Articles Posted in Overtime

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.

Our New York employment attorneys have been examining recent efforts by the White House to strengthen workers’ overtime protections. The 2014 initiative, which began in March, seeks to reevaluate and adjust existing policies to reflect the changing realities of the workforce and ensure every employee receives fair pay.

According to the White House, current overtime laws fail to take into account the current economy and the circumstances of American workers. For instance, the “white collar exemption” is often used by employers to prevent salaried workers earning more than $561 per week – or working in certain professions – from earning overtime pay when they work more than 40 hours. This negatively affects many low-income workers, who work long hours without adequate compensation.

The Presidential Memorandum seeks to work with the Secretary of Labor to address several concerns, including:

In our last post, we discussed the basic theories and history behind tipping, as presented in the Accounting Degree Review’s comprehensive infographic, “Tipping in the United States.” Today, we will discuss the current state of affairs for tipped employees and how they can ensure they receive fair compensation for their work, including seeking advice from reputable New York employment attorneys.

As the infographic indicates, tipped employees only need to earn $30 per month in tips to “qualify” for the subminimum wage, which is currently frozen at $2.13 per hour. However, for full-time employees, $30 in tips on top of the subminimum wage paid by the employer still amounts to much less than minimum wage.

In addition, most states offer employers a “tip credit,” which reduces the wages they must pay to tipped employees based on the tips they receive. The law also stipulates that when employees don’t make enough between tips and their hourly wages to equal minimum wage, the employer must make up the difference. However, many employers do not comply with this law, even when staff or other entities discover the discrepancy.

New York employment attorneys are keeping a close watch on the changing laws and trends in our country. According to the Bureau of Labor Statistics, over 2.3 million servers currently work in the United States, many of whom depend on tips for their livelihood. Consumers pay $42 billion in tips to servers every year, but many people know little about where their money goes.

This excellent infographic from Accounting Degree Review provides valuable information for tipped employees (and their customers) about the history and current state of compensation for servers.

Equity Theory and Tipping

Employment attorneys in New York and beyond are paying keen attention to the “Restoring Overtime Pay for Working Americans Act” currently under consideration in Congress.

Senator Tom Harkin of Iowa, along with eight co-sponsors, introduced this bill in mid-June. It addresses what the senators believe is an unnecessarily low threshold for the Fair Labor Standards Act (FLSA) “white collar exemption,” or the weekly income level at which employees become exempt from overtime requirements.

Currently, the minimum salary level to become exempt from overtime is $455 per week; the bill would increase this to $1,090 per week. Additional proposals include adjusting the “highly-compensated employee” designation from $100,000 per year to $125,000 per year and limiting the amount of work an exempt employee can spend every week on non-exempt job duties.

On June 6, Mayor Bill de Blasio dropped a recent lawsuit which sought to block New York City’s prevailing-wage law. He is now working with the state court to implement the law.

City Council passed the bill, which would have raised the salaries of building workers in developments receiving $1 million or more from city subsidies. However, former mayor Michael Bloomberg, after unsuccessfully attempting to veto the law, sued to block its implementation. At the time, Mayor Bloomberg argued such a bill would force businesses to go elsewhere.

Although opponents of the prevailing-wage law argue lenders and retail tenants will shy away from city-subsidized projects, many positive outcomes are also likely to result. Possible benefits of de Blasio’s decision include:

Hurricane Sandy, the storm that hit the East coast over a year and a half ago, continues to impact families and individuals, some of whom still badly need assistance. Shockingly, one of the country’s most illustrious aid agencies may not be allocating relief resources effectively.

According to a recent report, the Red Cross has been less than forthcoming regarding how it spent over $311 million the agency raised in the aftermath of the 2012 hurricane. When nonprofit news source ProPublica submitted a Freedom of Information Act (FOIA) request to learn about the aid organization’s use of Sandy relief funds, the Red Cross quickly hired a law firm to help block the request.

The Red Cross claims certain aspects of their financial records qualify as “trade secrets,” which would pose potential harm to the organization if made public. The Red Cross claims to have spent – or to have committed to spend – $98 million on casework and individual assistance, $33 million on relief products, $50 million on housing, $94 million on food and shelter, and $25 million on emergency vehicles and healthcare. If those allocations happened, then why is the aid organization holding back? What, exactly, in their records are they worried about people seeing?

The mainstream media is awash with stories and editorials about minimum wage laws.

Perhaps we’re nearing tipping point — both common folk and politicians are realizing that our arcane minimum wage loss rules need to be up-leveled. People who labor hard should get fair compensation, and wages should keep up with inflation, at a minimum.

Some very interesting noises on this subject have been coming out of the Department of Labor (DOL). On June 12, the DOL’s Wage and Hour Division announced that it will go forward with something called a “Notice of Proposed Rulemaking” (NPRM), designed to hike up the minimum wage for federally contracted employees to $10.10 per hour to comply with President Obama’s Executive Order 13653.

As we mentioned in our last post, wage and hour cases against fast-food restaurants, like Subway, Dunkin’ Donuts, and McDonalds, have been on the uptick over the past two years.

However, the fast-food industry is, if nothing else, hardy.

McDonalds, for instance, has withstood withering assaults from heath groups, who claim that the restaurant’s sugar-laden food causes obesity and diabetes, as well as from minimum wage advocates, who’ve agitated for years to raise the minimum hourly wage at various fast-food franchises.

In a recent expose on Subway wage and hour cases, this blog discussed a deeply disturbing CNN Money analysis, which revealed that the sandwich maker stands accused of 17,000 Fair Labor Standards Act violations committed over the past decade and a half.

The CNN analysis noted that there are 26,000 Subways across the United States — the highest number of any fast-food chains in the country, including McDonalds. However, the global mistreatment of Subway “sandwich artists” disturbed regulators enough to provoke the Department of Labor to get involved to boost Subway’s compliance with FLSA rules.

One Labor Department spokesperson told CNN: “it’s no coincidence that we approach Subway, because we saw a significant number of violations.”

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