Paycheck Fairness Act promotes Equal Pay for Women

The Obama administration is trying to pass the Paycheck Fairness Act.  The goal is to make it easier for woman to sue for equal pay.  Senior White House Advisor Valereie Jarrett says that woman currently earn 77 cents for every dollar men earn. 

The Ohio Employer's Blog has a nice summary of the key changes contemplated by the Paycheck Fairness Act.   Here they are:

1.  Modified defense. Paycheck Fairness would impede the ability of employers to defend against sex discrimination wage payment claims. An employer can currently defend against an Equal Pay Act claim by showing that the pay difference between men and women was caused by “any factor other than sex.” Paycheck Fairness would alter this standard by requiring employers to show “a bona fide factor other than sex, such as education, training, or experience,” that is not sex-based, but is job-related to the position and consistent with business necessity. Moreover, even if an employer makes this showing, the employee could still prevail by showing that the employer refused to adopt an alternative employment practice that would serve the same business purpose without producing the same wage differential.

2.  Enhanced damages. The current Equal Pay Act’s remedies include back pay and liquidated damages that are capped at the amount of the back pay. Paycheck Fairness would steepen the remedies for sex discrimination in wage payments by allowing for uncapped punitive and compensatory damages.

3.  Non-retaliation. Paycheck Fairness would prohibit an employer from retaliating an employee who inquired about, discussed or disclosed the wages of the employee or another employee, unless discussing wages is part of an employee’s essential job function. While the National Labor Relations Act already covers this conduct, Paycheck Fairness’s enhanced remedies are much more extensive than those available under the NLRA.

4.  Class actions. Paycheck Fairness would change sex discrimination wage payment class actions from “opt in” classes to “opt out” classes, making classes in these cases larger and easier for employees to join.

5.  Reporting. Paycheck Fairness would require the EEOC to issue regulations on the collection of pay information from employers. It would also require the Office of Federal Contract Compliance Programs to use its “full range of investigatory tools” for investigation, compliance, and enforcement.

If this law passes, it will certainly make it easier for woman to obtain equal pay but lets see what the law looks like when, and if, it is ever passed into law. 

Why More Employers Get Sued for Overtime Pay Violations

The Wage & Hour blog published by Fox Rothschild reports a sharp rise in overtime pay suits in 2010.   According to the post, overtime pay suits under the Fair Labor Standards Act rose 23% in the second quarter of 2010.

The author of the blog speculates that increase in overtime suits is the result of a conspiracy by plaintiffs lawyers to file more suits, greedy plaintiffs lawyers trying to get rich off of the fee shifting statutes, and the easy burden of proof under the FSLA.   But the author forgot to mention the biggest reason for these lawsuits is the fact that employers do not pay their employees overtime.   

The cause, in my view, is that is makes economic sense for employers not to pay overtime.   Overtime payments can be very expensive and the odds are that most employers will not get caught and even if they do get caught, they can pay later.   So it just makes sense to avoid paying overtime.   This is the real reason for the problem.  But this is nothing new  - this has been going on for decades. What is new is that more employers are now getting caught. 

More employers are getting busted for overtime pay violations because the Obama administration has made wage theft a priority.  The federal government now cares about this issue and it is now easier than ever to win these cases.   But again, the real reason for the suits is the fact that employers are just not paying overtime to their employees. 

Hospital Settles Overtime Pay Suit for 8.5 Million

A Boston based hospital group agreed to settle an overtime pay class action law suit for 8.5 million.   The hospital group was sued by former and current employees who claimed they were not paid for working through lunch and for extra time worked after the end of their shift.   The overtime class action suit alleged that the hospitals had a common practice of not paying its working staff overtime pay.

Non-exempt employees must be paid for the time that they work.   It is a simple concept but companies routinely fail to pay their employees for all of the time worked.   If employees work through lunch or stay late, they must receive overtime pay for these extra hours. 

Common Sense Prevails in Overtime Pay Case

The outcome of an overtime class action involving 2500 employees hinged on the meaning of a word:  salesperson.   The question before the court was simple - does an employee have to sell something in order to be deemed a salesperson?   

The case involved 2500 Novartis employees who sought overtime pay.  Novartis argued that the 2500 employees were not entitled to overtime pay because they were outside salespeople.   Under the Fairl Labor Standards Act, outside salespeople are not entitled to overtime pay.  

The court took a pratical approach and said that an employee cannot be considered an exempt outside salesperson unless they actually sell something.   Makes a lot of sense.   The 2500 employee were called "sales representatives" but a person's title means little in these cases.   After taking a look at what these employees did, the court found that the employees did not sell anything.  

