Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘benefits’

With Shutdown Over, OPM provides Guidance on Back Pay for Federal Employees

Thursday, February 14th, 2019

In late January, federal employees across the country returned to work for the first time in over a month.  In an effort to provide retroactive pay as quickly as possible, The U.S. Office of Personnel Management (OPM) has issued guidance to federal agencies impacted by the shutdown to explain how their employees should receive back pay and other benefits.

Back Pay

Employees who were furloughed will receive back pay at their standard rate of pay for the time that they would have been in a regular pay status if the shutdown had never occurred. This includes overtime pay, night pay or other premium pay (e.g. LEAP, holiday pay, etc.) that the employee would have received.

However, if an employee was scheduled to be in a non-pay status during the shutdown, including Leave Without Pay (LWOP) or serving a suspension, then the employee is not eligible for backpay during that period, including holidays.

For excepted employees who were required to work without pay during the shutdown, they will receive their regular pay for the hours they actually worked, including any overtime or other premium pay. Conversely, if the employee did not show up for work and did not request leave, they will be marked absent without leave (AWOL) and will not receive back pay.

For any employees who received unemployment payments during the shutdown, the state involved will receive notice of the back-pay amount and then make a determination as to what repayment is required.

Leave

Furloughed employees cannot be charged paid leave or other paid time off during the shutdown, even if they had prescheduled paid leave. On the other hand, excepted employees may be charged leave – and compensated for it through back pay – for periods during the furlough where they used paid leave in lieu of reporting to work.

Many employees were planning to take “use or lose” annual leave but were furloughed before they could do so. According to OPM, agencies must restore any annual leave that was scheduled in writing prior to November 24, 2018. Note that restoration of leave will not apply to scheduled leave for December 24, which was declared a federal holiday in 2018, unless the employee can show they would have rescheduled the leave for another day. Restoration also does not apply to leave that had previously been restored. In those instances, the leave is lost for good.

Similarly, employees who were unable to use compensatory time off in lieu of overtime pay due to the shutdown will be paid for such time. Compensatory time off for travel that was forfeited can be restored and extended for another 26 pay periods.

In regard to accruing leave during the shutdown, all employees receiving back pay are considered in a pay status for that period and will also accrue leave at normal rates.

FMLA

The Family Medical Leave Act (FMLA) provides unpaid leave for up to 12 weeks but employees are permitted to substitute paid leave during this time to continue receiving pay.  For employees that were on FMLA during the shutdown, back pay will be dependent on whether the employee was scheduled to substitute paid leave. If the employee had planned to use paid leave during their FMLA leave period, these employees will not only receive back pay but they will also not be charged any leave. However, employees scheduled to be in a non-pay status (i.e. FMLA LWOP), will not receive back pay. For all employees using FMLA leave, the shutdown period will still count toward their 12 weeks of protected leave.

Benefits & Retirement

Employees are also entitled to retroactive benefits. Deductions will be taken out of the back-pay checks to cover employee contributions to health and retirement plans. Loan payments to Thrift Savings Plans (TSP) will also be made.

For those employees who requested to retire during the shutdown, the retirement will be made effective retroactively to the date requested and no back pay will be received after that date.

It isn’t yet clear when agencies will begin making these retroactive payments. If you believe the agency has incorrectly calculated your back pay or you have been improperly denied any benefits as a result of the shutdown, you should contact an experienced federal employment attorney to determine what options you have to protect your rights.

About the Author: Alan Lescht has been successfully litigating employment discrimination, civil rights, and commercial litigation cases for more than 30 years and has won dozens of notable trials. He is the founding partner of Alan Lescht and Associates, PC, where he oversees the firm’s employment litigation and counseling practices.

First Women Graduate from Fort Campbell Welding Program

Monday, June 6th, 2016

Kenneth QuinnellOne of the great benefits of joining the military is the opportunity to learn skills that benefit a soldier after their service is completed. Some soldiers, such as Specialist Tanya Preddy and Sergeant Alyssa Tamayo, prepare for careers that provide good jobs while breaking ground at the same time. Preddy and Tamayo just became the first women to graduate Fort Campbell’s Veterans in Piping program in Kentucky. Veterans in Piping is a program of the United Association (UA).

