What is changing clothes?

On Tuesday February 19, 2013 the U.S. Supreme Court announced that it will hear arguments regarding what constitutes “changing clothes” within the meaning of section 203(o) of the Fair Labor Standards Act?  Section 203(o) of the Fair Labor Standards Act provides: “In determining for the purposes of sections 206 and 207 of this title the hours for which an employee is employed, there shall be excluded any time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the particular employee.”  The Supreme Court’s decision will likely have a wide-ranging impact on a variety of industries.  The case is captioned, CliftonSandifer, et al. v. United States Steel Corporation.  Check back for updates as this case progresses.

More on raising the minimum wage

The following excerpt from the U.S. Department of Labor’s website (www.dol.gov) provides an excellent overview of some of the common objections to raising the minimum wage. While these are just one commenter’s views, it is important to keep an open dialogue and provide citizens with information on the subject.

The president's plan to raise the federal minimum wage will benefit 15 million American workers, and have a positive effect on the economy. Still, there are some common myths about raising the minimum wage. We checked in with our Chief Economist Jennifer Hunt on the following three myths:

Myth: Raising the minimum wage reduces employment. False Minimum wage increases have little or no adverse effect on employment as shown in independent studies from economists across the country. Additionally, a recent letter by leading economists including Lawrence Katz, Richard Freeman, Joseph Stiglitz and Laura Tyson points out that "[i]n recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market.

Myth: Only part-time workers are paid the minimum wage? False Fifty-three percent of all minimum wage earners are full-time workers.

Myth: Raising the minimum wage will negatively affect teen employment. False Eighty-nine percent of those earning the minimum wage are 20 years of age or older, and studies have shown that minimum wage increases have had little or no adverse effect on teen employment.

Obama Calls for Minimum Wage Increase

During Tuesday night’s State of the Union address, President Obama made a call to Congress to raise the federal minimum wage from its current rate of $7.25/hour. Speaking emphatically regarding the current state of the low wage worker, the President said,

“We know our economy’s stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher. Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty -- and raise the federal minimum wage to $9 an hour.”

Check back for updates on any congressional action taken in relation to the President’s challenge.

Chicago cracks down on wage theft

Arise Chicago, an organization focused on building partnerships between faith communities and workers in the Chicago area, successfully ushered in a new anti-wage theft ordinance which is to take effect this summer. The ordinance passed the City Council by unanimous vote. The ordinance allows the city to suspend or revoke a business license of businesses who violate the Illinois’ Wage Payment and Collection Act.

The Ordinance comes after a University of Illinois study finding wage theft rampant in Chicago car washes. http://www.wbez.org/news/study-wage-theft-rampant-chicago-car-washes-102562

Visit http://arisechicago.org/ for more information.

Minimum Wage Linked to Poverty Line - Proposed Legislation

On Monday January 14, 2013 a bill was introduced in the United States House of Representatives and referred to the Committee on Education and the Workforce proposing a change to the minimum wage guaranteed by the Fair Labor Standards Act.

The proposed bill would peg the minimum wage to a number that is sufficient to equal 115% of the federal poverty threshold for a family of two based upon an individual working 2080 hours per year. The minimum wage would be adjusted every four years to reflect any change in the poverty threshold. Recent statistics (from 2011) show the federal poverty threshold for a family of two to be $15,504. If the bill were passed as written, using the new formula, the minimum wage would increase from $7.25/hour to $8.57/hour.

A copy of the bill can be found here: http://www.govtrack.us/congress/bills/113/hr229/text

Check back in the coming months for updates on this bill as it attempts to make its way through Congress.

The FLSA on Appeal

Rule 68 Offers of Judgment - The Supreme Court of the United States is poised to issue a decision on whether a Rule 68 Offer of Judgment moots an FLSA class in its infancy. In December, the Court heard arguments in a case involving a registered nurse meal break case. Prior to moving for conditional certification, Genesis Healthcare propounded upon the plaintiff an offer of judgment in an amount of her unpaid wages. Upon the offer not being accepted, Genesis Healthcare moved to dismiss the case. The District Court agreed and the Third Circuit reversed. You can listen to the arguments before the Supreme Court here as to whether an offer of judgment to a named plaintiffs in a collective action extinguishes the entire lawsuit.

http://www.supremecourt.gov/oral_arguments/argument_audio_detail.aspx?argument=11-1059

It should be noted that the collective action mechanism is of great importance to victims of wage theft. Allowing an employer to pick off employees who attempt to assert their rights is simply another wall put up between the victims of wage theft and their fair day’s pay.