The employees only visited doctors offices and entertained them in order to promote Novartis drugs with the hope that the doctors might prescribe Novartis drugs to their patients. Since there were laws that strictly prohibited the Novartis employeses from actually selling the drug, the court concluded that the Novartis employees were not salespeople.   Also the drugs were sold at drug stores and the employees had nothing to do with these sales.  An employee cannot be deemed an outside salesperson unless they actually sell something.       

New Employee Rights Law Pending in Congress

A new employee rights law was recently submitted to Congress by Senator Sherrod Brown from Ohio.  The Employee Misclassification Prevention Act is intended to protect workers who are misclassified as independent contractors.   It is estimated that tens of thousands of employers routinely misclassify their employees as independent contractors.  

Employees who are misclassified as independent contractors lose critical workplace protections and employee benefits such as overtime pay, minumum wage, unemployment insurance, health and saftey protections and workers compensation.  

The EMPA would reduce the number of misclassification violations by:

•    Ensuring that employers keep records that reflect the accurate status of each worker as an employee or non-employee and clarifying that employers violate the Fair Labor Standards Act when they misclassify workers.
•    Increasing penalties on employers who misclassify their employees and are found to have violated employees' overtime or minimum wage rights.
•    Requiring employers to notify workers of their classification as an employee or non-employee
•    Creating an "employee rights web site" to inform workers about their federal and state wage and hour rights.
•    Providing protections to workers who are discriminated against because they have sought to be accurately classified.

For more information on the EMPA, please the post by the Overtime Advisor

Obama Catches Overtime Pay Violators

Obama Catches Overtime Pay Violators

 

The Obama administration has vowed to protect the average worker.  The U.S. Department of Labor is pursing industries that have notoriously abused workers by not paying them minimum wages or overtime pay.  Here are a few of the companies that have been caught. 

 

Garment Company Caught and Punished

 

A garment company in Los Angeles, Laundry Room Clothing, Inc., was ordered to pay nearly $100,000 in back wages to 53 workers and the company was enjoined from shipping any goods that were made by workers who where deprived of overtime pay or minimum wages. 

 

Gas Station Workers Win in New Jersey

 

In another case, Raceway Petroleum, Inc., a New Jersey gas station operator with 700 employees, was ordered to pay $3.9 million in overtime pay and fines.  Some gas station workers put in more than 100 hours a week and were not paid overtime. 

 

Grocery Store Workers in New York City Recover Overtime Pay

 

A grocery store chain in Queens, New York abused workers by not paying them any wages in some cases, and not paying minimum wages or overtime pay.  A total of 38 workers recovered $288,000 in unpaid wages.   The DOL found that some employees who bagged customers food were not paid at all and instead had to rely on customer tips. 

 

High Tech and IT Workers are Entitled to Overtime Pay

IT and high tech workers are winning millions in overtime pay claims.  High tech companies have been illegally classifying many of its employees as exempt from overtime pay requirements.  There is an exemption from overtime pay that applies to computer and technology workers, but this exemption is narrow and is often applied too broadly by employers.  

Even salaried and highly paid IT and high tech workers are entitled to overtime pay.  Titles and payment methods are irrelevant.  What matters is the kind of work that is performed.   Here is a rough guide to help determine what IT and high tech workers are entitled to overtime pay.  An IT or high tech worker is probably entitled to overtime pay if:

- They perform routine maintenance of systems and applications

- They are required to follow company guidelines, procedures and protocols

- They are supervised and do not work independently

- They perform repetitive tasks

- They install application updates and configure system and program settings

But, if the employee works independently and is primarily engaged in creating or designing or researching new systems or programs, then they are not entitled to overtime pay.   IT and tech workers who create, design and research and exercise broad discretion in their work and are not under close company control are generally not entitled to overtime pay.   But the IT and tech workers who operate under close company control and perform routine maintenance, repair, training and troubleshooting are likely to be entitled to overtime pay.  

Overtime Pay in a Nutshell

Overtime pay is governed by federal and state law.  The federal law is called the Fair Labor Standards Act (FSLA).  These federal and state laws provide that employees should get overtime pay unless they fall into specific narrow exceptions.  Under these laws, an employee must be paid time-and-a-half (overtime) for each hour worked over 40 in a week.  This rule does not apply to someone who falls into one of the exemptions. 

 

California provides even more overtime pay protection.  If you work in California, you not only get time-and-a-half for each hour worked over 40 in a week, you also get 1.5 times your normal rate for each hour over 8 worked in a day, plus double time for each hour worked over 12 in a work day, an unpaid 30 minute meal break after 5 hours, and a 10-minute rest break every 4 hours.  Those are the basics of overtime pay.  The picture can get murky once you get into all of the exceptions to overtime pay. 