Preddy said: “I was pretty excited going into this, to be honest, because I mean, who wouldn’t be excited about making stuff with fire,” she joked. “That’s awesome to me. I’d never welded before this class, ever. I just thought it would be really cool and fun.”

“I think the guys were surprised to see us [in the classroom],” Tamayo added. “A lot of people think welding is just for men and with us being the first two females at Fort Campbell ever, in the back of my mind I was thinking ‘I have to beat everybody in here.’ I just felt like I had to be perfect.”

Read the full story.

This blog originally appeared in aflcio.org on June 4, 2016. Reprinted with permission.

Kenneth Quinnell is a long time blogger, campaign staffer, and political activist.  Prior to joining AFL-CIO in 2012, he worked as a labor reporter for the blog Crooks and Liars.  He was the past Communications Director for Darcy Burner and New Media Director for Kendrick Meek.  He has over ten years as a college instructor teaching political science and American history.

This Veterans Day

Wednesday, November 11th, 2015

grace baehrenThis Veterans Day we’d like to take a moment to thank all veterans for their service and sacrifice for our country. In turn, we’d like to make sure that veterans are aware of their rights in the civilian workplace. At the federal level, the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) is the main source of protections for veterans in the civilian workplace.

USERRA has two main goals:

  • To ensure that veterans seeking civilian employment can do so free from discrimination because of their service; and
  • That should a veteran need to take military leave — or is activated from reserve to active duty status – they can retain their civilian employment and benefits.

Generally, a veteran is eligible for USERRA benefits if they left a civilian job to perform military service and:

– Have given prior written or verbal notice of the military leave to their civilian employer;

– Have 5 years or less of cumulative service during the employment relationship with the civilian employer;

– Have been released from service under conditions other than dishonorable;

– And return to work, or apply for reemployment, at their civilian job in a timely manner after the completion of service.

For more information on veterans’ rights under USERRA and how to enforce these rights, see our page on military leave.

Additionally, it is important to know your state’s laws on military leave. While some state laws merely reinforce the USERRA benefits, others include additional benefits for veterans. To view the applicable laws for your state, see our State Laws on Military Leave page.

Finally, veterans should be aware of the Vietnam Era Veterans’ Readjustment Act (VEVRAA), which provides additional protections to “protected veterans” who are employed by federal contractors. Protected veterans are defined to include disabled veterans and veterans who are recently separated (are within the initial 3 year period after discharge or release from active duty). VEVRAA makes it illegal for federal contractors to discriminate against protected veterans in employment decisions and further requires that federal contractors take affirmative action to recruit, hire, and promote protected veterans. For more information on VEVRAA see this fact sheet from the Department of Labor’s Office of Federal Contractor Compliance Programs.

About the Author: The author’s name is Grace Baehren. Grace Baehren is a student at The University of Hawaii’s William S. Richardson School of Law and an intern at Workplace Fairness.

Read our lips: Americans want to expand Social Security - not to raise the retirement age

Sunday, October 25th, 2015

seiu

The recent presidential debates reminds us that Democrats and Republicans are polar opposites when it comes to Social Security.

While many of the Democratic candidates want to bolster the program and increase benefits, GOP candidates Chris Christie, Ben Carson, Jeb Bush and Marco Rubio have all called for cutting Social Security’s modest benefits by raising the retirement age.

Raising the retirement age may not be a big deal for the wealthy Americans who finance political campaigns or even politicians proposing these cuts. However, it would have a devastating impact on Americans who live paycheck to paycheck, including Patricia Walker of Tampa, Fla.

“For me as a home care worker, I couldn’t work until 70. I already have problems with my knees. I’m already trying to make it,” says Walker, who’s in her early 50s.

Although she works long hours, Walker’s low wages prevent her from being able to purchase a car let alone save money for her golden years. Social Security will be her only plan for retirement.

If Walker and other working Americans apply for Social Security’s retirement benefits before they reach the full retirement age, their benefits will be permanently reduced. For example, when someone retires at age 62, their benefit would be about 25 percent lower than it would be if they waited until they reach full retirement age.

This is a Social Security cut Republican presidential contenders seemingly want to avoid discussing while on the campaign trail.

These same candidates also seem to be ignoring the voices of voters who want lawmakers to expand Social Security; not cut its already modest benefits.

