Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘wage theft’

Republicans Repealing A Rule To Stop Wage Theft? It’s Who They Are

Friday, March 10th, 2017

Who could be against rules that try to protect workers from having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations? See if you can guess who.

Last August, President Obama implemented a ‘Fair Pay And Safe Workplaces’ executive order that aims to stop companies from getting federal contracts if they violate labor and civil rights laws, steal workers’ wages and risk their health and safety. Actually, it just says the government will take violations into consideration, and yes, he waited eight years to implement this.

So of course, Republicans being who they are, have now voted in the House and Senate to repeal this act, exposing workers once again to having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations.

Obama’s executive order also required companies bidding on federal contracts to disclose if they had been busted for violating federal and state labor laws. Government procurement officers would then try to work with these companies to come into compliance with the laws and could deny contracts if they refused to.

That kind of government meddling against corporate wage theft and health & safety violations was just too much for Republicans. On February 2, the House voted 236 to 187 to get rid of this rule. Three “Democrats” voted with Republicans to protect corporate wage-stealers: Jim Costa (CA 16), Luis Correa (CA 46) and Henry Cuellar (TX 28).

Remember those names, and if you live on one of those districts click this and consider running for office yourself.

On March 6, the Senate voted 49 to 46 to repeal, the Fair Pay and Safe Workplaces act, with all Democrats voting on the side of protecting workers, and all Republicans voting on the side of protecting corporate wage-stealers.

This bill is waiting for President Trump to sign or veto it. Will Trump, who campaigned on the side of working people, sign this repeal of an act that tries to protect workers from having their pay stolen, having their health and safety put at risk and being subjected to civil rights and labor law violations? Heh.

This post originally appeared on ourfuture.org on March 9, 2017. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Wage Theft Against Immigrants Threatens All Working People

Tuesday, November 22nd, 2016

wage-theft-against-immigrants-threatens-all-working-people_blog_post_fullwidthThe United States holds sacrosanct the principle that regardless of who you are, or where you come from, your hard work will be rewarded.

For day laborers in America, at least half of whom report experiencing wage theft, this ideal rings hollow. In a country so expansive and so diverse as America, there must be mechanisms in place to ensure the principle of getting paid for the work you do is a reality for everyone.

Take my story, for example. After a hard day’s work, when I asked for my earned wages, my employer refused to pay me. He went on to call the police and falsely accused me of attempting to rob him with a knife. After a police investigation, it was clear I was a victim of extortion and false charges. However, since I didn’t have the proper documentation, I was placed in deportation proceedings, which I am still fighting to this day.

Immigrant workers like me are struggling to provide for our family, yet have to work extra to organize with other workers, and to get informed about our rights to make sure we are not being exploited or robbed of our wages. Many of us who search for work on the street corners face very difficult situations on a daily basis. Not only do we receive insults by passerby, but employers themselves often try to undercut us simply because they think that we are not organized and have no support. As we continue to organize, we have developed power as working people and have had significant victories as well.

I know firsthand the confusion, humiliation and helplessness felt by those who have been robbed or shortchanged by their employers. This can happen to anyone. Only a few months ago, we learned cafeteria staff for the U.S. Senate faced issues of wage theft, too. Their fight was very important because they are helping to create a just workplace for all of us. Such a significant victory has waves of impact that reach other parts of the country and inspire many of us to continue to struggle for justice.

The U.S. Senate cafeteria workers’ encounter with wage theft is very typical of what occurs to other working people across the country, but for day laborers and immigrants like myself, our encounters with wage theft go beyond the denial of earned wages. Because of the inherent isolation of our work, and the irregularity of our schedules and employers—with the added issue of growing xenophobia and racism directed at Latino immigrants—we are seen as easy targets for bad employers, and often experience threats of deportation or get falsely accused of wrongdoing.

Many of us have to battle every day to stop employers who want to undercut us. Most of the time we have to work and struggle to get our employers to even pay us for the hours we’ve worked. The institutional protections that we have are often limited, and sometimes it feels like they are nonexistent.

