MICHIGAN AMONG 21 STATES THAT SUE TO BLOCK EXPANSION OF OVERTIME PAY LAW

Original Story: crainsdetroit.com

LAS VEGAS — Officials from 21 states, including Michigan, sued the U.S. Department of Labor Tuesday over a new rule that would make about 4 million higher-earning workers eligible for overtime pay, slamming the measure as inappropriate federal overreach by the Obama administration.

Nevada Attorney General Adam Laxalt, a Republican, filed the lawsuit in U.S. District Court in Eastern Texas, urging it to block implementation before the regulation takes effect on Dec. 1. Laxalt, a frequent critic of President Barack Obama's policies, said the rule would burden private and public sectors by straining budgets and forcing layoffs or cuts in working hours. A Little Rock overtime lawyer is reviewing the details of this case.

"This rule, pushed by distant bureaucrats in D.C., tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs intended to protect the very families that purportedly benefit from such federal overreach," he said in a statement.

The lawsuit came the same day that the U.S. Chamber of Commerce and more than 50 other business groups filed a legal challenge against the regulation.

U.S. Secretary of Labor Thomas Perez said he was confident in the legality of the rule, describing the lawsuits as partisan, obstructionist tactics. He noted that overtime protections have receded over the years: they applied to 62 percent of full-time salaried workers in 1975 and just 7 percent today. An overtime lawyer has experience representing clients in wage dispute claims.

"The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States," Perez said in a statement. "I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by."

The measure would shrink the so-called "white collar exemption" that exempts workers who perform "executive, administrative or professional" duties from overtime and minimum wage requirements.

It would more than double the salary threshold under which employers must pay overtime to their white collar workers. Overtime protections would apply to workers who make up to $913 a week, or $47,476 a year, and the threshold would readjust every three years to reflect changes in average wages.

"This long-awaited update will result in a meaningful boost to many workers' wallets, and will go a long way toward realizing President Obama's commitment to ensuring every worker is compensated fairly for their hard work," the Labor Department said in May when it announced the new rule.

Business groups say the changes are too much and too fast, especially as states continue to recover from the recession. A Maine employment lawyer is following this story closely.

“This lawsuit is a slap in the face to working people in Michigan,” said Ron Bieber, president of the Michigan AFL-CIO.

“This new rule is long overdue. Overtime protections have been gutted over the past four decades without a significant adjustment for inflation. The new rule will help protect wages from being eroded by rising costs, and ensure that working people get paid for the work they do.

Other plaintiffs include Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin, and the governors of Iowa, Maine and New Mexico.

The Eastern Texas district where the lawsuit was filed is known as a "rocket docket" court where cases move along quickly.

Job Loss Rate Slows

Significant job losses continued across the economy in October, although the pace of layoffs abated.

Private-sector employment declined 203,000 in October, the seventh-straight month of moderating job losses and the smallest decline since July 2008, according to a report released Wednesday by payroll firm Automatic Data Processing Inc.

Meanwhile, job cuts announced by employers declined for the third-straight month, down 16% from September to 55,679, outplacement firm Challenger, Gray & Christmas said. That was the best reading since March 2008 and less than half the cuts made in October 2008.

The reports came against a faster decline in service-sector employment in the Institute for Supply Management's nonmanufacturing survey. The overall ISM reading slipped to 50.6 in October from 50.9 the previous month, showing slightly slower growth for the sector. (Figures above 50 indicate expansion.) The ISM's employment index fell to 41.1 from 44.3 in September as purchasing managers in the survey reported more layoffs and hiring freezes as companies assess the sustainability of the economic recovery.

Just three of 18 industries in the service-sector survey reported increasing employment in October: real estate, rental and leasing; mining; and management of companies and support services, which includes temp firms.

"The employment piece of the puzzle is what's really holding back this recovery," said Anthony Nieves, a senior vice president at Hilton Hotels Corp. who directs the ISM survey. "Companies are cautious. The consumer is cautious. Everybody is very nervous and holding things close to the vest right now."

The latest reading for the service sector came after the ISM's manufacturing index this week showed continued improvement, particularly in jobs. Manufacturers appeared to be recalling some workers and expanding work schedules, offering hope that other sectors could follow.

The losses in the ADP report are worse than economists' consensus estimate that employers, including the government, cut 175,000 jobs in October. The Labor Department, which releases its estimate of October employment on Friday, previously reported that payrolls fell 263,000 in September.

"The number of unemployed is not the only issue," notes overtime lawyer Verne Elron. "Underemployment and cut-backs in hours are still seriously affecting those who still technically have jobs."

Despite stabilization in the economy, employment "is likely to decline for at least a few more months," said Joel Prakken, chairman of the forecasting firm Macroeconomic Advisers, which produces the private-sector report with ADP.

Mandatory Overtime For Nurses Banned In Pennsylvania
Story from Pittsburgh Post-Gazette

There were no parades or fireworks Wednesday, but July 1 was the independence day that so many nurses and hospital caregivers had hoped and battled for. Among those many was Lois Cusick of Mt. Lebanon, who has worked at UPMC's Western Psychiatric Institute & Clinic for 26 years.

She, and all other nurses and caregivers in the state, are now largely immune from management requests to work "mandatory overtime," the extra hours, nurses say, that frequently were tacked on the end of already long hospital shifts, jeopardizing patient care and making it tough to keep quality nurses.

