Articles Tagged with FLSA lawyer

Whether or not an employer must pay a worker overtime wages for working more than 40 hours per week depends on a complex series of rules. These rules, which determine which workers are “exempt” from overtime — that is, which workers must be paid time-and-a-half after 40 hours (“non-exempt” workers) and which workers don’t have to be paid extra (“exempt” workers) — may be about to change by the federal Department of Labor (DOL). The implications for the labor market could be quite profound.

The “White Collar” Exemption

One set of rules, aimed at white collar workers, hinges, in part, on the amount of a worker’s annual salary. Currently, federal law classifies workers as exempt (not having to be paid overtime) if these two conditions are met: (1) they receive a salary (not an hourly wage) that is at least $23,600 per year ($455 per week), and (2) their job is primarily executive, professional, or administrative. Recently, the DOL has proposed raising that minimum salary.

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.

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.

As the U.S. labor world digests the news of the passage of measures in six states (and two cities in California) that have elevated the minimum wage, workers and their families probably are wondering just how high the minimum wage might climb in various states and across the U.S.

On the one hand, when wages are too low, that’s obviously problematic. As we discussed in our recent analysis comparing the lives of fast-food workers in Denmark with fast-food workers here in the United States, when you can’t make enough to pay rent, cover your medical bills, and feed your family — and you’re constantly at risk of losing your job or being made redundant — you suffer, your family suffers, and the community around you suffers.

But critics of minimum wage increases counter that raising the minimum wage too high can disincentivize employers from hiring and instead push them to outsource or automate. In aggregate, this process could increase unemployment rates and ultimately torpedo the economy.