Archive for the ‘overtime pay’ Category
Monday, July 13th, 2015
Millions of workers who have not been receiving overtime pay would become eligible under a newly announced rule change. According to the Economic Policy Institute, the number of newly overtime eligible workers could be as high as 15 million. The change would update what is known as the “white collar” exemption to the overtime pay rules that covers certain executive, administrative and professional employees. Currently, these types of employees can be classified as “exempt” (meaning not entitled to mandatory overtime pay) so long as they are paid a salary of at least $455 per week ($23,660 per year) – an amount that is below the poverty line for a family of four and that has not been adjusted since 2004. Under the new rules, the minimum salary requirement for exempt white collar workers would increase to $970 per week ($50,440 per year) for 2016 and be indexed going forward to keep pace with inflation. Workers whose salary falls below this level would now be classified as “non-exempt” and guaranteed time-and-a-half for all hours worked over 40 per week.
While some big business groups are opposing the proposed changes, claiming terrible economic consequences will result if their labor costs increase; this is nothing new and the same cry that is heard every time they are forced to increase wages. The facts and history do not, however, support their dire warnings. In cities such as San Francisco and Santa Fe where the minimum wage has for years been set well above the federal minimum, and even coupled with other employee benefits such as paid sick leave and health-care, the impacts on employment have been essentially zero. Contrary to the claims of catastrophic job loss and business closing, studies have shown “no measurable” negative effect on employment when cities or states have raised their minimum wage above the federal minimum wage. Historically, increased pay for workers tends to generate a positive feedback loop – workers earn more, spend more, resulting in positive economic activity.
To put the pay figures in perspective, look back 40 years. In 1975 the minimum salary amount was adjusted and set to $250 per week. At that time, 65% of the American workforce was paid less – entitling them to overtime pay. Today, however, a mere 11% of the workforce earn less than the $455 per week minimum. Today, the $250 per week minimum salary would equate to more than $980 per week (approximately $51,000 per year) if it had been annually adjusted per the Consumer Price Index. So, to merely keep middle-class workers in the same economic position they were in as of 1975, the current $455 per week minimum salary would need to be increased to at least $980 per week. This is roughly what is being proposed under the new rules.
The Fair Labor Standards Act (FLSA) was implemented in 1938 to specifically address the serious problems caused by the overworking and underpayment of our nation’s core middle-class workforce. The two primary reasons the FLSA was put into place are:
- First, to protect against working conditions that are “detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” The law recognizes that employees need some time off to spend with family and relaxing from often stressful work and provides an economic incentive to not overwork employees. If an employer is going to demand work hours that deprive employees of this precious down time, the law places a premium value on such time – a cost that the employer must cover.
- Second, requiring the payment of time and a-half for all hours over 40 per week creates and strong economic incentive for employers to hire more people and spread the work, instead of overworking their existing staff. This helps to reduce overall unemployment in the U.S. economy, an issue every bit as relevant today as it was 75+ years ago.
The proposed changes to the overtime pay regulations are important to restore fair pay to millions of middle-class workers and are consistent with the overall goals and policy objectives that originally inspired the federal overtime pay laws.
About the Author: The author’s name is Jillian Johnson. Jillian Johnson is a freelance writer from New Jersey who has contributed to an array of blogs of various industries, particularly business, finance and health. She freelanced for a local NJ parenting magazine “Curious Parents” magazine and wrote for her college newspaper, “The Tower,” ultimately becoming the Editor-in-Chief. Jillian holds a BA in Communications and is currently working towards a BSN.
Wednesday, July 1st, 2015
President Obama’s administration took another promised step on Tuesday towards raising the living standards of American workers, and Republicans and business groups are not likely to be able to stop it.
Using the administration’s power to update workplace rules regarding premium pay for overtime work, the Department of Labor on Tuesday began taking steps that could bring higher pay or more leisure time to an estimated 5 million middle-income workers by next year.
Business and conservative groups are likely to try to block the new overtime rules with court challenges and legislation, just as Republicans are still blocking President Obama’s modest proposed legislative increase in the minimum wage to $10.10 for low-income workers. But the political and legal winds favor the administration.
There’s a strong legal and factual case for the Department of Labor’s action. The current regulations are grossly out-of-date and out of sync with the intention of the original legislation. According to administration calculations, the new rules should give at least 5 million middle-income workers a boost in pay if they work more than 40 hours a week or fewer unpaid hours at work and more time for themselves and their families if they are not forced into overtime work.
