Category Archives: Minimum Wage

D.Colo.: Pizza Hut Delivery Drivers’ Minimum Wage Claims, Premised on Claim That Defendants Failed to Reasonably Estimate Vehicle-Related Expenses for Reimbursement Can Proceed; Defendants’ Motion to Dismiss Denied

Darrow v. WKRP Management, LLC

This matter was before the Court on the defendants’ motion to dismiss plaintiff’s second amended complaint.  Plaintiff, a Pizza Hut delivery driver, alleged that defendants, Pizza Hut franchisees, violated the Fair Labor Standards Act (“FLSA”) and the Colorado Minimum Wage of Workers Act (“CMWWA”) by failing to reasonably approximate his automotive expenses for reimbursement purposes, and thereby, failing to pay him minimum wage.

Significantly, defendants paid plaintiff and opt-in plaintiffs at or near the Colorado minimum wage from 2007 to 2009.  According to the court, on average, the plaintiff and opt-in plaintiffs delivered two to three orders per hour and drove five miles per delivery.  Plaintiff alleged that defendants required their delivery drivers to ‘maintain and pay for safe, legally-operable, and insured automobiles when delivering WKRP’s pizza and other food items.’  Defendants reimbursed Plaintiff between $0.75 and $1.00 per delivery for the vehicle expenses incurred by plaintiff to make deliveries. Plaintiff alleged that it was defendants’ policy and practice to unreasonably estimate employees’ automotive expenses for reimbursement purposes, which caused Plaintiff and other similarly situated individuals to be paid less than the federal minimum wage and the Colorado minimum wage from 2007 to 2009 in violation of the FLSA and the CMWWA.

Rejecting defendants’ argument that plaintiff failed to state a claim for unpaid minimum wages under these facts, the court looked to the section 7(e)(2), which states that an employee’s regular rate does not include travel or other expenses incurred in furtherance of the employer’s interest:

“The FLSA provides a definition for “wages,” but does not address an employer’s reimbursement of expenses. However, “[Department of Labor] regulations are entitled to judicial deference, and are the primary source of guidance for determining the scope and extent of exemptions to the FLSA,” including expense reimbursement. Spadling v. City of Tulsa, 95 F.3d 1492, 1495 (10th Cir.1996). Therefore, the Court will look to the Department of Labor regulations to determine whether, under the FLSA, an employee may claim that his wages are reduced below the minimum wage when he is under-reimbursed for vehicle-related expenses. Under 29 C.F.R. § 531.35, “the wage requirements of the [FLSA] will not be met where the employee ‘kicks-back’ directly or indirectly to the employer or to another person for the employer’s benefit the whole or part of the wage delivered to the employee.” A kickback occurs when the cost of tools that are specifically required for the performance of the employee’s particular work “cuts into the minimum or overtime wages required to be paid him under the Act.” Id. Section 531.35 specifically incorporates § 531.32(c), which in turn incorporates § 778.217, which states:

Where an employee incurs expenses on his employer’s behalf or where he is required to expend sums solely by reason of action taken for the convenience of his employer, section 7(e)(2) [which provides that employee's regular rate does not include travel or other expenses incurred in furtherance of the employer's interest] is applicable to reimbursement for such expenses. Payments made by the employer to cover such expenses are not included in the employee’s regular rate (if the amount of the reimbursement reasonably approximates the expenses incurred). Such payment is not compensation for services rendered by the employees during any hours worked in the workweek.  29 C.F.R. § 778.217(a). In Wass v. NPC International, Inc. (Wass I), 688 F.Supp.2d 1282, 1285–86 (D.Kan.2010), the court concluded that these regulations “permit an employer to approximate reasonably the amount of an employee’s vehicle expenses without affecting the amount of the employee’s wages for purposes of the federal minimum wage law.” However, if the employer makes an unreasonable approximation, the employee can claim that his wage rate was reduced because of expenses that were not sufficiently reimbursed. Id. at 1287.