Successor Liability – The Seventh Circuit Court of Appeals heard arguments last week on whether or not the common law doctrine of successor liability extends to claims brought under the FLSA. The Seventh Circuit, along with most other appellate courts, has applied the doctrine consistently avoid undercutting federally protected labor and employment rights when the assets of a business are sold. Under state law, normally an employer can sell their assets without any provision for liabilities – including those arising under a federal employment law – Title VII, ERISA, NLRA. However, federal courts have used a broader approach to successor liability to ensure victims of federally protected employment law are made whole in an effort to meet the Congressional intent. You can find the argument here.

www.ca7.uscourts.gov/fdocs/docs.fwx?submit=showbr&shofile=12-2440_001.mp3

Again, ensuring an employer make its employees whole through the doctrine of successor liability is a key to stopping wage theft.

Seventh Circuit Denies Summary Judgment in Wage Retaliation Case

After the Supreme Court decided that oral complaints provide protection from retaliation under the FLSA, as discussed in this earlier post, the case continues to make good law for employees. On remand, the Western District of Wisconsin granted summary judgment to the employer on the employees claim for retaliation only to be reversed later by the Seventh Circuit.

The Seventh Circuit explained that to “establish a prima facie case of retaliation under the direct method, an employee must show: (1) that he engaged in protected expression; (2) that he suffered an adverse employment action; and (3) that a causal link existed between the protected expression and the adverse action.” Circumstantial evidence can be used to establish the causal link which allows a jury to infer retaliation where: (1) there is evidence of suspicious timing, ambiguous statements or behaviors; (2) evidence that similarly situated employees were treated differently; or (3) a pretextual reason for adverse employment action.

As with many retaliation complaints, there was suspicious timing – the employee asked a supervisor if she had seen information about a class action against the employer. This statement was then relayed by email to human resources two days later and the employee was terminated. The employee also introduced evidence that another employee had been treated more favorably. Finally, there was evidence before the Court that employer had changed the initial reasoning for the termination from a violation of one policy to the violation of another policy.

Importantly, despite the employer denying doing anything wrong and presenting arguments, backed by their own evidence, to rebut the arguments made by the plaintiff, the case must go to a jury. Too often, discrimination cases are decided on summary judgment despite there being disputed facts as to what happened. At times, it seems that the summary judgment standard is not properly applied – that all facts are viewed in the light most favorable to the non-moving party, drawing all reasonable inferences in their favor, and that in doing so, summary judgment is improper when a reasonable jury could return a verdict for the non-moving party. In this case, the Seventh Circuit properly required the disputed facts be placed before a jury to decide what version of the story is true.

The Court’s opinion can be found here - http://www.ca7.uscourts.gov/tmp/OE0M17QI.pdf

Salaried Workers May Still Be Entitled to Overtime

I was talking to a friend of mine yesterday and the topic of overtime came up.  She was stunned that people who are paid a salary could and often are still entitled to overtime compensation.  As we previously wrote in this blog, an employer cannot avoid paying overtime compensation simply by paying its employees a salary rather than on an hourly basis.  See our previous post here. 

A recent case we filed against Beer Capitol Distributing is a prime example of this often misunderstood principle.   

Just because you are paid a salary, it does not follow that you should not still receive overtime compensation. 

DOL Releases FLSA Retaliation Fact Sheet

In a March 22, 2011 decision, Kasten v. Saint-Gobain Performance Plastics Corp., the Supreme Court held that the FLSA prohibits retaliation against employees for making a complaint about FLSA violations, even if the complaint is oral, as opposed to being written.  In December 2011, the Wage and Hour Division of the Department of Labor issued a Fact Sheet providing general information concerning the anti-retaliation FLSA provision.  Fact Sheet # 77A: Prohibiting Retaliation Under the Fair Labor Standards Act presents information on prohibitions, coverage, and enforcement.  Under the Coverage section, the Fact Sheet explains that the provision applies even if there “is no current employment relationship between the parties” and it also applies “to all employees of an employer even in those instances in which the employee’s work and the employer are not covered by the FLSA.”  Most importantly, the fact sheet includes the standard set forth in Kasten v. Saint-Gobain Performance Plastics Corp.: “Employees are protected regardless of whether the complaint is made orally or in writing.”  For additional information, visit: http://www.wagehour.dol.gov.

UPDATE: Proposed Changes to the Companionship and Live-In Worker Regulations

Updating our previous post regarding changes coming to the applicability of the FLSA to Companionship and Live-In Workers, the Department of Labor has published its Notice of Proposed Rulemaking.

The comment period closes February 27, 2012.