 

Generally, everyone is assumed to be entitled to the overtime pay rules described above.  But, companies are free classify their employees as exempt from these overtime laws if they fit into any of the narrow exemptions.   Companies often try to classify their employees as exempt because then they get more work out of their employees for less.   The problem is that many companies go to far and exempt many workers who really are entitled to overtime pay.  Employees can challenge their employers by filing a claim with the Department of Labor or by suing the company themselves.   

 

One of the more common tricks companies use is to misclassify an employee as exempt from overtime pay and pay the person a salary.   People generally assume that salaried employees are not entitled to overtime pay, but this is wrong.  Your title or pay formate (salary vs. hourly) makes no difference. If  you want to know if you are entitled to overtime pay you can call our law firm and we will tell you - it is fairly easy to make this determination in most cases. 

Interns and the Entertainment Business - Is it Slavery?

An internship program is meant to provide the intern with supervised training in a profession or occupation such as a medical student working in a hospital assisting and learning from experienced doctors. 

 

However, many companies, and especially those in the Entertainment field, have turned internship programs into free labor camps.  Instead of providing supervised training in a specific area, many entertainment companies require the interns to simply work for free doing dull menial tasks such as entering names into a database.

 

College students eager for a chance to work in entertainment are taken advantage of and turned into free labor.   The "internships" are usually not educational or training oriented and instead amount to drudgery with no pay.

 

Certain radio stations owned by Cumulus Radio, for example, use interns to perform routine clerical tasks for free or to serve as free roadies who travel to locations and set up stages or equipment for promotions.   They also work inside the stations doing routine administrative or marketing support work like entering the names of contestants into a computer program.   They do all of this for free.  

 

These radio interns are not being trained or educated, instead they are being exploited for free labor.   They just do the work that another paid worker could do and there is often no educational component.  Importantly, these internship programs do not benefit the intern, instead the intern is exploited and the company benefits from free labor.     

 

In the past, the U.S. Department of Labor turned a blind eye to it, but now the law has changed and interns can no longer be forced to work for free.  Last month, the U.S. Department of Labor issued Fact Sheet #17: Internship Programs Under the Fair Labor Standards Act.   This document sets for the new rules for internship programs.  Fact Sheet 17 states that most all interns at private companies will be deemed employees who are entitled to wages and overtime pay.  This means that there is a presumption that the interns are really employees who must be paid for their work. 

 

In order for a company internship to be deemed a bona fide internship program, the following six criteria will be applied:

 

1.     The Internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2.     The internship experience is for the benefit of the intern;

3.     The intern does not displace regular employees, but works under the close supervision of existing staff;

4.     The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may actually be impeded;

5.     The intern is not necessarily entitled to a job at the conclusion of the internship; and

6.     The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

 

If all six of the above criteria are met, the intern will not be considered an employee who is entitled to wages and overtime pay.  Under these rules, I would bet that most internship programs in the entertainment industry are suspect.  The ones that I have heard about in the radio industry fail miserably and the interns are really just employees who must be paid wages and overtime pay.    

 

 

Are Interns Abused: Their Right to Minumum Wage and Overtime Pay

Lately, there has been a crack down on internship abuse by the Federal Department of Labor and many states such as California, New York and Oregon.  The recession has created a unique climate for abuse because many companies need to lower costs and there are now thousands of eager young college students clamoring for a chance to get real world work experience.   As a result, many companies recruit interns with the prospect of educational and career experience but what the interns get instead is forced drudgery and no pay.   See the New York Times article on this subject.  

 

Many corporate internships are unpaid - the interns believe they will get a genuine resume building experience but instead wind up packing boxes or shinning door knobs.  Normally, employees must be paid minimum wage and overtime pay.   But the free interns are not protected - they work for free. 

Proponents of the free internship programs claim that it is a great opportunity for students and employers alike.   But others believe that the unpaid internships are grossly unfair because only well heeled students can afford to work for free and the free programs are rife with abuse.   See The Harvard Political Review article "Weighing In: Are Interns Slaves?  

 

The free internship party is now over as government agencies are targeting these programs.  Now, companies can only offer free internship programs if the program meets a rigorous six part test developed by the U.S. Department of Labor’s Wage and Hour Division.   The goal is to prevent companies from converting internship programs into forced free labor and to instead ensure that the programs are truly educational training programs.  

 

As for the interns, they stand to recover back pay for all of those hours worked - they are entitled to be paid for their work and now they have the legal right to recover that pay.