Category Archives: Wage and Hour News

Arbitrator Rules That Massachusetts Trial Court System Must Pay Workers $30 Million In Retroactive Pay Increases, Boston Herald Reports

The Boston Herald is reporting that an Arbitrator has ruled that Massachusetts’ Trial Court system must pay its clerical workers $30 million in unpaid pay increases.

“In what is being called the costliest settlement of its type in state history, the financially strapped Trial Court system must shell out $30 million in back wages to thousands of unionized clerical workers, the Herald has learned.

In a decision reached May 7, an arbitrator ruled that the Trial Court broke its contract with Office and Professional Employees International Union, Local 6, by refusing to pay the negotiated 3 percent pay raises since 2007…

In addition to the $30 million in back pay, the Trial Court must find $17 million in unfunded raises for the union employees for the next budget year, starting in July, said Superior Court Justice Peter W. Agnes Jr., president of the Massachusetts Judges Conference.”

To read the entire article click here.

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Wal-Mart Settles Wage And Hour Lawsuit For Up To $86 Million, Reuters Reports

Reuters is reporting that Wal-Mart has agreed to pay up to $86 Million to settle a class-action lawsuit accusing it of failing to pay vacation, overtime and other wages to thousands of former workers in California.

According to Reuters, “[a]bout 232,000 people will share in the settlement, which was disclosed on Tuesday in a federal court filing.

It requires a minimum payout of $43 million, and “far exceeds other recent settlements” involving Wal-Mart, the filing shows. The accord requires court approval.”

To read the entire story click here.

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Growth of Unpaid Internships May Be Illegal, New York Times Reports

Today’s NY Times reports that there is a growing trend of employers, who illegally deem workers, entitled to be paid at least minimum wage, to be unpaid “interns.”

The article reports that, “[w]ith job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.

Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.

Many regulators say that violations are widespread, but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer.”

To read the entire article, click here.

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Health Care Reform Law Amends FLSA to Require Breastfeeding Breaks, Thompson Reports

Under the new Health Care Reform Law, the FLSA has been amended in several important respects.  In addition to the highly publicized provision of healthcare for previously uninsured people, Thompson reports that employers must now provide breaks for women who are breastfeeding:

“Employers must now provide “reasonable” unpaid breaks to nursing mothers to express milk for their infants under an amendment to the Fair Labor Standards Act included in the landmark health care law signed by President Obama on March 23.

The health care law adds a new provision to the FLSA, 29 U.S.C. §207(r)(1), which allows nursing mothers to take a break every time they need to express breast milk and requires employers to provide a private location, other than a bathroom, where such employees may express milk. Employees must be allowed such breaks for up to one year after their child’s birth.

Employers of fewer than 50 employees are exempt if the breastfeeding requirements would “impose an undue hardship by causing the employer significant difficulty or expense.”

A number of states already mandate breastfeeding breaks, and under the FLSA, employers must comply with the standard that is more favorable to the employee (29 U.S.C. §218).

The health care law also amends the FLSA to require employers of more than 200 employees to automatically enroll new employees in existing employer-offered health plans.”

To read the entire article click here.

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Mortgage Loan Officers Do Not Typically Qualify For The Administrative Exemption, Says DOL

Administrator’s Interpretation No. 2010-1

The Wage and Hour Division, under the current Administration, has issued its first Administrative Interpretation Letter.  The introductory text of the Letter is below:

“Based on the Wage and Hour Division’s significant enforcement experience in the application of the administrative exemption, a careful analysis of the applicable statutory and regulatory provisions and a thorough review of the case law that has continued to develop on the exemption, the Administrator is issuing this interpretation to provide needed guidance on this important and frequently litigated area of the law.  Based on the following analysis it is the Administrator’s interpretation that employees who perform the typical job duties of a mortgage loan officer, as described below, do not qualify as bona fide administrative employees exempt under section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).

Typical Job Duties of Mortgage Loan Officers

The financial services industry assigns a variety of job titles to employees who perform the typical job duties of a mortgage loan officer.  Those job titles include mortgage loan representative, mortgage loan consultant, and mortgage loan originator.  For purposes of this interpretation the job title of mortgage loan officer will be used.  However, as the regulations make clear, a job title does not determine whether an employee is exempt. The employee’s actual job duties and compensation determine whether the employee is exempt or nonexempt.  29 C.F.R. § 541.2.

Facts found during Wage and Hour Division investigations and the facts set out in the case law establish that the following are typical mortgage loan officer job duties: Mortgage loan officers receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity.  Mortgage loan officers collect required financial information from customers they contact or who contact them, including  information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens.  They also run credit reports.  Mortgage loan officers enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided.  They then assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products. Mortgage loan officers also compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings.  See, e.g., Yanni v. Red Brick Mortgage, 2008 WL 4619772, at *1 (S.D. Ohio 2008); Pontius v. Delta Financial Corp., 2007 WL 1496692, at *2 (W.D. Pa. 2007); Geer v. Challenge Financial Investors Corp., 2007 WL 2010957 (D. Kan. 2007), at *2; Chao v. First National Lending Corp., 516 F. Supp. 2d 895, 904 (N.D. Ohio 2006), aff’d, 249 Fed.App. 441 (6th Cir. 2007); Epps v. Oak Street Mortgage LLC, 2006 WL 1460273, at *4 (M.D. Fla. 2006); Rogers v. Savings First Mortgage, LLC, 362 F. Supp. 2d 624, 627 (D. Md. 2005); Casas v. Conseco Finance Corp., 2002 WL 507059, at *1 (D. Minn. 2002).”