Now all hourly workers are guaranteed time-and-a-half pay for working more than 40 hours, but the rules do not require employers to pay time-and-half to salaried workers who make over $23,660 a year—even though that is below the poverty line for a family of four. Salaried workers below the threshold are regarded as being social equivalents to hourly workers. In 1975, 62 percent of salaried workers earned beneath the threshold and were guaranteed overtime pay by law, according to Ross Eisenbray of the Economic Policy Institute, but today the threshold only protects 8 percent of salaried workers. The new rules with a threshold of nearly $51,000 a year would provide overtime protection to about 44 percent of salaried workers.
If a salaried worker earns above the threshold and is a bona fide executive, administrative or professional employee, the employer does not have to pay him or her overtime. But this “white-collar exemption” is now widely abused, and employers give nominal managerial titles and a few administrative tasks to people in order to avoid paying time-and-a-half for more than 40 hours of work. Christine Owens of the National Employment Law Project, a pro-worker research and advocacy group, also wants the new rules to more adequately define the kind of work that qualifies for the white collar exemption. At this point, the Labor Department has not proposed such revisions in defining who is a manager or professional.
“While we appreciate that doubling the salary threshold will extend overtime pay protections to millions of currently exempt workers,” she wrote in an organizational statement on the rules, “we are concerned that failure to address the existing tests’ vague definitions, laissez-faire approach to the mix of ‘salaried’ and ‘hourly’ duties required for exempt status and other shortcoming threaten to deny far too many workers the overtime pay protections they deserve and the statute contemplates.” NELP, for example, wants the rules to state that exempt workers cannot spend more than half of their time on non-exempt work.
With unions at their weakest since the 1920s, more public policy action to raise wages is necessary, not only for minimum-wage workers but also for middle-income workers, such as those protected by overtime rules. Also, inequality continues to grow. University of California at Berkeley economist Emmanuel Saez recently calculated that despite recent growth in income of workers in the bottom 99 percent (an increase of 3.3 percent from 2013 to 2014), top 1 percent incomes grow faster and families in that sliver of the population captured 58 of real income growth per family from 2009 to 2014.
Overtime protection alone won’t reverse that trend, but it will make a real difference in the incomes and quality of life for millions of working families.
This blog was originally posted on In These Times on July 1, 2015. Reprinted with permission.
About the Author: The author’s name is David Moberg. David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at [email protected]
Wednesday, June 17th, 2015
The Obama administration will soon unveil its new overtime pay rules, which will mean that millions of additional workers will get overtime pay when they work more than 40 hours a week. Many low-wage employers are obviously upset about this—they’ve been using the weak overtime rules to make salaried employees work more than 40 hours a week for no extra pay, and they like it that way. Industry groups have been trying to make the case for keeping the overtime eligibility level low—it’s currently less than $24,000 a year—but the Economic Policy Institute’s Ross Eisenbrey shows just how weak those arguments are, taking a National Retail Federation report to the woodshed:
If the threshold is raised to $42,000, the NRF predicts significant changes in retail employment: while some employers will raise salaries for employees near the threshold to guarantee that they continue to be excluded from overtime protection, many salaried employees (some of whom work 60-70 hours a week for no extra pay) will have their hours reduced and as a result, 76,000 new jobs will be created averaging 30 hours per week. Altogether, half of the retail workforce that is currently excluded from coverage will be guaranteed coverage by the law’s overtime protections. That all sounds pretty good to me.The NRF’s projections are intended to be critical of the Labor Department’s rules update, but I have a hard time seeing why it would be a bad thing to create 76,000 new retail jobs, given that 8.6 million Americans are currently unemployed. Moreover, if I were a poorly paid bookkeeper or clerk in a department store, working 60 hours a week and getting paid no more than if I worked 40 hours, I’d be happy to see my hours cut and the extra work shifted to hourly employees.
Eisenbrey also points out that the NRF report suggests that the lobby group doesn’t think its members are following existing law: One of the requirements to exempt workers from overtime eligibility is that a worker have a managerial role, but the NRF report lists many traditionally non-managerial jobs such as bookkeepers, clerks, and secretaries as exempt from overtime.
Raises for some, fewer hours of work for others, and job creation. Gosh, those are some terrifying predictions for changes in overtime rules.
This blog was originally posted on Daily Kos on June 15, 2015. Reprinted with permission.
About the Author: The author’s name is Laura Clawson. Laura Clawson has been a Daily Kos contributing editor since December 2006 and a Labor editor since 2011.
Thursday, September 30th, 2010
The United States is a country where hard work is supposed to be rewarded. If you agree with that, would you be shocked to learn that there are more than 1.6 million homecare workers who are being denied federal minimum wage and overtime protections under current labor laws? And it is almost 2011!
Chew on this for a minute: More than 1 million hardworking Americans are legally denied basic labor rights most of us take for granted at this point. How did that happen, what can we do to change that?
It all goes back to The Fair Labor Standards Act (FLSA), which was enacted in 1938 to ensure a minimum standard of living for workers through the provision of minimum wage, overtime pay, and other protections – yet, domestic workers were excluded.
