Court Case on CA’s Day of Rest…Finally Rested

California has long had a day of rest requirement.  In fact it has existed long before overtime and minimum wage. It guarantees an employee “one day’s rest therefrom in seven”.  But  which employees and what exactly is one day in seven?  This was really never litigated before the current case of Mendoza v. Nordstrom in which the ruling was just handed down on May 8th.  Rather than my trying to explain the entire court case in a blog, I will, instead, urge you to read the recap of the case as presented by Sheppart Mullin Richter & Hampton’s Brian S. Fong for the Mondaq News Update Service. It is an in-depth look at the ruling and the impact on employers.

 

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EPI Report Shows Employers Steal Up to $8 Billion From Employees’ Wages Annually

A report released on May 10, 2017 by the Economic Policy Institute (EPI) assesses the prevalence and magnitude of one form of wage theft—minimum wage violations. Minimum wage violations is defined in the report as paying a worker an effective hourly rate that is below the legal or binding minimum wage, either state or federal law. The report looked at the 10 most populous U.S. states: California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania, and Texas. These states were chosen to limit the focus of the report so EPI could carefully account for each state’s individual minimum wage policies and state-specific exemptions to wage and hour laws. Two of the states chosen, California and New York, actually have anti-wage theft laws on the books. The data for these states provides adequate ample sizes and the total workforce in these states accounts for more than half of the entire U.S. workforce. The results of the study are a bit alarming even if you take into account that the measuring of wage theft is challenging and suitable public data sources are limited. The key findings of the report are that:

  • In the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their state—approximately 17 percent of the eligible low-wage workforce.
  • The total underpayment of wages to these workers amounts to over $8 billion annually. If the findings for these states are representative for the rest of the country, they suggest that the total wages stolen from workers due to minimum wage violations exceeds $15 billion each year.
  • Workers suffering minimum wage violations are underpaid an average of $64 per week, nearly one-quarter of their weekly earnings. This means that a victim who works year-round is losing, on average, $3,300 per year and receiving only $10,500 in annual wages.
  • Young workers, women, people of color, and immigrant workers are more likely than other workers to report being paid less than the minimum wage, but this is primarily because they are also more likely than other workers to be in low-wage jobs. In general, low-wage workers experience minimum wage violations at high rates across demographic categories. In fact, the majority of workers with reported wages below the minimum wage are over 25 and are native-born U.S. citizens, nearly half are white, more than a quarter have children, and just over half work full time.
  • In the 10 most populous states, workers are most likely to be paid less than the minimum wage in Florida (7.3 percent), Ohio (5.5 percent), and New York (5.0 percent). However, the severity of underpayment is the worst in Pennsylvania and Texas, where the average victim of a minimum wage violation is cheated out of over 30 percent of earned pay.
  • The poverty rate among workers paid less than the minimum wage in these 10 states is over 21 percent—three times the poverty rate for minimum-wage-eligible workers overall. Assuming no change in work hours, if these workers were paid the full wages to which they are entitled, less than 15 percent would be in poverty.

The report gives a full explanation of the background and previous research into the problems.

EPI report

 

Comma Placement Matters, Especially in Wage Hour Law

As many of us who use Facebook know, the grammar police are constantly posting memes about the proper use of commas. Recently the placing of a comma came into play which cause one employer to have to pay back wages for overtime. The U.S. Court of Appeals for the First Circuit has overturned a federal district court opinion and ruled that dairy company delivery drivers are eligible to receive overtime under Maine’s overtime laws. At issue was Maine Rev. State. Ann. §664(3)(F), which provides an exemption from overtime for those involved in the “canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution” of perishable food. The drivers did not dispute that they handled perishable foods, but said that they do not engage in “packing” them, and therefore are eligible to receive overtime. The employer argued that the above provision actually refers to two distinct exempt activities (“packing for shipment,” and ”distribution”), and therefore the exemption from overtime applies to the drivers. The appellate court sided with the drivers. It said that the exemption would have applied to the drivers if the statute had read “packing for shipment, or distribution” rather than “packing for shipment or distribution.” Since the drivers did not pack items for either shipment or distribution, their activities did not come under the statutory exemption [O’Connor v. Oakhurst Dairy, CA1, Dkt. No. 16-1901, 3/13/17].

