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Employers are allowed to pay their tipped workers a lower minimum wage than workers who do not earn tips, but paying them tips without any wages is not legal under the federal Fair Labor Standards Act (FLSA) of 1938. Even when tipped employees are paid the lower minimum wage, the tips they earn, plus their wages, must add up to at least the standard minimum wage to which all other workers are entitled. If their earnings fall below the standard minimum wage, the employer is required to make up the difference.

According to a wage and hour lawsuit filed against Café Misono Inc. by the Department of Labor (DOL), the restaurant allegedly refused to pay at least one waiter anything at all, requiring that employee to live off their tips alone. Continue reading

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Although arbitration was not designed to handle class actions or collective actions, mediation with the help of an arbitrator can be achieved for a group of plaintiffs, with the help of class representatives, as in the recent wage and hour lawsuit against Google Fiber Inc. and ITC Service Group Inc.

Google Fiber hired ITC as a contractor to install and service Google’s products in Kansas City, one of the cities in which Google provides its own brand of internet and TV services. While working on Google Fiber’s products, employees for ITC allege they were made to perform work for which they were never paid, including work they performed before their shifts began, and work they did over their unpaid lunch breaks when they were “clocked out.”

The lawsuit further alleged supervisors were misclassified as exempt from overtime, even though they allegedly did not meet all the requirements for the FLSA’s overtime exemption.

When the lawsuit was first filed, ITC was the only defendant listed on the complaint, but Google Fiber was later added as a second defendant. Not only were the ITC workers performing work for Google Fiber, but they also allege that they were made to announce themselves as Google employees and wear gear bearing the Google brand while on the job. As a result, the complaint alleged Google was at least partially responsible for the alleged wage and hour violations. Continue reading

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The idea of being one’s own boss is very appealing to many people all across the country, although it often sounds better in theory than it works out to be in practice.

The rise of the so-called “gig economy” in recent years, as a reaction to both the recent Great Recession and an increased ability to telecommute and do odd side jobs on a regular basis, has given millions of Americans the chance to be their own boss.

But are they really their own boss?

The federal Fair Labor Standards Act (FLSA) provides certain protections for employees, including defining overtime, requiring they be paid a premium hourly rate for all the overtime they spend working, defining minimum wage, and requiring employers to help pay taxes and social security benefits for each of their employees. Continue reading

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Since federal courts tend to rule in favor of Big Business, most companies prefer to dispute overtime lawsuits in federal court, but their ability to do so has some limitations. Among those limitations is the requirement that the total amount of the claims for which plaintiffs are filing add up to at least $5 million.

According to a California federal judge, an overtime class action lawsuit against Bank of America did not meet that requirement, so Judge Vince Chhabria granted the plaintiff’s request to remand the case back to Alameda County Superior Court.

Bank of America allegedly underpaid its business bankers by refusing to properly compensate them for the hours they worked after eight hours in a day or forty hours a week. In its motion to have the case moved to federal court, Bank of America alleged the claims involved, plus the attorneys’ fees and legal costs, added up to at least $8 million.

Judge Chhabria did not follow the bank’s logic, since that number assumes each plaintiff worked 2.5 hours of overtime for 90% of the weeks in the proposed class period.

Laura Lopez, one of the named plaintiffs in the proposed class action lawsuit, provided evidence that she did not actually work that many hours of overtime for most of the weeks included in the class period – some weeks she worked no overtime and she was on vacation for others. Continue reading

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10 Most Common Wage Violations in Illinois

1) Not Paying Overtime

The federal Fair Labor Standards Act (FLSA) requires employers to pay all their non-exempt, hourly workers at least one and one-half times their normal hourly rate for all time they spend working after eight hours a day or forty hours a week. But employers continue to find ways to avoid paying overtime – from refusing to log the overtime hours to misclassifying their hourly employees as exempt from overtime, even if they don’t meet the requirements.

2) Making Improper Deductions from Employees’ Pay

Employers can make certain deductions from their employees’ pay without the employees’ permission, such as taxes and social security. Anything else requires express, written permission from the employee at the time the deduction is made, but many companies take advantage of this and make illegal deductions from their workers’ pay without their consent, thereby making their employees (especially their low-income employees) pay for some of the company’s overhead costs.

3) Miscalculating Overtime Rate

Most companies just multiply their employees’ normal hourly rate by 1.5, multiply that by however many overtime hours they worked, and leave it that. In many cases, that’s probably fine, but if the employee earned any tips, bonuses, commissions, or any other income during the overtime pay period, that income also needs to be included when calculating their overtime rate, but many employers neglect to do so.

4) Improper Use of Tip Pooling

Because employees who earn tips can be paid a lower minimum wage ($4.95/hr in Illinois compared to $8.25/hr) many restaurants look for ways to justify paying the lower minimum wage, even to employees who don’t earn tips. Many of them do this by making tipped employees, such as servers, share their tips with non-tipped employees, such as cooks and dishwashers.

5) Manipulating Timecards to Make It Look Like Employees Worked Less Time

Some employers round out an employee’s time when they punch in or out, often resulting in the employee working a few minutes more or less than the time for which they get paid. It may not seem like much, but those few minutes add up over time. Other companies simply refuse to include all the hours their employees spent working, especially overtime, so they can pay them less than they earned.

