LegalMatch: Employment Law

The Fair Labor Standards Act: Keeping You Mostly Out Of The Breadline Since 1938

2010-07-21T14:00:03-07:00

With all the divisive controversy around Arizona’s new immigration law still running rampant across America’s collective conscience, it’s no surprise that conversations about the topic often turn to the ever-present high unemployment rate. The two issues seem to go hand-in-hand, like peanut butter and jelly, bacon and eggs, or milk and Pepsi. The primary reason, it seems, for this phenomenon is the belief that illegal immigrants steal jobs from hard-working employable Americans. Though the truth is that the jobs they’re hired for aren’t necessarily of the highest caliber, as most Americans likely aren’t clamoring to pick corn for a dollar an hour. The other major disadvantage illegal immigrants don’t receive is protection under the Fair Labor Standards Act.

Passed in 1938, the FLSA established a national minimum wage as well as guaranteed overtime pay for all American employees.

The FLSA passage into law was a major victory for American workers everywhere. However the most ironic part is that despite the hard-fought battle to turn the bill into law, many Americans today are unfamiliar with the protections it provides to employees.

Therefore, being the conscientious wonderful guy that I am, I’ve taken the time to explain these two major FLSA functions, as well as how the FLSA can punish employers who violate it:

· Overtime: Everyone knows the concept of time and a half, but I’m certain a significantly smaller percentage of those people are aware that the FLSA was what originated it. Simply put, federal law requires all employees who work more than 40 hours a week to be paid 1.5 times their standard wage for every hour worked over 40 hours. For example, if you’re wage is $20 an hour, your overtime pay would $30 an hour (20 x 1.5 = 30).

· Overtime Violation: If an employer refuses to pay their workers overtime, then they are in violation of FLSA’s overtime provision and can be subject to both criminal and civil lawsuits. Criminal penalties can consist of both fines up to $10,000 and imprisonment up to 6 months, as well as court orders to comply with the FLSA and to also pay back overtime wages. Civil lawsuits filed by harmed employees are limited to recovery of back wages and liquidated damages (meaning a set amount of additional money to be paid to the employee for violating the FLSA in the first place). There are exceptions to this rule. Salaried workers, typically categorized as white collar employees, aren’t required to be paid overtime regardless of the number of hours they work. This is because they receive a salary which is paid irrespective to their total work. Salaries under the FLSA are required to have overtime already factored into an employee’s annual pay. Also government workers have specific laws that determine their overtime pay regulation which can vary from job to job.

· Minimum Wage: Again, this is a concept many people are familiar with, but probably less know that the FLSA created it. It can seem crazy now, but prior to 1938 there were no laws in place at a national level which required workers be paid a minimum amount of money for their work. Some states had their own minimum wage laws, but the amounts set varied wildly from state to state. The FLSA changed all of this by requiring every employer regardless of the state they lived in to pay their employees minimum amount of money per hour. Currently that amount is at least $7.25 an hour. The best part is that under the FLSA, states still had the right to adjust the minimum hourly wage for their state, but could only adjust it upward. So it’s either set wages at $7.25 or set it for more.

· Minimum Wage Violation: The civil and criminal penalties for minimum wage violators are the same as those for overtime violators. The differences here are regarding the minimum wage exceptions. Workers who receive tips from their jobs can be paid less than minimum wage as long as the wage plus tips equal to at least $5.15 an hour. Why is that amount less than $7.25? Who knows? Perhaps it’s because people believe waiters can usually make more than minimum wage with tips. Regardless, it’s just another reason why tipping should be banned (please no hate mail; it’s just what I believe). Also trainees aren’t required to be paid minimum wage either as long employer follows certain FLSA guidelines.

However, from a legal perspective, the most important aspect of the FLSA is that it places the burden of proof on those filing the lawsuits. This means plaintiffs who wish to sue their employers for violating FLSA regulations are responsible for convincing the court or jury that their employer actually did something wrong. It’s probably for this reason why the latest LegalMatch statistics have shown an uptick in the amount of clients seeking employment law specialists. That, and you know, probably all the xenophobia, too. But maybe I’m just over-thinking it. . .