A 2014 poll from the National Academy of Social Insurance found 69 percent of Republicans, 84 percent of Democrats and 76 percent of independent voters support Social Security and they don’t mind paying higher taxes to preserve benefits for future generations. The poll also found 71 percent of Republicans, 79 percent of Democrats and 70 percent of independent voters oppose raising the full retirement age to 70.

Republicans calling for raising the retirement age may be willing to ignore the fact that income levels and life-expectancy rates remain stagnant for the poor as well as the needs of nurses, home care providers, construction workers and others with strenuous jobs that would suffer under their proposal.

One thing any presidential candidate can’t ignore is the retirement crisis looming over the United States. Our country’s next president must be willing to put ideology aside and focus on policies to deliver retirement security to more workers. That includes increasing Social Security benefits, especially for low- and middle-income workers.

Wonder what your full retirement age will be or how your monthly benefits may be reduced if you retire before your full retirement age? Click here.

This article was originally printed on SEIU in October, 2015.  Reprinted with permission.

Thousands rally for growing movement

Tuesday, October 13th, 2015

seiuThousands of SEIU janitors are traveling to the City of Brotherly Love today to hold a massive rally in support of nearly 75,000 east coast janitors who are negotiating fair wages and benefits this fall. Across the country, thousands more are stickering up in their worksites and marching in the streets to fight for $15 and to #RaiseAmerica with good jobs.

This rally is the latest escalation in a nationwide movement to raise our communities by standing together for good jobs.

Already this year, janitors have won historic wage and job improvement increases. In March 2015, thousands stood in solidarity with Chicago and Cleveland, as they negotiated their contract, and in June we rallied again in solidarity with Detroit and Washington D.C.

More than 50% of janitors with new contracts will make more than $15 an hour by the end of this next contract. And each city has won important additional standards, like increased sick days, full-timing of work, strong non-discrimination language, and protecting employer-paid healthcare.

And we’re not done yet. 130,000 members are standing strong for our east coast brothers and sisters today. In 2016, we’re taking the fight back out West – to Minnesota and LA, Houston, Seattle and Denver. And we’re supporting our brothers and sisters in airports, security, industrial laundry, home care, child care, and in fast food.

We fight because we know our country can do better. We fight because the communities we live in are still fighting for $15 and the right to form a union. We’ve won for working people before, and we will win again. We will keep fighting until every working person in America has $15 and union rights.

This article was originally printed on SEIU in October, 2015.  Reprinted with permission.

Workers at Trump Taj Mahal Begin Preparations for Strike

Tuesday, September 1st, 2015
Mario VasquezUNITE HERE Local 54 members speak to the press outside of their “strike pod.”

While Donald Trump’s push for the Republican nomination for president is showing no signs of slowing, worker unrest at a hotel and casino that bear his name appears near the boiling point. Strike preparations have begun for over 1,100 non-gaming casino employees at the Trump Taj Mahal in Atlantic City, New Jersey. The workers, represented by UNITE HERE Local 54, gathered near their local headquarters last Tuesday to load strike materials like bullhorns, signs and drums into a storage container in a public attempt to prove to management that they are ready and willing to strike over large compensation package cuts that occurred last year.

The Trump Taj Mahal has been at the mercy of billionaire investor Carl Icahn since 2009, when bankruptcy led Donald Trump to cut ties with the casino and resort’s operator, Trump Entertainment Resorts. After months of courtroom drama, Trump exchanged the rights to his name and likeness over to Icahn (who Trump has mentioned in recent months as a possible cabinet member if he were elected president) in exchange for a 10 percent stake in the restructured company.

While Trump has run into his own problems in Las Vegas, where workers at his current gaming jewel, the Trump Casino, have started a union drive (though Trump is adamant that his workers love him), conditions at his namesake in Atlantic City have deteriorated into escalated conflict between new management and the organized hotel housekeepers, bartenders, servers, cooks, and sanitation workers at the Trump Taj Mahal.

Since Icahn began his attempt to gain control of Trump’s Atlantic City gaming empire, the unionized workers at the Trump Taj Mahal have consistently derided Icahn’s alleged role in driving the casino-hotel toward bankruptcy, with workers and UNITE HERE arguing that Icahn, as Trump’s main debt holder, pushed higher interest rates onto the company as a way to reach personal profit of hundreds of millions of dollars and ultimately maneuver into ownership position.

