Articles Posted in Fair Labor Standards Act (FLSA)

As Los Angeles city leaders ponder the steps they need to take to increase wages across the city, business owners are pushing hard to have tips counted toward minimum wage requirements for workers in the restaurant industry and other service industries where tipping is more common. Currently, California labor laws prohibit business owners from counting tips toward minimum wage requirements. But area restaurant owners claim increasing minimum wage levels across the city will force them out of business entirely unless they can use tips to offset their obligations.

The California Restaurant Association has been working to rally support. In response, state Assemblyman Tom Daly recently introduced association-sponsored legislation to loosen regulations that prohibit counting tips toward minimum wage, but he indicated the legislation failed to garner enough support to move forward, despite backing from L.A. Mayor Eric Garcetti.

Studies in other areas, including New York, where tips can be counted toward wage requirements, have found that complex rules can result in workers being significantly underpaid.

The U.S. Department of Labor has filed a lawsuit against the owners of two restaurants in Ames, Iowa, alleging they failed to pay workers the minimum wage of $7.25 per hour as well as additional payments for overtime as required by law.

The suit lists nearly $600,000 in damages for the wages it says are owed to the workers at both Mongolian Buffet and the now-defunct King Buffet. Both restaurants were owned by Li Ying Li and Jian Yum Zheng, a husband and wife who are both named in the lawsuit.

According to the suit, which was filed in late April, both servers and kitchen employees at the two restaurants were expected to work 72 hours per week. Some of the employees received fixed weekly wages of $450, which works out to $6.25 per hour.

San Francisco has joined its sister city, Oakland, in establishing the highest minimum wage rates in the country, increasing the citywide minimum wage from $11.05 to $12.25. The hike occurred on April 15th following Oakland’s raise in early March, and it marks an important step toward achieving the eventual goal of $15 per hour that’s targeted for 2018, according to the Service Employees International Union 1021.

The union hailed the move in a statement issued just prior to the rate going into effect, calling it a “mass movement on behalf of all the low-wage workers in our society.”

“The Bay Area is moving to develop the first regional standard in the country for wages and working conditions,” said Gary Jimenez, SEIU 1021’s Vice President for the East Bay.

Fast food giant McDonald’s recently announced, after some significant prodding from employees, that it will increase pay for all employees by $1 an hour. While the change represents a step in the right direction, it falls considerably short of the $15 an hour many workers’ rights advocates say that employees need to survive and thrive in today’s economy.

Just a few short years ago, at the height of the most recent economic downturn, unemployed workers counted themselves lucky to find even a minimum wage job at a fast food restaurant. With the Great Recession thankfully behind us now, however, these workers are beginning to feel secure enough once again to speak out against repressed wages as well as wage and hour violations and violations of the Fair Labor Standards Act (FLSA).

Organized demonstrations across the country have put pressure on big name employers to raise wages – and companies appear to be feeling the pressure. Within the last few months, McDonald’s, Walmart, TJMaxx, Marshalls, Homegoods, and Target have all agreed to increase wages to at least $9 an hour for all employees, and some of these companies have agreed to further increases to $10 an hour within the next year. These labor victories have followed on the heels of similar wage hike successes during Election Day 2014.

Every day, millions of people across America pass through a fast food drive through or stop inside places like McDonald’s or Carl’s Junior for a quick bite to eat. The fast food industry shows no signs of being crippled or even daunted by recent science suggesting that foods like processed carbs and sugar and vegetable oil may be fueling diseases like obesity and diabetes. But whether or not we should be eating all that fast food is a debate for another day. Today, we want to address whether or not fast food workers deserve a pay rate increase.

Research shows that workers at restaurants like McDonald’s typically earn minimum wage… or slightly above in some locations. Supporting yourself, much less a family, on minimum wage would be challenging, even in a city where the cost of living is relatively low. Imagine, however, trying to live on minimum wage in New York City.