By: Andrew Dat

New York Bill Requires Domestic Employees to be Treated like Actual Employees

2010-06-10T12:17:23-07:00

New York is home to a huge number of wealthy working professionals. Many of these families and individuals have children. Of course, if you work 65-hour weeks at Big Fancy Law Firm™, you don’t really have much time to raise your kids. That’s where nannies come in.

More and more families consist of two working parents. There’s absolutely nothing wrong with this, and for many families, it’s an economic necessity. This means that many parents have to hire a nanny to take care of their children while they’re at work. These individuals operate as an unseen workforce and economy, where there is almost no regulation or workplace protection.

It looks like this is about to change in New York state, at least on paper. The State Senate just passed a law which explicitly requires that all domestic employees be given the same benefits that employers in any other industry are required to provide, under state law. This includes paying them the minimum wage, providing sick days, overtime pay, paid vacation, and 2 weeks’ notice before terminating employment (or, alternatively, termination pay).

The protections in this law, which the governor of New York is expected to sign, would apply regardless of an employee’s immigration status. If you’re at all concerned about the plight of domestic workers, this bill sounds pretty good, on its face.

Many bloggers, while generally grating the bill’s good intentions, point out some pretty serious practical problems. For example, most commentators don’t have a problem with the fact that the law will seek to protect workers who are not in the country legally. They ask, however, how such provisions will be enforced. For instance, it’s not clear how many nannies, especially illegal immigrants, will report violations of this law, for fear of retaliation (being reported to immigration authorities, for example). This fact might encourage people to hire illegal immigrants to work as nannies over people who are in the U.S. legally, since illegal immigrants will be so much less likely to report violations. Of course, it could also be argued that, by applying all the same workplace rules to illegal immigrants, there is no incentive to hire them instead of citizens or legal immigrants.

Furthermore, there are concerns that this might make life much more difficult for working families, while doing very little to help domestic employees.

Nobody is denying that these issues make enforcement of the law problematic, but some lawmakers opposed to the measure have taken the rhetoric a step further, resorting to outright falsehoods. One lawmaker argues that the 2-week-notice provision might deter parents from immediately firing a nanny who they suspect of child abuse. Leaving alone the fact that any sane parent would probably not care what the law says in a situation like this, the new law specifically addresses this possibility. The notice provision doesn’t apply in cases of suspected abuse.

Also, perhaps to alleviate concerns that this law would destroy the market for casual domestic employees, like babysitters, this law only applies to people for whom working as a nanny is their primary source of income.

As mentioned earlier, these provisions are pretty reasonable on their face. There is no getting around the problem of enforcing them, however. Indeed, according to recent LegalMatch data, hardly any workers who have reported wage, hour, or overtime violations have been in the domestic service industry, with in-home healthcare workers being a limited exception. None of the people who reported wage and hour problems anywhere in the U.S., in the last 12 weeks, appeared to be domestic childcare workers.

There are a few possible explanations for this.

First of all, it’s possible that the bill’s detractors are correct: domestic workers simply don’t report illegal conduct by their employers, because they’re illegal immigrants afraid of being found out, or any number of other possible reasons (fear of retaliation is a big one, as a significant number of nannies report verbal and physical abuse by their employers). This could serve as an illustration that laws like this, no matter their intentions, are futile.

Of course, the law’s supporters could just as easily argue that these figures demonstrate the need for the protections this law will afford. After all, they might say, these “violations” aren’t being reported, because, legally, there’s nothing to report: these workers have almost none of the legal rights that other employees take for granted, so even if they are being exploited, there’s little the law can do for them.

Obviously, based on the limited data available, it’s impossible to say which side is correct.

A few things are certain. First, we know that there’s a problem, especially in very large cities, as domestic workers are being exploited by their employers simply because it’s easy to do. We also know that some workplace protections, similar to those enjoyed by most other employees, are necessary for domestic workers. However, it also appears plainly obvious that there’s no perfect solution to this problem.