Most workplaces are not the Senate cafeteria. Day laborers throughout the country are experiencing wage theft every day. The Department of Labor and national politicians must recognize our plight and devote the necessary resources to stop this epidemic of wage theft. Though we will continue to organize and fight for justice, it is necessary for the institutions created to hold up the labor protections to benefit all workers.

This blog originally appeared in aflcio.org on November 21, 2016.  Reprinted with permission.

Jose Ucelo is a day laborer and immigrant worker.

Think It’s Tough for Labor Now? Just Wait Until Trump Takes Office in January

Friday, November 18th, 2016

photo_321703[1]In 63 days, organized labor is going to find itself in a new political reality, which it seems totally unprepared for. Donald Trump will be president; the Republicans will control the House and Senate and one of Trump’s first tasks will be to nominate a new Supreme Court justice. Though Trump was tight-lipped about specific policy proposals, his campaign and the current constitution of the Republican party do not bode well for labor.

Trump’s actions will largely fall into one of four categories: judicial, legislative, executive and at the level of federal agencies. Each potential move will take various levels of cooperation from other branches of government and varying amounts of time to complete.

On Day 1 of his new administration, President Trump can simply rescind many of Barack Obama’s executive orders that benefited large groups of workers. Chief among these were EO 13673, which required prospective federal contractors to disclose violations of state and federal labor laws, and helped protect employees of contractors from wage theft and mandatory arbitration of a variety of employment claims. Similarly, EO 13494 made contractor expenses associated with union busting non-allowable, thereby helping to ensure that workers can exercise their labor rights.

At the agency level, Trump will have the opportunity to fill vacancies on the five-person National Labor Relations Board (NLRB), effectively turning what has been one of the most pro-worker boards in recent memory into one that is more concerned with employers’ interests. The NLRB is one of the more politicized federal agencies, and it is not uncommon for a new NLRB to overturn a previous board’s rulings. A conservative board would put into jeopardy recent gains, including the requirement of joint employers to bargain with workers, the rights of graduate students to form unions, the rights of adjuncts at religious colleges to form unions and the protections from class action waivers in employment arbitration agreements, which effectively block access to justice for too many.

Similarly, Trump can immediately dismiss the entire Federal Service Impasses Panel (FSIP) and appoint his own members. The FSIP is a little-known federal agency that functions like a mini-NLRB to resolve disputes between unionized federal employees and the government.

Donald Trump may be able to not only roll back many of Barack Obama’s accomplishments, but also change the face of labor law for decades to come. (AFL-CIO/ Facebook)

Donald Trump may be able to not only roll back many of Barack Obama’s accomplishments, but also change the face of labor law for decades to come. (AFL-CIO/ Facebook)

At the legislative level, various anti-worker bills sit ready for a GOP-led push. Perhaps chief among them is the National Right to Work Act, which would place every private sector employee (including airline and railway employees currently under the Railway Labor Act) under right-to-work. Right-to-work is the misleading law that prohibits unions from requiring that workers represented by the union pay their fair share. Such a bill was introduced last year by Sen. Rand Paul, and it had 29 co-sponsors, including Senate Majority Leader Mitch McConnell. Trump announced on the campaign trail that his “position on right-to-work is 100 percent,” so this will likely be an area where he has common cause with the GOP-controlled Congress.

At the judicial level, there is also a strong possibility that we will see a sequel to the Friedrichs case at the Supreme Court. Friedrichs was widely anticipated to bar fair share fees and place all public sector employees under right-to-work, but ended in a deadlock after Justice Antonin Scalia’s death. It is likely that any Supreme Court justice that Trump chooses will be as critical of fair share fees as Justices Samuel Alito and John Roberts, and would provide a critical fifth vote in changing long-standing precedent regarding the allowance of such fees. Groups like the National Right to Work Committee and Center for Individual Rights often have cases in the pipeline that could be pushed to the Supreme Court when the opportunity arises.

Similarly, at the judicial level, Trump will likely have his Department of Labor drop appeals to court decisions that enjoined or overturned pro-worker rules, such as the rule requiring union-busters to disclose when they are involved in an organizing campaign. Dropping the appeals would be an easy route to kill the rules, rather than going through a more time consuming rulemaking process to rescind them.