Plaintiff alleges that his under-reimbursed vehicle expenses constituted a kickback to Defendants because Defendants failed to reasonably approximate Plaintiff’s vehicle-related expenses and Plaintiff was specifically required to use and maintain a vehicle to benefit Defendants’ business. Plaintiff further alleges that Defendants’ unreasonable approximation of Plaintiff’s vehicle-related expenses led to Plaintiff’s wage being reduced below the minimum wage.

Defendants argue that Plaintiff cannot use an estimated mileage rate as a substitute for actual vehicle-related expenses. Without pleading his actual expenses, Defendants contend that Plaintiff is unable to prove (1) that Defendants’ reimbursement rate was an unreasonable approximation, and (2) that Defendants paid him below the minimum wage as a result of the under-reimbursement. Plaintiff responds that he does not have to produce his actual automotive expenses in order to state a claim under the Iqbal and Twombly standard because he can raise the plausible inference that Defendants’ approximation of his vehicle-related expenses was unreasonable without knowing his actual expenses. For the following reasons, the Court finds that Plaintiff’s Amended Complaint meets the pleading standard under Iqbal and Twombly.”

After a recitation of the applicable law, the court held that plaintiff had sufficiently pled his estimated costs of running his vehicle, using a variety of facts, including the reimbursement rate paid by defendants versus the IRS’ mileage reimbursement rate.  Further, when taken together with plaintiff’s hourly wages, he had sufficiently pled that defendants failed to pay him at least the federal and/or Colorado minimum wage(s).  Therefore, the court denied defendants’ motion in its entirety.

Click Darrow v. WKRP Management, LLC to read the entire Order.

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Florida’s Minimum Wage Increases to $7.31 Per Hour

The Florida minimum wage increased to $7.31 per hour, effective today, June 1, 2011.  Florida law requires the Agency for Workforce Innovation to calculate an adjusted minimum wage rate each year.  The annual calculation is based on the percentage change in the federal  Consumer Price Index for urban wage earners and clerical workers in the South Region for the 12-month period prior to September 1, 2010.

On November 2, 2004, Florida voters approved a constitutional amendment which created Florida’s minimum wage.  The minimum wage applies to all employees in the state who are covered by the federal minimum wage.

Employers must pay their employees the hourly state minimum wage for all hours worked in Florida.  The definitions of “employer”, “employee”, and “wage” for state purposes are the same as those established under the federal Fair Labor Standards Act (FLSA).  Employers of “tipped employees” who meet eligibility requirements for the tip credit under the FLSA, may count tips actually received as wages under the Florida minimum wage.  However, the employer must pay “tipped employees” a direct wage.  The direct wage is calculated as equal to the minimum wage ($7.31) minus the 2003 tip credit ($3.02), or a direct hourly wage of $4.29 as of June 1, 2011.

Go to the Palm Beach Post’s website or the State of Florida’s Agency for Workforce Innovation to read more about the increase.

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6th Cir.: Applying “Primary Benefit” Test, Students in Work-Study Program Were Not Employees Under FLSA

Solis v. Laurelbrook Sanitarium and School, Inc.

This case was before the Sixth Circuit on the Secretary of Labor’s appeal of the decision below, holding that the student-workers at Defendant’s sanitarium were not “employees” under the FLSA, and thus, were not entitled to the child labor protections afforded by the FLSA.  Of interest here, the Sixth Circuit clarified the test to be used under circumstances where students perform work as part of a work-study program, in which they are not compensated for such work monetarily.  After surveying the applicable case law, the DOL’s regulations and its interpretations of same, the court held that the applicable test was the “primary benefit” test.  In other words, the issue of whether such student-workers are covered by the FLSA or not turns on whether the “employer” or they themselves derive the “primary benefit” of the work performed.  Here, reviewing the specific facts of the case, the Sixth Circuit held that the trial court had properly concluded that the student-workers were non-employees, properly excluded from the coverage of the FLSA.