Perhaps this law will prove to be an important step in the right direction. However, changes like this cannot be made in a vacuum if we expect them to be successful. For example, immigration reform is necessary if the effects of this law are not to be negated by the fact that many illegal immigrants will not report violations. Obviously, I don’t know exactly what these changes would entail, but a general policy geared towards making it easier to enter the U.S. legally would be a very good start.

By: Rusty Shackleford

How Old Is Too Old To Work?

2010-06-02T10:07:53-07:00

At 25, I am already thinking about retirement...is that bad? But seriously though, I look at my grandparents and they have it made—they do whatever they want whenever! They recently suggested I meet them for breakfast at 2pm, a time that I am well past my second meal and third snack of the day. As is common, my grandfather retired at the age of 65 and then worked a few days a month until he was 70 or so.

But times are changing and so are retirement ages. The average retirement age in America is around 62 - this figure changes with the job market, life expectancy, and retirement trends. The average retirement age is also affected by race, gender, job sector, and geography.

A recent article in the California Bar Journal noted how a growing and graying lawyer population is changing the law firm retirement dynamics. With over 35% of the California lawyer population over the age of 55, firms and individuals are being forced to confront the best way to handle retirement. Perhaps the biggest problem is the demanding work pace for older lawyers. The article noted that at larger law firms, older lawyers are still expected to reach up to 2,000 billable hours - a figure that can affect the work or the health of the aging attorney. The cause of this pressure? One commentator felt that global competitiveness, mergers, and the fierce competition among law firms is to blame for the pressure on older associates to perform at the same level as their fellow attorneys 30+ years younger than them. Essentially, lawyers are left with the choice of maintaining an almost impossible work-pace or retiring before they feel they are ready.

The biggest drama, however does not have to do with the demand on older attorneys, but rather when firms are unwavering in their imposition of a mandatory retirement age. The New York-based law firm of Mendes and Mount is learning what happens when they force retirement on unwilling partners. Rather than institute an age discrimination lawsuit, seven partners and twenty-four attorneys left the firm when it would not adjust the mandatory retirement age of 65. The attorneys plan on forming their own firm specializing in aviation law and taking a large chunk of their former firms business with them. The firm stated that they have a mandatory retirement policy in order to ensure that younger partners don’t face a “logjam” as they climb through the ranks. This sure served to clear up any congestion!

There are other ways that companies can force an older employee to retire. Known as constructive discharge, it occurs when a situation gives the older employee no other option but to quit. Courts in these cases look to factors such as: demotion or salary reduction, decrease in job responsibilities, reassignment to menial tasks, reassignment to a younger supervisor, consistent harassment humiliation calculated to get the employee to quit, early retirement offers or continued employment on less favorable terms. When courts find this type of work climate, this can mean major lawsuits for the companies that have treated their older employees poorly.

I think retirements are highly personal and need to be handled on an individual rather than systematic basis. People are different and to force retirements when individuals want to continue to contribute seems to be a horrible way to treat an employee. The old adage: respect your elders, comes to mind when dealing with retirement—there should be a tremendous amount of respect for retiring employees, and forced retirements and constructive discharges will hopefully be limited.

By: Violet Petran

Dissecting The "Just Cause" Requirement For Unemployment Benefits

2010-05-20T14:52:39-07:00

In the midst of these hard economic times, it is no surprise that there has been an increase in unemployment benefit applications nationwide. A while ago I wrote about unemployment rates slowly going down before the holiday season. A welcome sign, no doubt, but the problem nevertheless persists for those individuals out of work and not able to find another job.

The basic concept behind unemployment benefits is to provide some much needed funds to individuals who are out of work, at no fault of their own, until they can find another job. According to figures released by the U.S. Department of Labor, only 37% of workers who lose their jobs collect unemployment benefits. But if an employee (or I should say former employee) was fired for "just cause" or voluntarily quit, then they are not eligible for benefits.

I love law and its vague terms.