All indications are that labor has been caught unprepared for a President Trump and a GOP-controlled Congress and Supreme Court. With such broad control over every branch of government, Trump may be able to not only roll back many of Obama’s accomplishments, but also change the face of labor law for decades to come.

This post originally appeared on inthesetimes.com on November 17, 2016.  Reprinted with permission.

Moshe Z. Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book Why Labor Organizing Should be a Civil Right.

L.A. Port Strike Today Over Federal Contractor Wage Theft

Thursday, November 3rd, 2016

dave.johnson

 

“An order that creates a culture of legal compliance could have a transformative impact on American industry.” George Faraday, Legal and Policy Director at Good Jobs Nation

 

Truck drivers and warehouse workers working for federal contractors at the Port of Los Angeles are striking for 48 hours to draw attention to wage theft and other violations. These workers work for companies that contract with the federal Department of Defense. They say they have been misclassified as “independent contractors”, had their wages stolen and have been retaliated against for exercising the right to organize.

The workers are doing this because President Obama’s Fair Pay & Safe Workplaces Executive Order protecting low-wage workers on federal contracts from wage theft and other labor law violations takes effect today. Contractors are supposed to start reporting whether they are found in violation of wage theft and other labor laws and regulations. Later the government can use this information in the decision process for awarding contracts.

On a press call discussing today’s strike, Jaime Martinez, a port worker, explained that he has worked for K&R, a federal contractor, for 19 years. “We are on strike today for issues including respect and and wage theft. We earn very low wages, with no benefits and no workers compensation because we are classified as independent contractors.”

Obama’s Fair Pay and Safe Workplaces Executive Order

July’s post, Obama’s ‘Fair Pay and Safe Workplaces Executive Order’ explained,

President Obama’s executive order cracks down on federal contractors who break hiring, health and safety, and wage laws. It also prohibits employers from requiring mandatory arbitration agreements with employees of federal contractors, in order that workers can get their day in an actual court instead of being forced to appear in front of an arbitrator picked and paid for by the company when there is a dispute involving the Civil Rights Act or related to sexual assault or harassment.

Specifically, the new rules require companies that bid on federal contracts to disclose wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights violations from the prior three years. Federal contractor hiring officers are to take serious violations into account before awarding contracts. These officers will be issued guidelines on whether certain violations “rise to the level of a lack of integrity or business ethics.”

This Is A Big Deal

According to Good Jobs Nation this will affect a large number of workers around the country,

  • A U.S. Senate investigation revealed that federal contractors were responsible for nearly one-third of the largest U.S. Department of Labor penalties for wage theft and other legal violations;
  • A report by the National Employment Law Project found that 1 in 3 low-wage federal contract workers are victims of wage theft; and
  • An analysis by the Government Accountability Office showed that known legal violators have continued to receive lucrative federal contracts because of lax government oversight and enforcement.

“Creates A Culture Of Legal Compliance”

Companies with federal government contracts employ 1 in 4 American workers. Thanks to this executive order they will have to demonstrate a record of labor law compliance, including wage and hour and health and safety laws. On the press call discussing today’s strike Good Jobs Nation’s Legal and Policy Director George Faraday said, “An order that creates a culture of legal compliance could have a transformative impact on American industry.”

Fair Pay Hotline And Website

Also today, Good Jobs Nation is launching the first-ever national legal hotline – 1-844-PAY-FAIR – for federal contract workers to report law-breaking. Information is also available at goodjobsnation.org/payfair,

If you are a worker on a federal contract and you believe that are not receiving the pay and benefits owed to you under federal laws – like the Service Contract Act or the Davis Bacon Act – contact Good Jobs Legal Defense at 1-844-PAY-FAIR or click below.