Describing the general factual background, the court explained:

“In conformity with its beliefs, Laurelbrook operates a boarding school for students in grades nine through twelve, an elementary school for children of staff members, and a 50–bed intermediate-care nursing home that assists in the students’ practical training (the Sanitarium). The school has been approved and accredited by the Tennessee Department of Education since the 1970s. The State of Tennessee accredits certain private schools through independent authorized accrediting agencies. The E.A. Sutherland Education Association (EASEA) is one such agency, whose purpose is to consider and adjudicate requests for accreditation from self-supporting (as opposed to denominational) schools, like Laurelbrook, which are operated by members of the Seventh–Day Adventist Church. Laurelbrook is currently accredited through EASEA.”

After surveying the applicable law and deeming the “primary benefit” test to be the proper test for determining whether the student-workers were employees, the court reasoned the student-workers here were not “employees” under the FLSA:

“In applying the primary benefit test, the district court recognized that students’ activities at Laurelbrook contribute to Laurelbrook’s maintenance, thereby benefitting Laurelbrook’s operations. Laurelbrook receives payment for services it provides to patients at the Sanitarium; some of these services are performed by students at no cost to Laurelbrook.  Hours worked by students in the Sanitarium also contribute to the Sanitarium’s satisfaction of its licensing requirements. Laurelbrook sells flowers and produce grown at Laurelbrook with student help. The proceeds from these sales go directly to Laurelbrook’s operations. As part of a course on collision repair, students assist in repairing cars for the public. Beneficiaries of these services pay Laurelbrook directly and the money is recycled back into school programs. Laurelbrook also earns revenue from the sale of wood pallets the students help build.

The value of these benefits to Laurelbrook, however, is offset in various ways. The district court found that Laurelbrook students do not displace compensated workers, and instructors must spend extra time supervising the students at the expense of performing productive work. Specifically, the court found that Laurelbrook is sufficiently staffed such that if the students did not perform work at the Sanitarium, the staff members could continue to provide the same services there without interruption. And while not specifically mentioned by the district court in its findings, there was evidence at trial that the same was also true of the work performed by students outside the Sanitarium. There was also testimony that, were it not for the instructors’ supervisory responsibilities, instructors would be able to complete more productive tasks in less time. Moreover, as the district court found, Laurelbrook is not in competition with other institutions for labor, so Laurelbrook does not enjoy an unfair advantage over other institutions by reason of work performed by its students…

Students do not receive wages for duties they perform. They are not entitled to a job with Laurelbrook upon graduation, and are expected to move on after graduation.”

On the other side of the ledger are the tangible and intangible benefits that accrue to the students. The district court found that Laurelbrook provides it students with significant tangible benefits. Students are provided with hands-on training comparable to training provided in public school vocational courses, allowing them to be competitive in various vocations upon graduation. Students learn to operate tools normally used in the trades they are learning, while being supervised by instructors. Students engage in courses of study that have been considered and approved of by the state accrediting agency. In short, the educational aspect of the instruction at Laurelbrook is sound, in contrast to the training program at issue in Baptist Hospital, where the supervision was inadequate, the exposure to various aspects of the trade limited, and the overall value to the students nil. None of these educational shortcomings is present here. Indeed, the Tennessee Department of Education, through EASEA, has determined that Laurelbrook’s vocational program provides benefits to the students sufficient to warrant accreditation.

Significant, too, are the intangible benefits students receive at Laurelbrook. As the district court found, receiving a well-rounded education—one that includes hands-on, practical training—is a tenet of the Seventh–Day Adventist Church. Laurelbrook provides students with the opportunity to obtain such an education in an environment consistent with their beliefs. The district court found that the vocational training portion of the education teaches students about responsibility and the dignity of manual labor. Thought not mentioned in the district court’s opinion, there is ample evidentiary support for these findings. Parents testified to the benefits their children received from the program, stating that the students learn the importance of working hard and seeing a task through to completion. Some parents testified that their children have become more responsible and have taken on leadership roles since participating in Laurelbrook’s program. Service in the Sanitarium engenders sensitivity and respect for the elderly and infirm. Laurelbrook alumni testified that the leadership skills and work ethic developed at Laurelbrook have proved highly valuable in their future endeavors. Employers also testified that Laurelbrook alumni have a strong work ethic, leadership skills, and other practical skills that graduates of other vocational programs lack.