6) Misclassifying Employees as Independent Contractors

Companies don’t have to pay taxes, social security, or benefits for the independent contractors they hire, but because those expenses fall on the worker, there are specific requirements a worker needs to meet in order to qualify as an independent contractor. Far too many companies have been misclassifying their employees as independent contractors and placing the burden of these extra expenses on low-earning workers who can’t afford them. Continue reading

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Although the Department of Labor (DOL) is not a governing body, it is a government agency that has been charged with protecting American workers from employers who might try to take advantage of them. Because it is not part of the legislative branch of government, the DOL cannot make laws, but it can make rules. But a question that often arises is whether those rules are enforceable.

The specific rule in question this time is one in which the DOL raised the minimum salary a worker must be paid before they can qualify for the overtime exemption under the federal Fair Labor Standards Act (FLSA). The FLSA put the salary limit at $23,660 per year, but that was more than ten years ago, and under the Obama administration, the DOL more than doubled it to $47,476 per year.

The new rule faced massive opposition from 21 states and numerous business groups, including the U.S. Chamber of Commerce, which filed a lawsuit against the DOL, claiming the department did not have the authority to either create or enforce such rules. The rule was supposed to go into effect on December 1, 2016, but the week before, a federal judge filed an injunction against the rule.

The injunction was meant to be a temporary measure by which the court could gain more time to consider the dispute. But since the court still has not reached a final decision on the matter, what are employers supposed to do in the meantime? Continue reading

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Considering how much time and resources Google devotes to collecting data from its users, it seems odd for the tech giant to claim a request for data on how they compensate their employees is overly burdensome.

Google had taken on millions of dollars in federal contract work before it was selected in September 2015 for a mandatory equal opportunity compliance evaluation in regards to the company’s government contracts. Because there are federal laws in place that require employers to pay all their workers equally and fairly (regardless of sex, race, ethnicity, religion, etc.), the Department of Labor (DOL) maintains an Office of Federal Contract Compliance Programs, which ensures the companies performing contract work for the government are abiding by the federal compensation laws.

Google has refused to provide the relevant data pertaining to how it pays its employees, claiming the vast amount of information requested would require too much time and money for them to compile all the data. Google claims the information the DOL is requesting comprises more than 1.3 million data points and hundreds of thousands of pages of information. It also alleges much of the data the DOL is requesting is not relevant to how Google compensates its employees and to provide it would be to compromise the confidentiality of their workers. Continue reading

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There are several reasons a judge can deny class certification to a group of plaintiffs, but ruling on their claims is not one of them. A California trial court judge recently dismissed a class of plaintiffs, denying their allegations that their employer did not provide them with proper rest breaks or compensate them accordingly for missed breaks.

The proposed class consists of current and former employees who worked as dispatchers and EMTs for the ambulance company, American Medical Response West (AMR). According to the lawsuit, the ambulance company allegedly maintained a rest period policy in which employees were still on call during their rest periods.

The problem with that policy is it violates California Labor law, which states all hourly, non-exempt employees are entitled to one, uninterrupted rest break, lasting at least ten minutes, for every four hours they work. Any time an employee misses one of these breaks or gets interrupted, that worker is entitled to one hour’s worth of wages, in addition to all their normal wages, tips, bonuses, etc. earned that day.

AMR argued that, by allowing their employers to take rest breaks when they were on call, they were essentially granting them the equivalent of an off-duty rest period. The trial court judge agreed and refused to grant the plaintiffs class certification. Continue reading

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Although the federal Fair Labor Standards Act (FLSA) requires employers to pay all their workers no less than the standard, federal minimum wage (currently set at $7.25 per hour) the FLSA does provide exceptions to that rule. One of those exceptions covers employees who receive tips by working directly with customers. This category most commonly includes servers and bartenders, but it can also include barbers, drivers and delivery personnel, depending on their employment situation.

Because tipped employees are expected to receive most of their compensation directly from the customers they work with, the legal minimum wage for tipped employees is just a fraction of the standard minimum wage, although the FLSA does require employers to make up the difference if the combination of wages and tips earned by tipped employees is less than the standard minimum wage.

In order to prevent employers from taking advantage of the lower minimum wage for tipped employees, the U.S. Department of Labor (DOL) requires employers to make sure their tipped workers are spending no more than 20% of their time on un-tipped labor (cleaning, restocking supplies, etc.) If an employee does spend more than 20% of their work hours performing work in which they are not in direct contact with customers, then the FLSA requires their pay to be raised to the standard minimum wage. Continue reading

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Many children have big dreams of growing up to become a professional athlete and get paid millions of dollars to play their favorite sport. For baseball players, the best way to get into the major leagues is by playing in the minor leagues, which acts as a feeder system on which the major league clubs rely to get their newest star players.

But the minor league players don’t see anywhere near the amount of money the major league players make, despite the fact that they work just as hard as, if not harder than, those playing in the major leagues. According to a recent class action lawsuit filed against Major League Baseball (MLB) and Minor League Baseball (MiLB), minor league players allegedly worked more than 50 hours a week on a regular basis during the season, and yet some of them were paid as little as $1,100 per month.

The MLB insists the players don’t have a case – that the number of hours each player spent working varies too much to justify a class action lawsuit, and that baseball players don’t qualify as hourly workers under the federal Fair Labor Standards Act (FLSA). Continue reading