This post originally appeared on ourfuture.org on October 25, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

 

McDonald's settles with franchise workers for $3.75 million in wage theft lawsuit

Tuesday, November 1st, 2016

LauraClawson

McDonald’s is still insisting it isn’t a joint employer of workers in franchise restaurants, but even so, it’s paying out millions to settle a lawsuit over labor law violations by a franchisee:

In a filing in U.S. district court in San Francisco on Friday, lawyers representing about 800 employees at five restaurants owned by a single franchisee said Illinois-based McDonald’s would pay the workers $1.75 million in back pay and damages and $2 million in legal fees. […]

The 2014 lawsuit claimed McDonald’s and the franchisee, Smith Family LP, violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms. The franchisee previously settled the claims for $700,000.

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McDonald’s exerts tight control over how its franchisees do things it cares about. That happens not to include little things like obeying labor laws—but because McDonald’s control over how its franchisees do business is so well established, the National Labor Relations Board is moving toward treating McDonald’s as a joint employer. This settlement doesn’t settle that question, but at least these workers are getting a measure of justice.

This article originally appeared at DailyKOS.com on October 31, 2016. Reprinted with permission.

Laura Clawson is a Daily Kos contributing editor since December 2006. Labor editor since 2011.

 

Inequality Is Still the Defining Issue of Our Time

Monday, October 17th, 2016
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In 2011, President Obama, speaking in the wake of Occupy Wall Street, called inequality the “defining issue of our time.” Now Jason Furman, chair of the Council on Economic Advisors, argues that Obama “narrowed the inequality gap” more than any president in 50 years. The nonpartisan Congressional Budget Office echoes the observation that income inequality after taxes is no higher than it was in 2000, and that Obama’s policies have done more to reduce inequality than any other policies on record.

Don’t take down the barricades. Inequality remains extreme and continues to widen. And the populist uprisings that have roiled American politics have clear opportunities to tackle the core problem after the election.

As James Kwak at Baseline Scenario notes, the council’s report measures Obama’s reductions against what inequality would have been if George Bush’s policies had been sustained through the Great Recession. The progress comes largely from progressive tax changes. Obama raised taxes marginally on the very wealthy (allowing the Bush tax cuts to expire for very rich, particularly the 15 percent tax on capital gains, and taxing investment income under Medicare to help pay for health care reform) and increased tax subsidies to low-wage workers (expanded child tax and expanded earned-income tax credits.) These advances, while praiseworthy, don’t come close to reversing the regressive tax polices of the past decades.

As Emmanuel Saez has shown, the richest 1 percent continue to pocket the bulk of the rewards of growth. The income share of the top 1 percent before taxes fluctuates with the business cycle, but it has been rising over time. Despite recent increases, household income for the vast majority of the population has still not recovered from the Great Recession. These rewards largely reflect the underlying economic structures that determine what Jacob Hacker has dubbed predistribution (the pretax distribution of income): globalization, bargaining power of labor, executive pay structures, demand for skills, etc. As Kwak concludes, “It’s hard to point to anything [Obama] did that affected the underlying economic factors producing the increase in inequality.”

This elevates the importance of fierce political battles that will occur after the November elections. First, President Obama plans to join with the business lobby to push the Trans-Pacific Partnership Treaty through the lame-duck session of Congress. The TPP is another in the corporate trade and investment deals that have proved so devastating to American workers. Even trade-accord advocates now admit that our globalization strategy has contributed directly to growing inequality, putting American workers in competition with low-wage and repressed labor abroad, with no sensible industrial or comprehensive strategy for impacted communities and workers.

The mobilization against the TPP will engage the populist energies in both parties. Sanders’s new organization Our Revolution will join with labor and the bulk of the activist Democratic base to drive an intense opposition that will make the Tea Party look like, well, a tea party. If the TPP is defeated, the next administration will be forced to rethink America’s globalization strategies, moving toward more balanced trade, ending the special privatized investor arbitration system, and focusing attention on the tax traps and dodges that allow global corporations to evade hundreds of billions in taxes. Even if the TPP passes, the fury of the opposition could force an understanding that the old game is over.