In October 2014, Icahn successfully gained permission from a bankruptcy judge to end company contributions to health care and pension benefits as a way of cost-cutting, saying it would help keep the casino-resort open. “Workers were stripped of their health and retirement benefits; they even cut paid lunch breaks. Our calculation was that the average full-time worker would lose approximately $12,000 over the course of the year as a result of these cuts,” says UNITE HERE spokesperson Ben Begleiter.

UNITE HERE Local 54 contends that the bankruptcy court was out of its jurisdiction with the decision, and because Icahn has declined to renew the union’s contract since its expiration in September, the matter is a labor dispute fit for the NLRB, who has since agreed in a January statement. The union’s case against the cuts is currently pending in the U.S. Court of Appeals for the Third Circuit.

A survey of workers conducted by UNITE HERE in March found that 44 percent of responding workers, who had previously been covered under a health care plan since their first day of employment, no longer had health insurance. This was a much-valued health care package that had led workers over the past decade to accept near-stagnant wages in order to maintain their health benefits.

“I’ve been part of the negotiating committee for the past 11 years, and I voted to have my pay frozen numerous times in order to preserve our health insurance. I got one 25-cents-an-hour raise in the past decade,” says Paul Smith, a surveyed cook, who has been at the site for 21 years. “In 2005, I had a massive heart attack. The bill was over $1 million. If I hadn’t had the union health insurance, I would have been destroyed financially. Right now, my health is out of whack. I need three surgeries, which is difficult because I have no insurance since Icahn took it away.”

The survey also claimed to shed light on the mental toll of out-of-reach health care, finding that at least 70 percent of participating workers suffered from symptoms of depression at least every other day.

Dr. Alan Glaseroff, Co-Director of Stanford Coordinated Care and Clinical Professor of Medicine at the Stanford School of Medicine, reviewed the results and commented: “Strictly from a financial perspective, depression as an ‘add-on’ condition combined with diabetes, heart disease and other chronic conditions more than doubles the cost of treating those illnesses, making the lack of coverage an even greater problem for patients and those paying for and providing their care.”

When the October cuts were announced, 24 people were arrested staging a sit-in and shutting down traffic in front of the Trump Taj Mahal. In June, 68 more were arrested for participating in a similar action. Workers authorized the union’s contract negotiating committee to a call a strike if necessary on July 16, a decision that was followed up by reports that the Trump Taj Mahal was preparing to take on several hundred replacement workers.

Casino-hotel employees in Atlantic City last went on strike in 2004 when 10,000 UNITE HERE Local 54 members walked out for over a month at seven different locations; Trump’s casino-hotels workers did not participate in this strike. The Trump Taj Mahal and the Tropicana Entertainment, Icahn’s other bankruptcy capture in Atlantic City, are currently the only casino-hotels in the city working with an expired contract. The possibility remains open for Local 54 members at Tropicana to go on strike as well.

Workers like Hannah Taleb, a casino-hotel employee in Pittsburgh, allege that Icahn’s hardball tactics are an effort to lower workers’ standards throughout the industry. “If the standards are lowered in Atlantic City, how can I expect to fight for high standards in my city? All casino workers are linked in that way,” Taleb told the Press of Atlantic City before being arrested in June’s intersection-shut-down.

Icahn has a history of eliminating worker benefits at various companies he’s acquired over his years, building a reputation of as a corporate raider. “Mr. Icahn is worth more than $20 billion, but two months before the contract for PSC’s union workers was scheduled to expire in late 2013, management told them that it was dropping their health insurance benefits and that they would have to buy their own insurance through the new exchanges set up under the Affordable Care Act,” the New York Times reported last December. Unsurprisingly, Icahn was the one of the inspirations for the Gordon Gecko character made famous by Michael Douglas in Oliver Stone’s Wall Street.

“Jobs that provided benefits, that were middle-class jobs where a worker could support a family on [are] part of the promise of casino gaming,” Begleiter says. “Casino gaming in Atlantic City is unlike any other industry in the state, because it’s an industry that came into existence by a vote of the people of New Jersey to change the constitution—specifically to rebuild Atlantic City. That means in part, making sure that it provided for workers,” Begleiter says.