To read the entire Letter click here.

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Filed under Department of Labor, Exemptions, Wage and Hour News

Miami-Dade County Passes New Wage Theft Ordinance, Miami Herald Reports

The Miami Herald reports that Miami-Dade “[c]ounty overwhelmingly passed a new ordinance to combat wage theft, making it easier for workers to bring legal action against employers who fail to pay them.

Thursday’s vote comes after more than a year of work by a non-governmental task force of labor and immigrant advocates in Miami. San Francisco has a similar ordinance. Los Angeles and New Orleans are considering them.”

In addition to recovering the unpaid wages that have been wrongly denied them, workers can recover 2 times that amount in additional damages.  The ordinance will result in a a low-cost administrative process that seeks to speed along claims for workers who have not been properly paid their wages.

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Companies Slash Payrolls By Calling Workers Independent Contractors; Costly To IRS And States, L.A. Times Reports

The LA Times reports that the “Internal Revenue Service and 37 states are cracking down on companies that try to trim payroll costs by illegally classifying workers as independent contractors, rather than as full employees, The Associated Press has learned. The practice costs governments billions in lost revenue and can leave workers high and dry when they are hurt at work or are left jobless.

Many who have studied the problem believe it’s worsened during the economic downturn, fueling even more aggressive recovery efforts by states.”

The article points out that “[t]ypically, unless workers fight for and win a ruling that they should have been treated as full employees, they aren’t able to collect workers’ compensation for the injury or unemployment benefits when left jobless.”

To read the full article click here.

To read more about the legal factors that determine whether someone is misclassified as an independent contractor vs employee, and industries where misclassification is rampant click here.

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Low-wage Workers Suffer High Rate Of Workplace Abuse and Wage Theft, UCLA Survey Shows

UCLA Today, a periodical covering faculty and staff news at UCLA has released a story summarizing the findings of a recent study conducted by 3 UCLA researchers, that examined the frequency of labor and wage abuses against low-wage workers in the Los Angeles area.  According to the story, “[a]n alarmingly high number of Los Angeles County workers at the bottom of the labor market are the victims of “wage theft” and other workplace violations by employers, who on average deprive workers of 12.5 percent of their weekly paycheck, according to a study released today, Jan. 6, by three researchers with the Institute for Research on Labor and Employment at UCLA.
 
Approximately 88 percent of those surveyed reported at least one instance of being paid less than the minimum wage, working overtime and not being paid for it, working off-the-clock for free, or other pay-based violation during the previous work week.
 
The results of a 2008 survey of 1,815 workers in the county holding such low-wage jobs as nannies, bank tellers, retail workers, garment workers, janitors and gardeners show that most of these violations are more prevalent in Los Angeles than in New York or Chicago, where similar surveys were done. Detailed, hour-long interviews were conducted with the workers who were asked to describe their previous work week.
 
“This is a wake-up call to the community,” said Professor Ruth Milkman, lead author and a professor of sociology at UCLA and the City University of New York Graduate Center. Ana Luz Gonzalez, a doctoral candidate in urban planning, and Victor Narro, project director at the UCLA Downtown Labor Center and a lecturer in Chicano studies, are co-authors on the study.
 
Most egregious, said researchers, was that 30 percent of those surveyed in L.A. County were being paid less than the legal minimum wage for California, which is $8 an hour.”
                                                                                                                                                                                        To read the entire report click here.  To read the UCLA Today news story  click here.   

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Few Labor Violators Fined, Des Moines Register Reports

Today’s Des Moines Register reports that very few employers who are found guilty of violating the special Federal Minimum Wage laws, applicable to disabled workers, are actually fined as a result of their violations.

The report disclosed that, “[t]he U.S. government fined only three of the 797 employers that violated federal labor laws while paying subminimum wages to disabled workers over a five-year period.

The newly disclosed statistics come from the U.S. Department of Labor and are in response to questions posed nine months ago by U.S. Sen. Tom Harkin, D-Ia.

Harkin has been studying the enforcement of a 71-year-old federal law that enables companies to pay disabled workers less than the minimum wage if they first obtain federal approval.

Harkin chaired a Senate committee hearing that examined why Henry’s Turkey Service was allowed to pay its mentally retarded workers 41 cents an hour to work in a turkey processing plant in West Liberty.

Critics say the new statistics confirm what they have long alleged: Companies typically have nothing to lose by violating wage-and-hour laws intended to protect disabled workers.

Harkin said Monday that there is ‘no question’ the law currently fails to provide the disabled with ‘fair employment opportunities that are sufficiently policed to prevent exploitation.’

He said he is preparing ‘substantial legislative changes’ that he expects to make public in the next few months.”

To read the entire article click here.

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As Wage Theft Rises, States And Cities Crack Down, AP Reports

The AP reports that, “[a]cross the nation, the long-simmering problem of employers who don’t pay their workers appears to be getting worse, especially for immigrant laborers.

In the absence of aggressive federal action, some states and local governments have begun to tackle the issue on their own. They say employers who don’t pay overtime or minimum wage are unlikely to pay into state workers’ compensation or unemployment insurance funds — bilking taxpayers even as they’re cheating workers.

Workers rights centers say wage theft has become the No. 1 complaint they’ve heard in recent months.”

To read the entire story go to the AP’s website.

To speak with Wage and Hour Attorney Andrew Frisch call 1-888-OVERTIME or click here today.

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