Similarly, efforts to lift the floor under workers already in motion should gain new energy. The Republican House leadership won’t even allow a vote on hiking the minimum wage, but Fight for $15 and other movements are winning wage hikes in cities and states across the country. Measures to guarantee paid sick and vacation days and to crack down on wage theft and demand equal pay for women are beginning to move. These efforts—particularly at a time of relatively low unemployment—can help workers gain a greater share of the profits they help to produce.

Obama recently admitted that stronger unions are vital to redressing inequality. Yet he abandoned campaign promises to make labor-law reform a priority early in his administration and has refused to issue an executive order giving union employers priority in government contracting. Union support was central to Clinton’s victory in the primaries. When she takes office in January, activists should join with federal contract employees to demand issuance of a Good Jobs executive order that would encourage firms with federal contracts to respect labor rights. And Democrats at every level of executive office should be pushed to put government on the side of workers.

Finally, populist energy should be directed at curbing obscene CEO pay packages. Academics have exposed the fraudulence of “performance pay” bonuses. Investors bemoan the perverse corporate policies generated by executive efforts to drive up the value of their bonuses. Yet boardrooms haven’t got the message. It is time to turn up the heat. For example, executive compensation rules to discourage Wall Street risk-taking were supposed to have been written nearly five years ago. They haven’t been, and progressives in Congress led by Elizabeth Warren and Bernie Sanders should expose this outrage. Unions, public pension funds, and university endowments should use their votes to challenge excessive CEO compensation packages. Sanders’s Our Revolution might join with other progressive groups in challenging the worst abusers at their annual shareholders meetings.

Inequality remains a defining issue of our time. The advances made under Obama deserve applause, but the real work remains to be done. This presidential season has exposed the growing revolt against business as usual. Now activists must seize the opportunity to build on the energy after November.

This blog originally appeared in ourfuture.org on October 13, 2016. Reprinted with permission.

Robert L. Borosage is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future. The organizations were launched by 100 prominent Americans to develop the policies, message and issue campaigns to help forge an enduring majority for progressive change in America. Mr. Borosage writes widely on political, economic and national security issues. He is a Contributing Editor at The Nation magazine, and a regular blogger at The Huffington Post. His articles have appeared in The American Prospect, The Washington Post, The New York Times, and the Philadelphia Inquirer. He edits the Campaign’s Making Sense issues guides, and is co-editor of Taking Back America (with Katrina Vanden Heuvel) and The Next Agenda (with Roger Hickey).

Papa John’s Franchisee Faces Jail Time Over Stealing Workers’ Wages

Friday, July 17th, 2015

Bryce CovertOn Wednesday, the owner of nine Papa John’s franchises in New York City pled guilty to the first criminal case brought by New York Attorney General Eric Schneiderman against a fast food franchisee over wage theft.

According to court documents, including company records obtained by the attorney general’s office, Abdul Jamil Khokhar, the franchisee, and BMY Foods Inc. paid its 300 current and former workers the same base rate for any hours they worked after putting in 40 a week, which under law should be paid time-and-a-half. To get away with paying less, they allegedly paid overtime hours in cash and created fake names for the employees in the timekeeping system. They then filed fraudulent tax returns that left out the cash payments made to employees under the false names.

Khokhar’s sentencing is set for September 21, when he faces 60 days in jail. He also faces paying the employees $230,000 in back wages as well as an additional $230,000 in damages and $50,000 in civil penalties.

BMY Foods Inc. declined to comment. A Papa John’s spokesperson said in an emailed statement, “Papa John’s is aware of the recent incident involving one of our New York franchisees who was taken into custody this morning. These allegations do not reflect our position as a company. We have a strong track record of compliance with the law. We do not condone the actions of any franchisee that violates the law. This particular franchisee has divested itself of most of its restaurants and is in the process of exiting the system. We will continue to monitor the situation closely and take appropriate action.”

Jail time is unusual for people who perpetuate wage theft, but Schneiderman may not be done. “My office will not hesitate to criminally prosecute any employer who underpays workers and then tries to cover it up by creating fake names and filing fraudulent tax returns,” he said in a press release. “We will continue to be relentless in pursuing the widespread labor law violations, large and small, which we have found in the fast food industry.”