As the protests expand and the so-called “strike pod” storage container is filled up with the essentials, the workers at Trump Taj Mahal say they are ready to defend their share of that promise.

This blog was originally posted on In These Times on August 31, 2015. Reprinted with permission.

About the Author: The author’s name is Mario Vasquez. Mario Vasquez is a writer from Santa Barbara, California. You can reach him at mario.vasquez.espinoza@gmail.com.

Lawmakers Unanimously Approve Country’s Most Robust Paid Sick Leave Law

Thursday, June 25th, 2015

Bryce CovertThe Montgomery County, Maryland council voted unanimously to pass a paid sick leave bill on Tuesday, making the town the 23rd place in the country to enact such a requirement.

The law is one of the most robust to be passed at the city or state level so far. “The Montgomery County paid sick days laws is one of the strongest yet, and it should serve as a model for the state of Maryland and the nation,” said Charly Carter, director of Maryland Working Families.

Once it goes into effect in October 2016, around 90,000 people will get the right to a day off when they get sick that they currently don’t have. Employees at businesses with five or more workers will be able to earn up to seven days off a year, while those at companies with fewer workers can earn four paid days and three unpaid. Many current laws in other places exempt smaller businesses completely. Amendments to exempt people under the age of 18, people who work fewer than 16 hours a week, and smaller employers all failed.

Montgomery County’s leave can also be used for a wide variety of purposes beyond taking a day off for a worker’s own illness: to care for a sick family member, to deal with a public health emergency, or to deal with domestic violence, sexual assault, or stalking.

A statewide bill in Maryland has been introduced but not yet passed, although it will be re-introduced next session, according to Working Matters, the group organizing support for paid sick leave in the state. While the country still doesn’t have a national requirement that employers offer their workers paid sick leave, unlike all other developed nations, many local governments have taken action on their own. With Montgomery County, four states and 19 cities have passed laws.

paid-sickleave-infographic-june

CREDIT: Andrew Breiner, ThinkProgress

Without a federal law, however, about 40 percent of America workers don’t have the ability to take paid time off when they or their family members get sick, the majority of them low-income workers who may not be able to afford an unpaid day. President Obama has called to change that, and Democratic lawmakers have introduced bills that would require all of the country’s to offer sick leave, but they haven’t moved forward.

While businesses often claim that they can’t afford to offer paid sick leave, the evidence from many of the places that have passed requirements is that the laws don’t represent an economic burden. In Connecticut, Jersey City, and Washington, D.C., employers don’t report that the laws have been costly or difficult to comply with, while some have seen benefits like decreased turnover and increased productivity. Meanwhile, job growth in Connecticut, San Francisco, and Seattle has been stronger after their laws took effect, and a majority of employers in many of these places now support the laws.

But the opposition has gained ground in other places. Ten states have passed laws that ban cities and counties from passing their own paid sick leave laws, and others are considering the same move.

This blog was originally posted on Think Progress on June 24, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

California Labor Ruling Deals A Blow To Uber’s Strategy For Denying Drivers Benefits

Friday, June 19th, 2015

AlanPyke_108x108Uber must pay its drivers benefits, overtime, working expenses, and other standard compensation that the company has thus far avoided providing, the California Labor Commission has ruled.

The decision is not self-executing across the state and can only be directly applied in one specific driver’s case. But it signals to the company’s other employees that the body charged with adjudicating California labor law views Uber to be an employer with all the obligations that come with the label. Uber notes in a statement that the same commission had ruled the opposite way in a 2012 case, and that neither of those rulings would be binding in any other individual lawsuit over similar complaints by other drivers.

The ridesharing start-up, whose market value recently hit $50 billion, has relied upon paying drivers as though they were independent contractors rather than employees. Classifying a worker as a contractor negates most provisions of federal labor law, saving an employer thousands of dollars per year for each person they treat as a contractor.

If a company treats a contractor like an employee by exerting substantial control over day-to-day job activities, though, it risks being found guilty of misclassifying workers. Misclassification is a widespread problem, with complaints popping up everywhere from trucking to strip clubs to beauty parlors.

