treated no different than anyone else. We must continually renew this promise. My Administration has a Civil Rights Division that is once again prosecuting civil rights violations and employment discrimination.”
Again, nicely stated. But there are plenty of indications that the enforcement has been ratcheted up at the federal level, by both the EEOC and the Department of Justice.
Posted by marykeating on December 23, 2009 under Employment benefit issues, Maryland wage law |
Workers are entitled to be paid for the hours they work. So, even if they are fired, the employer has to pay for the time spent in its employ. If the worker was pulling a Wally in Dilbert’s company, and working harder on avoiding work than actually doing any work, the employer still has to pay for those hours, and deals with the lack of productivity by firing the “Wally.”
Things get more complicated for other types of compensation. Some people are paid entirely or in large part by commission; others get a significant portion of their annual compensation by bonus. What rights does the departing employee have to commissions for sales brought in before he left? What right does the employee leaving in November have to her year-end bonus, if her numbers were stellar until she was laid off or quit?
The best way to deal with these questions is in advance, with a contract. Highly compensated, gifted salespeople are more likely than other non-union workers to have contracts. The end of the relationship should be addressed in the employment agreement. Unless the employee leaves only because the company goes defunct, there will be some work in progress that may merit commission or partial compensation.
Without a clear provision in the employment contract, the employee should look to the commission structure and any policies that have been written about it. Fortunately, some of the more draconian policies are unenforceable under Maryland law. Consider, for example, a policy that states “no commission is payable unless the employee is currently employed on the date of payment of the commission.” The Maryland Court of Appeals rejected this policy in the case of a salesperson who had performed all of the tasks necessary to earn the commission, other than being present on the date of the payment to him. If the deal has been struck, delivery made, and the client paid the bill, the salesperson has earned that commission. In a structure like this, there will always be some uncompensated work, but when there is nothing left for the sales force to do, the whole commission should be paid. On the other hand, if the salesperson has done only a part of the work to conclude the sale, and someone else must step in to finalize the deal, he can legally be denied the commission.
Questions about bonuses can be murkier. One question is whether anyone should be paid a year-end or Christmas bonus if the worker is no longer employed; another is whether the amount of the bonus can be determined. These questions are related, and usually come down to this: how much of the bonus is based on objective numerical criteria? A court cannot enforce a deal if it has to guess how much a worker’s bonus should have been.
Often, bonuses are paid based on a handful of factors, including the company’s productivity and the worker’s specific goals. Some bonus plans allot a bonus pool to a department, and the manager has the discretion to dole out the bonus among the department members. When an element of subjectivity is allowed to define the amount of the bonus, the unhappy worker cannot mount a claim (unless there is proof that the subjective factor is an illegal one, such as the recipients’ race).
Other bonus plans are almost completely subjective. These may weigh the employee’s attitude and contribution to team spirit, for example. Moreover, they may be intended not just to reward past performance, but to provide an incentive to stay. The amount of these types of bonuses cannot be figured out until they are paid.
On the other hand, if a bonus is based solely on the employee’s performance, then an employee who reached her goals in eleven months should not be deprived of the bonus. This is akin to the commission structure, though it’s paid not on one deal but the year’s effort.
If an employer withholds bonuses or commissions without a genuine dispute about whether it has been earned, the employee is entitled to get attorney’s fees for the enforcement action, and can request the court to double or triple the amount owed, under the Maryland Wage Payment and Collection Act.
Bonus or no, enjoy your end of year holidays.
Posted by marykeating on November 20, 2009 under Federal wage and hour law, Maryland wage law |
As previously mentioned here, Maryland’s Workplace Fraud Act imposes new penalties on employers who misclassify employees as independent contractors. At a talk before the Maryland State Bar Association’s Labor and Employment Section’s annual meeting recently, representatives from the state’s Department of Labor, Licensing and Regulation explained the Department’s focus on the landscaping and construction industries. Because studies had indicated that these industries were particularly likely to misclassify employees, the new Maryland law gave additional teeth to the Department in pursuing employers found to engage in a willful pattern of classifying employees as independent contractors. The harm to employees include the lack of worker’s compensation protection, the lack of unemployment benefits, the burden of the self-employment tax on employees, and the inapplicability of anti-discrimination laws. According to the State, more investigators are on the job. Employers should expect more audits of their workforce, as well as site visits.
The federal Department of Labor recently made a similar pronouncement. Yesterday, Secretary of Labor Hilda Solis stated:
“There is no excuse for employers who disregard federal labor standards – especially those that are designed to protect the most vulnerable in the workplace. The failure to comply with these basic labor standards means that workers are not receiving the money they have earned. It is both an economic issue and a fairness issue. America’s workers should rest assured that protecting worker rights is a top priority at the Department of Labor. To make good on that promise, I have hired an additional 250 new wage and hour investigators, a staff increase of more than one third, to ensure that we promptly respond to complaints and can undertake more targeted enforcement.”
Both federal and state laws permit an employee to obtain additional damages from an employer who willfully withholds wages or misclassifies an employee. Employers now need to watch employees and the government watching their practices.