This isn’t the first time Schneiderman has gone after Papa John’s franchisees. In October of last year, he sued some in New York for allegedly stealing wages from more than 400 delivery drivers, seeking more than $2 million in backpay, damages, and interest. Then in February he won a nearly $800,000 judgement against another who allegedly ripped off employees.

He’s also focused on wage theft prosecutions in the New York fast food industry generally. In March of last year, he won a $448,000 payout from 23 Domino’s Pizza franchise owners and a nearly $500,000 one from a McDonald’s franchisee.

Wage theft, where workers aren’t paid minimum wage and/or overtime, are made to work off the clock, or are made to buy uniforms or equipment out of their own paychecks, is particularly rampant in the fast food industry. One poll found that about 90 percent of these workers have experienced at least one form of theft. But it’s also not limited to fast food. In 2012, at least $933 million was won in backpay by the Department of Labor, state labor departments, state attorneys general, and research firms. That sum dwarfs the less than $350 million taken in all robberies that year. Even that understates the extent of the problem, however, since many employees don’t file formal charges; it’s estimated that the country’s employers steal more than $50 billion from their employees every year.

Some places have taken steps to go beyond federal wage and hour laws to try to crack down on wage theft. On Wednesday, Jersey City, New Jersey unanimously adopted a law that would revoke city licenses from any company that doesn’t reimburse workers for lost wages, a step that has been taken in other places across the country. Other cities have upped the penalties for wage theft and enhanced enforcement measures.

This blog was originally posted on Think Progress on July 16, 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.

Workers Sue Walmart For Manipulating Employee Classification To Deny Them Overtime Pay

Friday, April 10th, 2015

Bryce CovertWalmart is facing a potential class action lawsuit over alleged wage theft in Alameda County Superior Court from an employee who claims the company illegally denied managers overtime pay.

Bonnie Cardoza, who worked at the company as an assistant manager for about five years, says she and other assistant mangers were made to do the same tasks as hourly workers for more than eight hours a day. The extra duties included greeting customers, operating checkout areas, and taking inventory.

But because they are labeled managers, they are exempt from federal overtime laws that require employers to pay workers time and a half for more than 40 hours of work a week. The lawsuit alleges that they “were ‘managers’ in name only because they did not have the managerial duties or authority,” but that Walmart purposefully classified them as managers to avoid overtime pay and cut costs. The suit claims they should have been paid that extra wage for more than eight hours of work a day.

The lawsuit also says the company deprived Cardoza and other assistant managers of rest and meal breaks.

She is suing for back wages to make up for the lack of overtime pay and compensation for the missed breaks on behalf of any Walmart assistant manager who has worked there since January 2011, although her lawyers say it’s too early to know whether it will achieve class action status.

In response, a Walmart spokesperson said, “It is our policy to pay associates according to federal and state laws. We take this matter seriously. We are investigating the allegations and will respond appropriately with the court.”

It’s not the first time the company has been accused of denying its workers pay. At the end of last year, the company was ordered by the Pennsylvania Supreme Court to pay $151 million in back wages to 187,000 current and former employees who accused it of making them work off the clock during their breaks.

A big Walmart supplier also had to pay out over wage theft in 2013 over allegations that it forced workers to forgo meal breaks. While Walmart doesn’t own the operations, it effectively runs facilities for the company and the company has been accused of squeezing its suppliers so hard that they have to crack down on labor costs.

Wage theft is rampant beyond Walmart, however. In 2012, nearly $1 billion was recovered in back wages for the victims of wage theft, but even that undercounts the breadth of the problem since most workers don’t report the problem. It’s estimated that employers deny workers $50 billion that they’re owed every year by making them work off the clock, shave hours off of their paychecks, pay for work-related expenses out of their own paychecks, or other practices that dock wages. That figure dwarfs the $14 billion taken from all victims of robberies, burglaries, larcenies, and car thefts together.

The problem is particularly rampant in fast food, where recent suits have been filed against TGI Friday’s, McDonald’s, Subway, and Chipotle.