The Secretary discounts the value of these intangible benefits, but we agree with the district court that they are of significant value. Courts that have addressed the value of such benefits have likewise concluded that they are significant enough to tip the scale of primary benefit in the students’ favor even where the school receives tangible benefits from the students’ activities. See, e.g., Blair, 420 F.3d at 829; Woods, 400 F.Supp.2d at 1166; Bobilin, 403 F.Supp. at 1108. The overall value of broad educational benefits should not be discounted simply because they are intangible.

After considering all of the evidence, the district court found that there is benefit to Laurelbrook’s operations from the students’ activities, but the primary benefit of the program runs to the students. We find no error in the district court’s application of the primary benefit test.”

Click Solis v. Laurelbrook Sanitarium & School to read the entire opinion.

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S.D.Fla.: Employer Need Not Pay Employee MW For All Hours Worked to Take Advantage of Tip Credit

Goldin v. Boce Group, L.C.

This case was before the court on defendant’s motion to dismiss, for failure to state a claim.  The plaintiff’s theory of relief for minimum wage violations arose from the fact that while he worked 51 hours per week, each week, Defendants paid Plaintiff the required reduced minimum wage for only forty hours, and failed to pay him at all for the additional eleven hours of overtime. Plaintiff claimed that because Defendants “did not pay Plaintiff the required amount for every hour he worked,” they were not permitted to take advantage of the tip credit at all and must disgorge the entire tip credit.  Inasmuch as the FLSA requires that employers who seek to take the tip credit must pay tipped minimum wage in order to do so, this theory would seem to make perfect sense, however the court disagreed and dismissed the case.

The court reasoned:

“There is no basis in the FLSA for the relief Plaintiff seeks. The FLSA clearly lays out the prerequisites an employer must meet in order to claim the tip credit. There are only two: (1) the employer must inform the employee that the employee will be paid the reduced minimum wage; and (2) all tips received by the employee must be retained by the employee. 29 U.S.C. § 203(m).  There is no “condition precedent” that the reduced cash wage be paid for every hour worked before an employer is entitled to claim the statutorily-mandated tip credit. See id. Congress could, and did, write into the FLSA express conditions precedent to the application of the tip credit. The Court declines to read a condition precedent into the statute where Congress did not create one. In re Tennyson, 611 F.3d 873, 877 (11th Cir.2010) (stating that where statute is “clear, unambiguous, and does not result in any absurd consequences,” the Court “will not … read into the text of the statute an unstated purpose.”).

In addition, the FLSA very clearly lays out the remedies available to employees who are subject to FLSA violations by employers. Successful FLSA plaintiffs are entitled to recover “the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and [ ] an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Congress wrote specific remedies into the statute. Congress did not choose to include as a remedy disgorgement of the tip credit where the plaintiff is a tipped employee. The Court will not write this additional remedy into the statute where Congress did not see fit to do so. See In re Tennyson, 611 F.3d at 877.

In addition, two other divisions of court in this District have rejected Plaintiff’s theory on almost identical facts. See Muldowney v. Mac Acquisition, LLC, Case No. 09–22489–CIV, 2010 WL 520912 (S.D.Fla. Feb. 9, 2010) (Huck, J.); Perez v. Palermo Seafood, Inc., Case No. 07–21408–CIV, 2008 WL 7505704 (S.D.Fla. May 8, 2008) (O’Sullivan, M.J.). In both cases, a tipped employee who was paid the reduced minimum wage for some hours claimed their employers were not entitled to claim the tip credit because they were not paid for “off-the-clock work.”