So watch out for where the commas are placed if you want to avoid penalties!

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State vs. Cities: The Wage Hour Fight Continues

Localities such as cities or counties have been enacting their own wage and hour requirements for quite a few years now.  Dozens of cities in California and New Jersey have their own sick leave laws as well as higher than state minimum wages.  New Mexico has local minimum wages as does Washington.  But it seems the state legislators are starting to fight back.  With the assistance of groups such as the American Legislative Exchange Council (ALEC) model bills (draft legislation that legislators may customize and introduce) have passed in several states.  The latest states to pass such legislation are Arkansas and Iowa.  These bill basically forbid the local governments from passing any type of law relating to minimum wage, living minimum rates, employment leave or benefits, hiring practices or any condition of employment that is more generous than the federal or state law.  Whether cities will fight back in the courts, or if they even can, remains to be seen. Miami Beach recently tried to establish its own minimum wage despite Florida having passed its own version of the ALEC legislation.  The court struck down the Miami Beach ordinance. So the fight continues.  Payroll professionals need to monitor local minimum wage and sick leave ordinances to ensure compliance but remember these ordinances can be fleeting if the state has passed the ALEC-style legislation.

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School Employees & Overtime: The Latest Blog from Wage and Hour Insights

In addition to my own blog I like to make sure I follow other  well written and accurate blogs that discuss wage and hour law or other payroll related items.  The Wage & Hour Insights blog is one such blog.  I have shared several of them in the past months.  This time the blog addresses a unique situation but still one that is relevant to all payroll professionals.  Do school employees get overtime for occasional extra duty?  Why relevant to all payroll professionals?  Because though the law does give a limited exception to state and local government employers it does not to private sector employers.  So check out today’s blog from Bill Pokorny for government employees.  But also check out his previous blog on the subject for private sector employers. 

 

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In Case You Hadn’t Notice–It’s Election Time Again

The election is coming up fast.  What that means to most employees and employers is questions. Employees might ask themselves “when should I vote?”.  But they might ask their employers “can I have time off to vote?”. Allowing time off to vote is a company policy question in some cases, but other times it is a question of wage and hour law.  Does an employer have to give the employee time off to vote during working hours?  And if they do, is it paid time off?   There actually is no federal law on whether or not an employee must have time off to vote. It is left up to the states to decide.

Vote campaign

And each state has their own rules.  Some states give up to four hours, where other states don’t address the issue at all.  To assist payroll professionals on this topic I have put together a white paper on the voting time off requirements for the states.  The link is below.  The info was compiled through Thomson Reuters. It should prove helpful as it also give the citation to state law.  I have also listed the states that do not address this issue.  I hope you find it useful.

white-paper-time-off-to-vote-oct-2016

 

 

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The Overtime Battle Rages On!

The battle to stop the new overtime rules from taking effect has begun in earnest. 21 states, including Arizona, Kansas, Oklahoma, Nevada, Texas and Utah, and the U.S. Chamber of Commerce have filed a lawsuit in Texas challenging the Department of Labor’s (DOL) final overtime rules under the Tenth Amendment of the U.S. Constitution and the Administrative Procedures AFlag of Nevada (isolated)ct.   Nevada Attorney General Adam Paul Laxalt led the coalition of states filing the suit. According to the suit the final rule contradicts the statutory text of the exemption, as well as Congressional intent.  The suit also raises the specter of the federal executive depleting state budgets in an effort to impose its policy will on the states.

However the DOL has responded by issuing the following statement by Secretary Tom Perez:  “We are confident in the legality of all aspects of our final overtime rule. It is the result of perez2a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics. Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay. The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States. The crown jewel has lost its luster over the years: in 1975, 62 percent of full time salaried workers had overtime protections based on their pay; today, just 7 percent have those protections – meaning that too few people are getting the overtime that the Fair Labor Standards Act intended. I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”

Let’s see where the battle takes us by December 1!

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