The issue of overtime misclassification has also gotten attention recently. Last year, President Obama issued an executive order that would update overtime laws so that fewer employees could be classified as managers and therefore exempted from time and a half. It would also raise the salary cutoff for getting overtime pay, which currently means anyone who makes more than $23,660 is exempt, a threshold that hasn’t been significantly updated since 1975. These changes could also aid employees like Cardoza, who would likely qualify for overtime pay even if they are assistant managers.

This article originally appeared in thinkprogress.org on April 10, 2015. Reprinted with permission.

About the Author: 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 buck starts here: Living wages and sustainable employment (Part II)

Tuesday, March 24th, 2015

IMG_0156a1_2-2The massive push toward subcontracting and supply chains I wrote about in my prior post didn’t happen overnight, and it certainly won’t be fixed overnight either. There are many pieces to this puzzle, all in the service of one big overarching principle: Lead companies must take their fair share of responsibility for the pain and misery that is generated when they squeeze too much from their suppliers and subcontractors. Here are some of the pieces:

1.  Challenge Payroll Fraud.  What used to be called “misclassification” of employees as independent contractors is really the practice of defrauding employees out of social security, overtime, worker’s compensation, health and safety protections, family and medical leave, unemployment insurance, protections against discrimination, and the right to bargain collectively, among other things. In addition to losing these protections, employees who become “independent contractors” have to cover their own costs.

Cases challenging bogus “independent contractor” status have been multiplying as more and more businesses adopt this practice in order to cut their payroll costs. Last August, the Ninth Circuit held that thousands of FedEx truck drivers were employees, even though FedEx called them independent contractors.  Recently, the judge in a misclassification case against Uber ruled that a jury should decide whether the drivers employees of the company, and noted that “many of the factors in that test appear outmoded” in the “context of the new economy.”

Former Secretary of Labor Robert Reich has proposed that, instead of waiting for the courts to decide these cases one-by-one, the IRS and Department of Labor adopt a new, simpler test: “Any corporation that accounts for at least 80 percent or more of the pay someone gets, or receives from that worker at least 20 percent of his or her earnings, should be presumed to be that person’s employer.”

2.  Treat Lead Companies as Joint Employers. Every federal circuit and many state courts have their own version of the “joint employer” test to determine when one company should be liable for the wage and hour violations of another – including subcontractors or franchisees. Some of these tests are being re-examined to take into account the ways in which “lead companies” maintain control.

In December 2014 the National Labor Relations Board issued complaints naming McDonald’s Corp. as a joint employer of workers at its franchises. In another case, theNLRB has proposed a “totality of the circumstances” test that would impose joint employer status on any company that wields sufficient influence over the working conditions of the other company’s employees, to make meaningful bargaining impossible in its absence. A similar rule in state and federal courts would recognize the significant power and control that is exerted from the top.

3.  Enforce Supply Chain Liability. Regulators and legislators are also coming to recognize the need to affix responsibility at the top of an industry.  California Labor Code Section 2810.3, which became effective January 1, 2015, provides that an employer must share responsibility for wages, taxes, and workers compensation with the middlemen who provide the labor to the employer. In a similar vein, a provision of the Fair Labor Standards Act known as the “hot goods” provision, prohibits the selling or transporting in commerce any goods produced in violation of the FLSA’s wage and overtime provisions.

Decent wages and safe working conditions are not just an idealistic goal. The lack of a healthy middle class hurts all of us. Public health researcher Richard Wilkinson has reported that the average well-being of modern societies — including health, lifespan, literacy levels, crime levels, and so on — is no longer correlated with national income or economic growth, but with the extent of income inequality. The Center for American Progress has just issued an exhaustive report on “inclusive prosperity,” concluding that nations succeed when their middle class is secure in the expectation that those willing to work are able to work and that standards of living will increase.

Clearly, more work needs to be done. It is time to invest in living wages and sustainable employment, instead of pioneering ever more ways to create dead-end jobs that benefit only those at the very top.

This article originally appeared in CELAVOICE.ORG on March 23, 2015. Reprinted with permission.