In Palermo Seafood, Magistrate Judge O’Sullivan found no textual support in the statute for the plaintiff’s position, observing: “The cases that have disallowed the tip credit have done so because the employer failed to comply with one, or both, of the following requirements: (1) the employee receive proper notice of the tip credit and (2) that the employee is not required to share his or her tips with non-tipped employees.” 2008 WL 7505704 at *2. Accordingly, Judge O’Sullivan found tip credit should apply to the plaintiff’s regular shift hours, for which she was compensated at the reduced minimum wage. Id. at *1.

In Muldowney, Judge Huck came to the same conclusion:

Section 203(m) merely prescribes the method for calculating a tipped employee’s wages and sets forth two explicit requirements that must be met for an employer to claim the tip credit, both of which are satisfied in this case. The statute says nothing about unpaid wages due to off-the-clock hours. Further, by rejecting Plaintiff’s interpretation, she is not left without a remedy: she can seek unpaid wages for her alleged off-the-clock hours under state law or other sections of the FLSA. Therefore, the Court finds that Defendants are entitled to the tip credit for hours where Plaintiff was paid the specified reduced cash wage.2010 WL 520912 at *1.

The Court agrees with these two well-reasoned decisions. However, this does not mean, as Plaintiff argues, that employers are therefore not required to pay employees the minimum wage for every hour worked. Of course employers must compensate employees at the required rate for every hour worked, and of course the failure to do so is a violation of the FLSA. 29 U.S.C. § 206(a)(1) (providing minimum wage amounts); 29 U.S.C. § 215(a)(2) (creating cause of action for violation of minimum wage and overtime provisions).”

It should be noted that this decision and the 2 decisions on which it relies were all rendered in the Southern District of Florida.  As tipped employee cases continue to become more and more prevalent though, as a result of tremendous amount of abuses of tipped workers in various industries, it will be interesting to see if courts outside of the Southern District of Florida have a different take, based on the text of 203(m).

Click Goldin v. Boce Group, L.C. to read the entire order.

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Florida Sued For Failing To Raise Minimum Wage, In Accordance With The Florida Constitution, Miami Herald Reports

The Miami Herald reports that:

“Two legal groups sued Florida’s labor agency Monday, claiming the state failed to raise the state’s minimum wage by six cents per hour this year to keep up with inflation.

The lawsuit claimed the Agency for Workforce Innovation violated the Florida Constitution by keeping it at the $7.25 federal rate, where it was last year, instead of raising it to $7.31 on Jan. 1.

About 188,000 minimum wage workers could be effected. At stake is up to $128 this year for a full-time employee working a 40-hour week. If all those the minimum-wage employees worked 40-hour weeks the extra six cents would add up to $15 million.”

Go to the Miami Herald to read the entire story.

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9th Cir.: Repayment Provision In CBA That Required Repayment Of Training Costs Did Not Constitute Impermissible “Kick-Back”

Gordon v. City of Oakland

In this case, a former employee brought a putative class action, alleging that the Defendant violated the minimum wage provisions of Fair Labor Standards Act (FLSA), and related state laws, by requiring her to reimburse it for part of her training costs due to voluntarily leaving city’s employment before completing five years of service.  Holding that such repayment was not an impermissible kick-back, the lower court dismissed.  The Ninth Circuit agreed and affirmed.

The Court laid out the following pertinent procedural/factual background:

“The facts here are taken from Gordon’s Proposed First Amended Complaint and the attachments thereto. Since the late 1990s, the City and the collective bargaining unit for City police officers, the Oakland Police Officers’ Association, have entered into successive collective bargaining agreements. These agreements provide that officers who voluntarily separate from the City’s employment prior to completing five years of service must repay a pro rata share of their police academy training costs. The agreement at issue here states that the cost of the training is $8,000, and it establishes the following repayment schedule:

Length of Service % of Repayment Due
Separation prior to 1 year 100% repayment of the $8,000.
Separation after 1 year but before completing the second year 80% repayment of the $8,000.
Separation after 2 years but before completing the third year 60% repayment of the $8,000.
Separation after 3 years but before completing the fourth year 40% repayment of the $8,000.
Separation after 4 years but before completing the fifth year 20% repayment of the $8,000.
Separation after 5 years 0% repayment