In 1974 the FLSA was amended to include domestic workers, such as housekeepers, full-time nannies, chauffeurs, and cleaners. However, people who were described as “companions to the elderly or infirm” were for some reason excluded from the law. They were compared to babysitters…
I love asking the question: If your elderly family member needed homecare to change herself, use the bathroom, get lifted from the chair to the sofa, and then have her meds dispensed at specific times; would you call the babysitter you call for date night with your spouse? Of course you wouldn’t, so why does the government consider these hardworking homecare providers babysitters? Yeah, I don’t know either.
In 2001 the Clinton Department of Labor finds that “significant changes in the home care industry” have occurred and issued a “notice of proposed rulemaking” that would have made important changes to this bizarre exemption. So, that was good news, right?
It was good news until W came to town. The Bush Administration terminated the revision process shortly after taking office. Thanks, W!
Then comes 2007: the US Supreme Court, in a case brought by New York home care attendant Evelyn Coke, upheld the DOL’s authority to define this exception to the FLSA. In short, that means that this crazy archaic law can be reversed beginning with the DOL, today.
Before we get you to take action on this situation, please keep in mind that these million-plus workers are currently living at near poverty level earning a median income of $17,000 a year. Most of these workers, who both love their work and are good at their work, must have two and three jobs to just make ends meet. With this scenario in play, these workers are quick to burn out or leave their trade entirely. This ultimately comes back to the consumer who often finds it difficult to hire and retain high quality home care services.
This article was originally posted on SEIU”s Blog.
About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.
Thursday, September 9th, 2010
You are deep in mandatory overtime (which you don’t get OT pay for) and you’re so exhausted that you start making really bad mistakes – dangerous mistakes.
We’ve all been there in one way or another in our working lives, but what if you were a patient and the exhausted worker making the mistakes was your resident physician? Obviously it can be a life or death situation for you. Resident physicians work shifts as long as 30 hours as often as three times a week, which can lead to physician fatigue and medical errors.
“As future physicians, we greatly value the well-being of our patients and know that we can serve them better if we are well ourselves,” says Sonia Lazreg, health justice fellow with the American Medical Student Association (AMSA).
Dr. Charles Preston, a researcher with Public Citizen’s Health Research Group and preventive medicine resident at Johns Hopkins School of Public Health says, “After a busy night on call, I remember a couple of times when I literally fell asleep on my patients standing up during morning rounds. I’d fall asleep while writing my patient progress notes. And driving home, I was careful to turn up the radio or blast the air conditioning so that I would at least have something more to keep me awake.” Can you imagine?
So, why is this dangerous system still in place?
Despite evidence that excessive work hours contribute to depression, car crashes, needle stick injuries and even premature labor for pregnant physicians, there are no Occupational Safety and Health Association (OHSA) rules protecting residents from these risks.
OSHA, which is part of the Department of Labor, is responsible for enforcing safety and health legislation, and it just doesn’t have the doctors-in-training on its radar … yet!
To get the OSHA radar blipping, consumer and health advocacy organizations delivered a petition to the agency today. You can read the petition here, and at the bottom of this entry you can see the full list of those petitioning OSHA.
The federal government already regulates work hours and sets rest-period requirements in a variety of industries, including the highway, aviation, railroad and maritime transportation industries, because fatigue plays a major role in transportation safety. In none of these industries are workers allowed to work hours even remotely as long as these physicians. Resident physicians deserve to have similar protections from excessive work hours that don’t give them adequate rest.
“OSHA must intervene so that physicians in training are no longer at risk for needle stick injuries, car crashes and other hazards that we know stem from chronic sleep deprivation.” says CIR/SEIU Healthcare President Dr. Farbod Raiszadeh.
Please get involved with this important situation. It will help you at the same time as some hardworking people.
For ideas on how to get involved, and to see this original article, visit SEIU.
About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.
Monday, December 7th, 2009
Workers employed in low-wage and poorly regulated industries (most prominently restaurants, residential construction, domestic cleaning, and mechanics) are confronted with staggering exploitation as employers look to cut corners in today’s recession. Such exploitation includes health and safety violations, discrimination, sexual harassment, retaliation, firing for participating in union activity, and wage theft—failure to pay workers for work performed, including overtime hours and final pay periods.
To combat this wave of illegality, a Chicago worker center has collaborated with a local university to create a map of law-breaking employers against which they have organized, giving workers and activists a powerful visual tool to bring to politicians and the community.
The Arise Chicago Worker Center has no shortage of evidence for the dire conditions facing Chicago’s low-wage workers, having collaborated with over 2,050 workers in the past seven years.