About the Author: Anne Richardson is the Associate Director of Public Counsel Opportunity Under Law, a project aimed at eliminating economic injustice on behalf of underrepresented workers, students, and families throughout California and nationwide. Previously she was a partner at Hadsell Stormer Richardson & Renick representing plaintiffs in all varieties of employment discrimination and civil rights matters for over twenty years. A graduate of Stanford Law School, she has been named to the Top 100 Lawyers in Southern California and has received numerous honors for her work.

Will the “real” employer please stand up? The consequences of the global shift to subcontracting, franchising, and outsourcing (Part I)

Tuesday, March 24th, 2015

IMG_0156a1_2-2A fundamental change has taken place in the American workplace, and we are only now beginning to realize just how monumental it is.

A new book, The Fissured Workplace: Why Work Became So Bad for So Many and What Can be Done About It, by David Weil, makes the case that in every corner of the employment world, companies are increasingly shedding their employees, while maintaining control over the ultimate product or services to be provided under the “lead” company’s logo and brand. Beginning with peripheral services such as janitorial and security, and gradually including ever more central services, such as receptionists, truckers, and even lawyers, large employers are deliberately subcontracting out their work.

Here’s how it works: A member of a loading dock crew is paid by one company, which is in turn compensated by another company, for the number of trucks loaded. That company, Schneider Logistics, manages distribution centers for Wal-Mart. Wal-Mart sets the price, time requirements, and performance standards that are followed by Schneider, which in turn uses those standards to structure its contracts with its subcontractors.

Why do they do it? Employers can reduce costs by pushing many of the responsibilities connected to being the employer of record down the chain to someone else. Yet by controlling the quality and price of their goods and services, they do not lose their reputations and the goodwill of their brands.

But should lead companies be allowed to have it both ways? Should they be permitted to control the production, delivery, and cost of goods and services, without sustaining any liability for the manner in which their contractors provide them? To take a real world example, if a company like Wal-Mart sets a price that is so low that the only way for suppliers to meet it is by underpaying their employees, isn’t that really Wal-Mart’s responsibility?

This new “fissuring” model has drastic consequences for employees who have been forced to trade in traditional jobs at a lead company, with benefits and a pension plan, for part-time temporary positions with no benefits. Pushing responsibilities down the chain often means that the direct employer is less well capitalized and less capable of maintaining wage and hour standards, or enforcing health and safety rules. Since the company on top sets the price, often as low as the market will possibly bear, the company on the bottom is forced to cut to the bone. Many of the subcontractors are small businesses that go under, and then reemerge as a different company, which results in there being no responsible party  to foot the bill when legitimate claims are made.

Fissuring also negatively affects the health and safety of   the broader public. Weil argues that a significant contributing factor of the devastating environmental oil spill caused by the BP Deepwater Horizon accident in 2009 was the extent of BP’s use of contractors. In order to shield itself from liability by maintaining less control over its subcontractors, BP did not sufficiently oversee the safety component of the operation. Other authors have similarly noted the increase of injuries and fatalities that have accompanied the rise of contracting in, for example, coal mining, construction, and trucking, among others.

To be sure, there are some who benefit from the practice. The third consequence of “fissuring” is to shift the surplus generated by businesses away from the workforce and to investors. This helps to explain why the operative trend in the American workforce is the widening income gap between the rich and the working poor. The gap between the wealthy and the poor is at a hundred year high.  For example, in 1965, the average CEO made about 20 times what the average worker made at any given company. By 2013, the ratio had grown to approximately 331 to 1. What’s fascinating is that a recent study found that not only did people worldwide grossly underestimate the ratio of CEO to worker pay, but that people across all backgrounds preferred a smaller pay gap.

Weil, who was appointed the Administrator of the Wage and Hour Division of the United States Department of Labor in May 2014, argues that since “[t]he modern employment relationship bears little resemblance to that assumed in our core workplace regulations,” laws and judicial decisions need to adapt current rules about workplaces to the realities of the modern world.

In every corner of the American workforce, the pressures to cut costs and improve the investor’s return have resulted in a worsened standard for the middle-class worker, as well as a worsened standard of health and safety. What can be done about it? Stay tuned for my next post.

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