A recent article helps to shed some light on what is considered a "just cause" firing:

1.) Giving false information on a job application

2.) Knowingly breaking an employer's rules

3.) Unexcused Absences or Tardiness

4.) Purposefully Damaging The Employers Property

5.) Insubordination- refusing to obey employers instructions

6.) Reporting to work under the influence of drugs and/or alcohol or consuming drugs or alcohol on the job.

7.) Conduct that threatens the safety of others

8.) Conviction and imprisonment for a serious crime

9.) Breach of a duty you owed to your employer

10.) If you quit voluntarily

Some of these seems more self explanatory than other--its always a bad idea to do drugs or being drunk on the job.

However, there is still an element of vagueness in what constitutes “just cause” and because of that, there is an appeal process. In a recent study conducted by LegalMatch, there are a lot of people interested in the appeals process, which essentially allows the claimant to appeal an unfavorable decision within a certain amount of time.

I was surprised to read that less than half of workers that lose their job collect unemployment. It may be because they were fired for just cause, but it may also be because the requirements for unemployment can seem daunting and confusing to the layperson. Losing your job and not being able to find work can be a very stressful situation and I think the lesson to be learned here is to be a good employee while you are working in order to ensure that there are government benefits available to you in case of an emergency.

By: Violet Petran

The Healthcare Reform Bill Has Passed: Let the Lawsuits Begin

2010-04-26T16:31:24-07:00

As predicted, states and individuals have initiated legal challenges to the new healthcare reform law, seemingly before the ink on the president’s signature had even dried.

I won’t repeat the arguments for the position that the law is unconstitutional. In the linked blog post, I cover the basics of many of the legal issues involved, and the arguments and counter-arguments concerning the constitutionality of the healthcare reform law. The issue has been discussed extensively elsewhere.

But few of the other blogs discussed an interesting new wrinkle in the opposition of state governments to the law. Many states have already passed or proposed laws which seek to limit the scope of the new law’s impact in the respective states. This is almost certainly going to result in legal showdowns between the state and federal governments addressing issues of federalism, supremacy of federal law, and states’ rights.

Several state attorneys general have filed lawsuits alleging that the new law is unconstitutional. This was expected, as these attorneys made their intentions very clear, before the bill was passed and signed into law.

What is a bit surprising, however, is the nature of some of the arguments that the states are making. In addition to the standard arguments that Congress lacks the constitutional authority to pass such a law (particularly the “individual mandate,” which some argue is actually just a tax incentive), that it gives the federal government power that is traditionally reserved to the states, and that it imposes an unconstitutional tax, there is one that came way out of left field: an argument that it violates the constitutional requirement that the federal government guarantee that the states have a “republican form of government.”
This provision of the constitution is interesting in its vagueness. The constitution provides absolutely no guidance as to what constitutes a “republican form of government.” It seems clear that states would not be allowed to establish monarchies or other authoritarian regimes, but where to draw the line is not clear.

Furthermore, the only time the issue has been before the Supreme Court, during Rhode Island’s Dorr Rebellion in the 1840s, the Court declined to interfere, essentially holding that this is a “nonjusticiable” (incapable of being examined by the courts) protection.

Another major issue with these lawsuits filed by states is that they might not have standing to bring most of the claims that they are filing. In order to have standing, and therefore be able to file suit, a party must have suffered some actual legal harm that the courts can address. Considering that the first provisions of the law don’t take effect for about six months, and the “individual mandate” doesn’t take effect for four years, it’s unlikely that anybody, let alone state governments, can claim that they’ve been injured by the law.

And even once these provisions take effect, individuals might have standing to challenge the mandate (though their actual chances of success in these challenges is another matter), it seems unlikely that state governments would be able to argue that they’ve suffered any injury as a result of the individual mandate, and therefore have standing to challenge it.

So, what do we make of all this? Is the new law unconstitutional? My gut says that almost all of the provisions of the law will be upheld by the Supreme Court, when (not if) the challenges get to that point. But, of course, it’s impossible to predict what the Supreme Court will do with total certainty.

Whatever happens, it’s going to be an interesting ride.

By: Rusty Shackleford