Articles Posted in Minimum Wage Reforms

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By Leah Kessler and Crismelly Caso

Martin Luther King Jr. Day (or “MLK Day”) is a federal holiday observed on the third Monday of January each year to celebrate the life and achievements of Martin Luther King Jr., an influential American civil rights leader.

Dr. King’s sustained political activism has influenced and improved our country in countless ways, including the passage of the Civil Rights Act of 1964 (“CRA”), which in turn created the Equal Employment Opportunity Commission (“EEOC”)—a federal agency that administers and enforces civil rights laws against workplace discrimination.  As a result, in 2017, 84,254 individuals filed charges with the EEOC, seeking legal recourse against employers subjecting them to work environments in which they were demeaned and dehumanized.  He was closely involved in the passage of the National Labor Relations Act—which established the right of all workers to form unions and bargain collectively with their employers regarding their working conditions and wages.

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Owen Laird, Esq.

Today is Opening Day for the 2018 Major League Baseball season. Spring training is over, and while the Major Leaguers head back to their stadiums, the Minor League players who didn’t make the cut are headed back to work as well. Those Minor Leaguers might be a little worse off this year because of the sweeping $1.3 trillion budget bill that President Trump signed last week. One of the more nuanced aspects of the bill is an amendment to the Fair Labor Standards Act (“FLSA”) known as the “Save America’s Pastime Act.” This amendment aims to “save” baseball by suppressing the wages that minor league teams pay to their players.

While major league baseball players enjoy a minimum annual salary—which amounts to hundreds of thousands of dollars per year, with top players earning tens of millions of dollars a year—minor league baseball players are a different story. Not only do minor league players significantly outnumber major league players, but, unlike major league players, minor leaguers are not unionized. As a result, baseball’s minor leagues are populated with thousands of players, many of whom are barely squeaking by.

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Leah Kessler

On Tuesday, December 5, the Department of Labor (DOL) sent out a Notice of Proposed Rule Making (NPRM) regarding tip regulations under the Fair Labor Standards Act (FLSA). The DOL seeks to rescind an Obama-era regulation that prohibited restaurants and other service-industry employers, specifically those who pay their employees minimum wage and do not take a tip credit, from enforcing a tip-sharing system between tipped and non-tipped employees.

While tips are considered the sole property of the tipped employee under the FLSA, tip-pooling (sharing tips equally among staff) is allowed. There are, however, specific requirements for valid tip-pooling arrangements. When an employer takes a tip credit to satisfy a portion of the minimum wage, the tip pool can only include workers who “customarily and regularly receive tips”, prohibiting the sharing of tips with “back of the house” employees (such as cooks and dishwashers), who do not usually earn tips. Section §203(m) of the FLSA outlines the rules and regulations for tip credits, permitting employers to take a tip credit toward the minimum wage obligation for tipped employees equal to the difference between the required cash wage and the minimum wage. For example, the federal minimum wage is currently set at $7.25 per hour. Under section § 203(m) of the FLSA, an employer can pay his or her tipped employee a minimum cash wage of $2.13 per hour and claim a maximum credit of $5.12 per hour. The employer is obligated to pay the employee if the tips do not amount to the mandatory feral minimum wage. (These are the federal rules for tip credits. Fortunately, the tip credit regulations in New York are better for employees: The minimum cash wage is higher and the maximum tip credit allowed is lower.)

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By Owen H. Laird, Esq.

As you may know, many municipalities and local governments have enacted minimum wage increases over the past few years as part of a “fight for $15” campaign. New York City, Los Angeles, and Seattle are a few of the cities that are implementing increases in the minimum wage, ultimately raising it to $15 an hour for most workers. Illinois is in the process of passing a wage bill that would increase the minimum wage statewide.  Proponents of these bills and laws generally take the position that raising the minimum wage will result in higher wages and better working conditions for employees. Two recent studies attempted to assess the economic effects of Seattle’s wage laws and came to strikingly different conclusions.

In January 2016, Seattle increased its minimum wage for large companies to $13 per hour, as part of a series of increases that would ultimately move the minimum wage in the city from $9 per hour in 2014 to $15 in the future.  Two studies—one by UC Berkeley’s Institute for Research on Labor and Employment, the other by economists from the University of Washington—reached opposite conclusions on the impact the increases have had on workers in Seattle, with the Berkeley study finding that workers earned more money and the University of Washington study finding that they earned less.

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Owen H. Laird, Esq.

Protesters across the United States engaged in coordinated demonstrations yesterday, demanding an increase in the minimum wage to $15 an hour. Activists took to the streets in New York City, Los Angeles, Boston, Chicago, and many other U.S. cities on the four-year anniversary of the launch of the “Fight for 15” campaign, initially begun by the Service Employees International Union in 2012.