In California, Uber argued that its relationship with drivers is not controlling enough to constitute an employer-employee relationship, pointing out that they don’t set drivers’ hours or require a minimum number of trips in a shift. But California’s definition of the line between employment and contract work is primarily based on whether the worker is providing a service that’s integral to the main line of business of the company paying her. Labor commission lawyers examined Uber’s policies for drivers and overall business model and found the company’s argument weak.

“Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that defendants are involved in every aspect of the operation,” the commission ruled. By vetting would-be drivers, requiring them to register their vehicles with Uber, and terminating them if their approval ratings dip too low, the state found, Uber positioned itself as an employer rather than a non-controlling party to a contract.

The case that generated the ruling will only cost Uber about $4,000 in reimbursement payments to a driver named Barbara Ann Berwick. But its consequences could be much grander. If it cannot successfully appeal the finding, it will have to choose between fielding further individual lawsuits or reclassifying all its California drivers as regular employees to pre-empt the suits. That means paying unemployment insurance and other payroll taxes that aren’t triggered for contractors, as well as potentially being subject to overtime rules and made to reimburse drivers for work expenses like gas, tolls, and some traffic tickets.

Any multi-billion-dollar corporation should theoretically be able to absorb such costs. But they threaten to turn Uber into a much smaller-margin enterprise, one more akin to the traditional taxi company business model that the firm has made so much money disrupting. And because Uber’s market value is a fluid, on-paper number that depends on investor confidence and market analyst’s reading of the economic tea leaves, the California ruling could lead to some shrinkage in the car service’s worth and ability to raise private funds.

The ruling isn’t the end of the story, either. There are other civil cases outstanding in California and elsewhere that touch on similar issues and could be decided differently. And the sheer variety of different driver experiences, from people who drive a few hours a week for supplementary income to those who log long hours in vehicles leased from the company itself, suggests that it’s hard to pin down the entire category of workers with either the “employee” or “contractor” label that the law provides.

This blog was originally posted on Think Progress on June 17, 2015. Reprinted with permission.

About the Author: The author’s name is Alan Pyke. Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.

This Restaurant Pays A $15 Hourly Wage With Health Insurance, A Retirement Plan And Paid Leave

Monday, June 15th, 2015

Bryce CovertJen Piallat, the owner of Zazie in San Francisco, knows what it’s like to work in the American restaurant industry. “I worked on the restaurant floor for 30 years before I owned my own,” she said. “I didn’t have savings or health insurance until I was 35.”

The story is very different for her employees today. She had already offered them 401(k) plans with a match, fully funded health and dental insurance, and paid sick leave. And now she’s gone even further, getting rid of tips in favor of increasing pay and offering even more benefits.

At the beginning of the month, the restaurant increased its prices across the board by about 20 percent. She noted some restaurants that have done away with tips have added a mandatory service charge at the bottom of the check instead. “I didn’t want to do that,” she said. “I like the all-inclusive model…of everything, not just service, not just a tip, it’s also full benefits.”

Her servers’ wages, which were already about $15 an hour, will now raise by 2 to 3 percent. But those who work in the “back of the house” in the kitchen or busing tables will get at least a 30 percent increase. Servers will also get a share of profits, receiving 11 percent of their individual sales every day on top of their wages.

And while she offered paid family leave on an informal basis, she said she’s now added it officially to the books. “We have basically full benefits,” she said.

She anticipates the changes will make a big difference for her employees. “Housing is so expensive here,” she noted. Housing costs in San Francisco are up 6 percent over the last year and have risen in some neighborhoods by 50 percent over the last decade. Three years ago, she says, all of her staff lived in San Francisco proper, but now at least a third live outside the city. She also noted that most restaurant workers have no savings, just as she didn’t before opening her own up. But she says that combined, her employees have over $1 million in their 401(k) plans.

Her employees are enthusiastic about the changes. “One of my servers who had been reticent about it said, ‘Can I hug you, I feel great about it,’” she said. After the first day without tips, servers realized that they had more time freed up because they didn’t have to keep track of credit card slips and enter their tips into the computer system. And they’re able to treat customers better as well. One served a table of people with French accents, notorious for low tips given that tipping isn’t customary in Europe, but didn’t feel the pressure to serve other tables better because she might get a better tip. “She said it’s so nice to be totally welcoming and friendly to them and not have to have any concern,” Palliat said.