Gordon was a successful applicant for the position of Police Officer Trainee. She was advised that she was required to sign the “Conditional Offer of Position as a Police Officer Trainee” (“Conditional Offer”) to complete the hiring process. The Conditional Offer restated the training repayment schedule established in the collective bargaining agreement but it did not include a statement that the City would withhold an officer’s paycheck in satisfaction of any repayment owed. Gordon accepted and signed the Conditional Offer and became a police officer trainee employed by the City. The City directed her to attend its police academy, and she successfully completed her training in June 2006. She then became a police officer for the City.

On January 25, 2008, before completing her second year of service, Gordon resigned. At that time, she was earning $37.8025 per hour. In her final two weeks of work, Gordon was compensated for sixty hours. Her regular hourly pay, combined with an educational incentive in the amount of $117.33, resulted in Gordon earning $2,385.48 in gross pay for her final two workweeks. Gordon received a final paycheck reflecting this amount.

On the same day as her resignation, the City’s Fiscal Services Division notified Gordon that the City was entitled to recover $6,400 (eighty percent of $8,000) in training costs as set forth in the Conditional Offer Gordon signed. This notification stated that the City had withheld, in partial satisfaction of these claims, the paychecks for Gordon’s accrued unused vacation ($1,295.57) and compensatory time off ($654.77). Thus, the City’s total remaining demand was $4,449.66.FN2 This unpaid demand increased to $5,268.03 in March 2008 with the addition of a “collection fee.”

Gordon, on behalf of herself and others similarly situated, filed this action in district court seeking damages and declaratory relief under the FLSA, 42 U.S.C. § 1983, and various California state laws. The district court granted the City’s motion to dismiss Gordon’s complaint for failure to state a claim and gave Gordon fourteen days within which to file a motion for leave to file an amended complaint.

Following the court’s dismissal, Gordon paid the City the $5,268.03 it claimed was due and moved for leave to file her Proposed First Amended Complaint. The new complaint eliminated all but the FLSA claims and included that she paid the City $5,268.03 for “training reimbursement” and “collection costs.” The district court concluded that the proposed amended complaint still did not demonstrate that Gordon was paid less than the federal minimum wage during any workweek, and it denied her leave to file her minimum wage claim in the amended complaint. The district court did, however, grant Gordon leave to amend to assert a claim for violation of the overtime wage requirements under 29 U.S.C. § 207(o). Gordon subsequently dismissed with prejudice all overtime wage claims under 29 U.S.C. § 207(o) and entered into a Stipulation for Judgment of Dismissal for the purpose of facilitating this appeal.”

Holding that the repayment scheme laid out in the CBA was not a prohibited kick-back, the Court reasoned:

“The issue in this case is whether the Conditional Offer’s training reimbursement agreement, which required Gordon to repay $6,400 at the time of her resignation, caused her to receive less than the federal minimum wage during her final workweek. Gordon contends that there is no legal difference between deducting a sum from an employee’s check and directly demanding the employee surrender a sum after being paid. She maintains that after subtracting the costs she paid to the City for the training program, she was actually paid a negative sum for her last week of work. The district court, however, concluded that because the City issued Gordon a paycheck exceeding the minimum wage amount, the City’s reimbursement demand did not violate the FLSA’s minimum wage provision. We affirm.

The FLSA requires all covered employers to pay their employees at least the federal minimum hourly wage every workweek. 29 U.S.C. § 206. As a “public agency,” the City is a covered employer under the FLSA and must comply with the FLSA’s minimum wage requirements. 29 U.S.C. § 203(d). Additionally, employees cannot waive the protections of the FLSA, Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 89 L.Ed. 1296 (1945), nor may labor organizations negotiate provisions that waive employees’ statutory rights under the FLSA. Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728, 740-41, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981). Consequently, neither the Conditional Offer nor the collective bargaining agreement limit Gordon’s right to receive at least minimum wage.