The efforts of the Fight for 15 movement have resulted in increases in the minimum wage in various municipalities for some workers. For example, in New York, where the Fight for 15 campaign began, the New York Department of Labor has implemented a series of annual increases to raise the minimum wage. These increases mean that fast food workers in New York City will earn a minimum wage of $15 an hour by 2019, and fast food workers across New York State will earn $15 an hour by 2021.

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Yarelyn Mena and Edgar M. Rivera, Esq.

In a 2014 case, Martin v. The United States, the United States Court of Federal Claims held that an employer’s late payment of wages violates the Fair Labor Standards Act (“FLSA”) and may trigger liquidated ”double payment” damages. The case arose out of the 2013 government shutdown (October 1, 2013 to October 16, 2013) which resulted in the untimely payment of wages to government workers.

Towards the end of 2013, Congress failed to issue funds for government workers, forcing the federal government into a partial shutdown. The shutdown took place in the first two weeks of October 2013, in the middle of a pay period, which resulted in plaintiffs unpaid government employees being paid only for work from September 22 to September 30, and not the first five days in October. Two weeks after their scheduled payday the plaintiffs received pay for those five days. They argued that the federal government’s failure to pay them for hours worked resulted in (i) underpayment that constituted a minimum wage violation, (ii) failure to pay non-exempt employees for overtime hours worked, and (iii) failure to pay even exempt employees for overtime hours worked.

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Lucie Rivière

On November 10, 2015, Governor Andrew M. Cuomo announced that he would raise the minimum wage to $15 for all employees of the State of New York, making New York the first state to enact a $15 public sector minimum wage.

In April 2015, hundreds of fast-food workers and labor allies protested in the streets, demanding wage increases, the organizers behind the fast-food strikes explicitly called for an industry wage of $15 an hour in New York City. Following these events, Governor Cuomo worked to increase the minimum wage for not only fast food workers but also for all state workers. In a New York Times op-ed published on May 6, 2015, Governor Cuomo complained “nowhere is the income gap more extreme and obnoxious than in the fast-food industry. The average fast-food C.E.O. made $23.8 million in 2013. Meanwhile, entry-level food-service workers in New York State earn, on average, $16,920 per year, which at a 40-hour a week amounts $8.50 an hour.”

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Yarelyn Mena

On April 10, 2014, New York Attorney General Eric Schneiderman issued warning letters to thirteen New York retail chains, including Gap Inc. and Target Corp., notifying each that their “on-call” scheduling practices may violate New York law. On-call scheduling, a phenomenon chiefly in the retail industry, allows employers to cancel employees’ scheduled shifts and demand they pick up unscheduled shifts with little notice.

New York law requires employees who report to work before their scheduled shift, “be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage.” On-call scheduling lets employers quickly staff their stores on busy days, and send employees home early on slow days, thus, saving money on payroll at the expense of employee convenience. Employers often send employees home on slow days without proper compensation. On-call scheduling is not only a detriment to employee’s salaries, but also to their well-being; employees, especially those who must plan child care or other family accommodations around their work shifts, are greatly inconvenienced by erratic scheduling.

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Yarelyn Mena and Owen H. Laird, Esq.

As President Barack Obama’s tenure nears an end, he and his administration have been pushing for far-reaching changes in employment laws that may benefit thousands of workers across the country.

At the beginning of his presidency, many workers—both Democrats and Republicans—did not support the President because he took and supported actions that appeared to be against workers’ interests.  For example, the President moved slowly to fill important employment agency positions, such as the National Labor Relations Board (NLRB), which resulted in the delay of Democratic appointees and caused proceedings at the NLRB to come to a halt.  Labor unions also were unhappy that the President failed to side with union members when legislation threatened to allow employers to hold secret ballot elections concerning leadership voting methods.

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By Owen H. Laird

Earlier this month, the California Labor Commissioner ruled that an Uber driver is not an independent contractor but an employee. Uber—a popular driver sourcing company formally known as Uber Technologies Inc.—classifies its drivers as independent contractors and not employees, allowing Uber to avoid reimbursing its drivers for costs and expenses, compensating its drivers for overtime worked, and paying a variety of payroll and employment taxes.

To determine if a worker is an employer or independent contractor, California law considers several factors, including the control the employer has over its workers, the degree to which the work is part of the employer’s regular business, and the kind and degree of specialization the occupation requires. The Commissioner’s analysis of the relationship between Uber and its drivers found that Uber controlled the operation as a whole, vetted drivers, and maintained the necessary technology to conduct the business. The Commission also found that the drivers were an integral part of the Uber’s business and their work did not require specialized skills. Those facts supported the conclusion that the drivers were employees, not independent contractors.

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