There is a chance she’ll end up losing money in the new system. “I’m five percent concerned,” she said. She’ll also have to pay more in taxes because what servers used to make in tips, which doesn’t get reported, will now be reported income. But she says it’s still worth it. “I don’t have a problem making a little less to even things out, make it a little more equitable,” she said. Plus the restaurant might benefit from slightly less business: she noted that there’s a consistent two-hour wait on weekends, which she’d like to bring down and might achieve it through people being turned off by higher prices.

She’s going to keep a close eye on profits. But, she said, “I’m definitely not going to ever decrease [the staff’s] percentage… If in six months our profit level has bottomed out, we’ll just have to increase prices.”

By doing away with tips in favor of a living wage, Palliat joins a movement of sorts. It began in high-end restaurants in New York and on the West Coast, but now has spread to lower tier restaurants in Philadelphia, Kentucky, Pittsburgh, St. Paul, Minnesota, and Washington, D.C. While Americans think that our system is a way to reward good service, research has found that in reality tips vary little based on a customer’s experience. Instead, they tend to change more based on appearance and race.

Being compensated through tips can also mean financial hardship for a lot of servers. It means they can be paid a lower minimum wage — the federal tipped minimum wage is just $2.13 an hour. While restaurant owners are supposed to make up the difference if tips don’t bring pay up to at least $7.25 an hour, many don’t. So people who work for tips end up twice as likely to live in poverty.

This blog was originally posted on Think Progress on June 11, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

 

The Grocery Store That Competes With Walmart Prices And Is Beloved By Employees

Friday, May 22nd, 2015

Bryce CovertThis week, Wegmans, a family-owned grocery store chain, announced it would open its first location in New York City.

The announcement prompted an outpouring of devotion for the company. The New York Times noted it can actually claim a “cult following.” Part of the devotion to the store is not just that it manages to have a huge selection while offering prices that can compete with Walmart, but that it does it while treating its employees well.

The perks start with pay, which for hourly store employees is a little more than $33,000 a year on average. By contrast, Walmart has admitted that more than half of its employees make less than $25,000 a year, although it recently announced a wage increase, and retail sales workers make a median $21,410 annual salary. Anonymous pay sites like Glassdoor and Payscale also show that a Wegmans cashier can expect to make more than $9 an hour, on average.

But that’s not what makes the company famous for employee satisfaction, landing it on Fortune’s 100 Best Companies to Work For list every year since the list began. It also offers generous benefits. It pays about 85 percent of the costs of health care coverage, including dental, for its full-time employees and offers insurance to part-time workers who put in 30 hours a week. It offers 401(k) plans with a salary match of up to 3 percent of an employee’s contribution.

And it has a scholarship program that awards tuition assistance to employees, which has paid out $100 million to 32,000 employees since it began in 1984. The program gives part-time employees up to $1,500 a year and full-time employees up to $2,200 a year to study at any college in any field. Starbucks’s lauded scholarship program, by contrast, used to only be for studying careers that directly prepared employees for working at Starbucks and now is only applicable for studying at Arizona State University. The share of companies offering employees college assistance has been trending downward.

Wegmans also offers more work/life balance than most retail jobs. It gives employees 11 days of paid vacation and holidays and three extra days of paid time off. It’s known for flexible scheduling, a perk that regularly tops surveys of its own workforce as the most important benefit offered. Managers have the power to craft their own schedules and work with employees’ needs, and many workers use an online system to lay out their availability around their own schedules. In retail at large, on the other hand, more than a quarter of workers report irregular and unpredictable scheduling like being made to be on call or working two shifts in one day. Nearly 40 percent of retail workers in New York City say they don’t have a set minimum of hours week to week.

These benefits aren’t just altruistic. The company generates $7.1 billion in revenue and is profitable. “When you think about employees first, the bottom line is better,” the company’s vice-president for human resources has said. The company boasts a 5 percent turnover rate among full-time employees, compared to a 27 percent rate for the industry. That comes with a cost, as it often eats up about 20 percent of a worker’s salary to replace him.

“What some companies believe is that you can’t grow and treat your people well,” says a senior vice president. “We’ve proven that you can grow and treat your people well.”

This blog was originally posted on Think Progress on May 14, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

Your Rights Job Survival The Issues Features Resources About This Blog