None of the restaurant workers who have contacted our organization during that time received overtime wages. One of our members seriously injured his back at a construction site, but his employer refused to pay legally required workers’ compensation. One African-American member, who works for a state-funded social service agency, has consistently received paychecks one to three weeks late, for more than two years. A group of candy manufacturers were denied bathroom breaks.
Recently, we spoke with a Guatemalan immigrant car wash worker who works from 7 a.m. to 8 p.m., six days a week, for $5.25 an hour. He does not receive overtime pay and takes home an average of $9 a day in tips. If that weren’t enough, the employer does not provide gloves needed for the work, and illegally deducts the cost of the workers’ required uniform from his paychecks.
With the help of the University of Illinois-Chicago Center for Urban Economic Development, Arise has mapped by ward—a political district—the law-breaking employers against which Arise has organized. The maps illustrate law-breaking employers in 43 of Chicago’s 50 wards, affecting workers living in 47 of the wards.
Groups of worker center members plan to meet with their ward aldermen to discuss workplace abuses and enlist support for a city response to the biggest problem facing low-wage workers: wage theft.
Clergy whose congregations are located in the 43 wards will join the workers. Recently, Catholic Bishop John Manz attended a meeting with Alderman Danny Solis in the 25th Ward, where Arise has recorded a dozen labor violations.
Solis committed to introducing the issue to the city council’s Hispanic Caucus, whose wards include great concentrations of Arise membership. Alderman Mary Ann Smith’s office offered to explore legislative strategies that could deny additional business permits to law-breaking employers. Additional meetings and research are planned to determine the best approach to address wage theft in Chicago—which may include a citywide ordinance that could make stealing a worker’s wages treated like other forms of theft.
*This post originally appeared in Labor Notes on December 3, 2009. Reprinted with permission from the author.
About the Author: Adam Kader (www.arisechicago.org) is the director of the Arise Chicago Worker Center, part of the national Interfaith Worker Justice network.
Tuesday, April 7th, 2009
On Thursday, March 19, 2009, the Ninth Circuit Court of Appeals reversed a District Court’s order and reinstated a class action lawsuit against FedEx Kinko’s Office and Print (“FedEx”) seeking unpaid overtime and related penalties on behalf of a class of hundreds of the company’s Center Managers. This short three page decision carries monumental implications which extend far beyond the class members of this single action to reinforce the rights of all California employees who are paid on a “salaried” basis and denied compensation for their overtime work.
The case filed in May 2005 alleged that Center Managers at FedEx’s California Stores were improperly classified as “exempt” from overtime pay under California law on the basis that these employees met what is commonly referred to as the “managerial” exemption. Under California law, exemptions from overtime pay are narrowly construed and the employer has the burden to prove the exemption applies. For the managerial exemption to apply, the employer must prove, among other things, that the employees spend more than one-half of their work time on exempt duties and “customarily and regularly” exercise discretion and independent judgment under Cal. Labor Code § 515.
The case was certified as a class action in 2006. In May 2007, FedEx moved for summary judgment asking the District Court to conclude that the entire class was exempt from overtime under California’s “executive” exemption. The District Court agreed and granted Defendant’s motion. The Plaintiff appealed to the Ninth Circuit seeking to have that decision overturned.
The Ninth Circuit reversed the District Court’s decision holding that the class members testimony and expert witnesses raised triable issues regarding whether the Center Managers were primarily engaged in management duties. The decision is important as it reinforces the heavy burden employers must meet in order to show that their employees are spending at least half of their time on exempt tasks – merely referring to those employees as “managers” is not enough.
By reversing the District Court’s finding for FedEx, the Ninth Circuit sent a clear message of the Court’s intention to require employers who seek to circumvent overtime laws by paying their employees fixed salaries to provide substantial evidence to support these decisions – rather than merely referring to thoseemployees as “managers”. The fact that the decision was issued a mere eight days after the hearing is somewhat unusual and bodes well for the rights of all salaried employees throughout the state.
In light of the ruling, the parties will be proceeding toward trial. If successful there, hundreds of FedEx Center Managers could recover compensation for years of lost wages. Employees with similar claims would be well advised to strike while the iron is hot in seeking to recover owed wages pursuant to this ruling. If you are currently working in the state of California and are not receiving overtime pay (or if you are an attorney currently representing such an employee), please visit the Scott Cole & Associates, APC website to obtain further information regarding this lawsuit.
About the Author: Matthew R. Bainer, Esq. is an experienced and successful advocate of employees’ rights and has successfully represented tens of thousands of employees, both in California and throughout the nation. Mr. Bainer, a well-respected practitioner in his field, has written for both legal periodicals and academic law reviews. For more information about Mr. Bainer and his firm, please visit the Scott Cole & Associates, APC website at www.scalaw.com.