According to a recent New York Times article, 20 year old Julia Andino faces that exact challenge. Not surprisingly, Andino’s McDonald’s wages do not stretch far enough to pay her rent, child care, bus pass, and other bills. So Andino, and thousands of others like her, are asking companies like McDonald’s to provide a substantial raise.

Minor league baseball players may be getting the short end of the baseball bat when it comes to their wages. Ongoing litigation on behalf of 34 former minor league players against Major League Baseball (MLB), all 30 big-league teams, and others indicates that players may be getting overworked and underpaid.

The antitrust exemption held by MLB is the conflict’s primary point of contention. Regulations provided by the Fair Labor Standards Act (FLSA) do not apply to MLB in the same way as they do to other major organizations, thanks to this unique antitrust exemption. For many players, this fosters pay that averages below hourly minimum wage—a low bar that has already failed to keep up with decades of inflation.

If you are worried that your employer is paying you below minimum wage or is somehow otherwise violating the FLSA, consider the following:

Although many people may suggest that Major League Baseball (MLB) players possibly make too much money, the opposite is true for their Minor League counterparts. In the wake of a growing lawsuit against MLB, research has come to light indicating that many minor league players earn below the hourly minimum wage of $7.25 per hour.

However, the MLB’s antitrust exemption — which is unique to the MLB and no other major sports organizations — virtually exempts it from standards of the Fair Labor Standards Act (FLSA).

An MLB spokesperson made a statement in October on the situation:

Our New York sexual harassment attorneys have been thinking a lot about the United Nations lately, in light of potent allegations made against a high ranking UN science official. Rajendra Pauchari recently resigned as the Chair of the United Nations Intergovernmental Panel on Climate Change (IPCC) after serving in the position since 2002. The surprising move — his full term would have expired in October of this year — comes on the coattails of allegations that Pauchari had sexually harassed colleagues.

The first allegation came from a 29-year-old employee at Pauchari’s Energy and Resources Institute (TERI). The woman alleges that he sent inappropriate messages to her through a number of mediums. Pauchari stepped down from his post at TERI following the allegations. A second, more recent allegation led to his resignation from the IPCC at the end of February. The second woman’s lawyer describes Pauchari’s harassment against many women.

Pauchari has faced calls for his resignation in the past, due to inaccuracies in climate reports; and in 2010, reporters from The Telegraph questioned Pauchari’s financial relationship with the UN.

On Friday, Jan. 30, the Second Circuit Court of Appeals in Manhattan, New York heard arguments addressing the legality of unpaid internship programs. The city expects to hear the court’s decision later this year. It seems inevitable that the pending decision will set a precedent for future internship organization that could reverberate across the state and possible the nation.

The suit has to do with two prior cases brought against companies by former interns. One case involved allegations against Fox Searchlight Pictures; the other involved allegations against the publishing behemoth Hearst Corporation, owner of magazines like Cosmopolitan and Marie Claire. The Fox interns won their case; the Hearst interns lost theirs.

Both cases concern a critical 1947 Supreme Court ruling that once dictated criteria for unpaid railroad training. The judge in the Fox case used the criteria as a strict standard, while the judge in the Hearst case saw the criteria as a broad set of best-practice guidelines. The appeals court will determine which ruling is lawful.

For several years, our New York wage and hour lawyers have been on the vanguard of a movement agitating for better treatment and fairer pay for restaurant workers. New reports about recent claims against McDonald’s suggest that discrimination, harassment, and wage and hour violations may be even more widespread in the industry than critics have suspected.

The fast food industry is an enormous job engine, currently responsible for 9% of private sector jobs in the U.S., employing 5.5 million women and 5.1 million men. A recent Mother Jones piece investigating the restaurant industry, based in part on information from the Economic Policy Institute, revealed some shocking statistics:

  • Median wage for all forms of payment (tip, tipshare, and flat rate) has stalled at $10/hour for the last 15 years. Non-restaurant U.S. workers, meanwhile, earn a median wage of $18.
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