The United States Department of Labor has adopted regulations outlining employers’ FLSA obligations. One such regulation is 29 C.F.R. § 535.31, which provides in pertinent part:

Whether in cash or other facilities, ‘wages’ cannot be considered to have been paid by the employer and received by the employee unless they are paid finally and unconditionally or ‘free and clear.’ The wage requirements of the Act will not be met where the employee ‘kicks-back’ directly or indirectly to the employer or to another person for the employer’s benefit the whole or part of the wage delivered to the employee. This is true whether the “kick-back” is made in cash or in other than cash.

Because Gordon did not allege she was paid below the federal minimum wage for any given week, the only way Gordon has stated a cognizable claim is if her payment to the City for a portion of her training costs is a “kick-back” payment as described in section 535.31.

While this court has not previously addressed this issue, we find persuasive the Seventh Circuit’s reasoning in Heder v. City of Two Rivers, Wisconsin, 295 F.3d 777 (7th Cir.2002). Heder was decided in the context of a similar reimbursement scheme for city firefighters. The City of Two Rivers funded its firefighters’ mandatory paramedic training but required a firefighter to reimburse the city for the costs of training if the firefighter left the city’s employment before completing three years of service. Id. The Seventh Circuit upheld the reimbursement agreement, comparing it to a loan; the cost of the training was a loan the city made to its firefighters, repayment of which was forgiven after three years. Id. at 781-82. If, however, a firefighter left before three years of service, the loan became due. Id. As long as the city paid departing firefighters at least the statutory minimum wage, it could collect the training costs as an ordinary creditor. See id. at 779.

The Seventh Circuit’s analysis is applicable here. The $5,268.03 payment Gordon made to the City is repayment of a voluntarily accepted loan, not a kick-back. Instead of requiring applicants to independently obtain their police training prior to beginning employment, which the City could do by only hiring individuals already possessing a POST certification,FN5 the City elected to essentially loan police officer trainees like Gordon the cost of their police academy training. The Conditional Offer Gordon signed explained that the City would forgive her repayment obligation at the specified rate and that she would owe nothing after five years of service. Gordon, however, chose not to serve the five years necessary to secure complete forgiveness. Despite the debt Gordon owed following her resignation, the City satisfied the FLSA’s requirements by paying Gordon at least minimum wage for her final week of work. The City was therefore free to seek repayment of Gordon’s training debt as an ordinary creditor.

Because Gordon’s repayment of her training costs is not a kick-back under section 531.35, the training reimbursement agreement does not violate the FLSA since she was paid at least minimum wage for her final workweek. Accordingly, we affirm the district court’s partial denial of Gordon’s Motion for Leave to File her Proposed First Amended Complaint.”

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New Study Dispells The Fallacy That The Minimum Wage Is Bad For Workers, NY Times Reports

In what has turned into a hot-button issue in this year’s election cycle, the NY Times discusses the myth, often profferred by conservatives, that the minimum wage hurts workers.

The Times reports that:

“An important new study exploiting this opportunity will appear this month in The Review of Economics and Statistics. The economists Arindrajit Dube of the University of Massachusetts Amherst, T. William Lester of the University of North Carolina at Chapel Hill, and Michael Reich of the University of California, Berkeley, closely analyze employment trends for several categories of low-wage workers over a 16-year period in all counties sharing a common border with a county in another state where minimum wage increases followed a different trajectory.

They report that increases in minimum wages had no negative effects on low-wage employment and successfully increased the income of workers in food services and retail employment, as well as the narrower category of workers in restaurants.

The study successfully addresses a number of criticisms previously leveled at the case-study approach and points to flaws in all previous studies that have found negative employment effects.

The level of technical discussion is daunting, but if you don’t want to grapple with concepts like “spatially correlated fictitious placebo minimum wages” you can watch a video instead — Arindrajit Dube clearly explains the issues in a 12-minute interview. He emphasizes that higher minimum wages tend to reduce worker turnover, benefiting both workers and employers.”

Go to the New York Times website to read the entire article.

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