"This is a huge win. I've been a nurse for 30 years. I raised three children doing in-patient nursing," Ms. Cusick said. "There were so many times I couldn't go home at the end of my work shift."

Every year, the unpredictable overtime hours, compounded by lack of staffing, are high on the list of issues that push nurses out of the health-care industry

For much of the decade, nurses and the Service Employees International Union, and overtime lawyer have been lobbying for a change in state law that would restrict hospitals' ability to force nurses and support staff to work overtime hours. Fourteen other states have similar laws and regulations on the books.

Pennsylvania's law was signed by the governor last fall, and went into effect on Wednesday. "Seven years we've been fighting for this," said Deb Bonn, director of the Nurse Alliance of SEIU Pennsylvania

Now, "when they go to work in the morning, they know what time they are getting out."

It's not just a vague quality-of-life issue -- uncertainty over hours is a major reason that nurses leave the field, many say. In Pennsylvania, nurses must re-register for nursing licenses every two years, and each time they do so, they must fill out a survey that asks about job satisfaction (and dissatisfaction). Every year, the unpredictable overtime hours, compounded by lack of staffing, are high on the list of issues that push nurses out of the health-care industry.

"It's critical," said Cathy Stoddard, a longtime nurse at Allegheny General Hospital, which hasn't imposed mandatory overtime upon its union workforce for six years. "You don't want the person taking care of you to be so exhausted that they're making mistakes."

Even though the SEIU was one of the groups pushing hardest for this change, the new law actually may have a greater effect on non-union personnel. That's because, in some cases across the state, nurses and other support staff already represented by unions have negotiated limits on the number of overtime mandates that can be issued each month.

Non-union nurses and support staff -- including nursing home workers, radiology aides, lab workers, phlebotomists, surgical technicians -- are more likely to see an immediate change in the workplace.

The new overtime law doesn't mean that nurses and caregivers will never work any overtime. They can still volunteer for extra hours, for example. And there are certain "last resort" events that would trigger a hospital's ability to require its employees to work overtime -- a major accident, or a natural disaster, or any other national, state or municipal emergency.

Chronic understaffing is not considered an "unforeseeable emergent circumstance" by the law, and thus isn't a circumstance that would allow for mandatory overtime.

The state Department of Labor and Industry is charged with making sure hospitals and other care institutions are meeting the new guidelines, and seeing to it that "an employer [does] not retaliate against an employee who refuses to work overtime."

If that happens, hospitals may be subject to fines or other corrective measures for any facility that breaks the law, known as Act 102.

What will hospitals and care homes do now that the state has put the kibosh on forced overtime? Hire more nurses and support staff, for one thing. Employers also can borrow nurses from employee banks.

Judge Detours Cabbies' Drive For Minimum Wage
Story from Las Vegas Sun

Nevada’s minimum wage increased this month, entitling workers to receive at least $5.85 per hour, or $7.55 for workers whose employers don’t offer health insurance plans that qualify under state law.

That is, unless you drive a limo or taxi.

Taxicabs line up in the staging area, waiting for passengers at McCarran International Airport. Cab drivers say that waiting in line for an hour when business is slow is no different from sitting in an office, and therefore they should not be exempted from the state’s minimum wage boost.

A federal judge last month issued a ruling in a landmark class action lawsuit filed by drivers at Nevada’s largest limo company, Bell Trans, that sounds, to the thousands of people who work in Nevada’s tourism-based transportation industry, like a bad joke: Not only can drivers not sue for minimum wages under state law, but the constitutional amendment to raise the state’s minimum wage, approved by voters in 2006, wasn’t intended to remove preexisting minimum wage exemptions, built into state law, for drivers like them.

The order, signed by U.S. District Judge Robert C. Jones, states that voters likely didn’t intend to remove the exemption when they voted for the amendment, which aimed to increase the minimum wage rate and doesn’t mention exemptions or how to handle them.

When business was flush, drivers didn’t think about minimum wage laws. In the recession, with rides and tips harder to come by, limo and taxi drivers say they’ve fallen to the bottom of the labor pyramid — working overtime, in some cases, just to scrape together a couple of hundred bucks a week. Limo and cab companies, new to minimum wage complaints, have fought them.

The companies say state law acknowledges that drivers, like, say, independent sales reps, should be compensated based on productivity (drivers share the money they collect from passengers with their employers) rather than receiving a guaranteed hourly wage, like most workers. Drivers say they’re entitled to the same safety net most other workers have. Waiting in a cab line for a ride that may or may not materialize when business is slow is work nonetheless, just like sitting in an office, they say.

Although he told the limo drivers they don’t qualify under state minimum-wage laws, Judge Jones has allowed the Bell Trans drivers to pursue federal minimum wage and overtime claims.

Bell Trans, through the company’s Las Vegas overtime lawyer declined to comment.

The limo drivers are seeking approval from Judge Jones to appeal the order to the 9th Circuit Court of Appeals in San Francisco and, should that fail, a request that the Nevada Supreme Court decide the matter of whether the constitutional amendment removed the minimum wage exemption for drivers.

Federal minimum-wage law, unlike state law, allows employers to include tips in their calculation of minimum wages — a rule that will prevent many drivers from receiving minimum wage. Federal overtime law, which entitles workers to overtime for more than 40 hours worked in a week, is also less favorable for hospitality workers than Nevada’s overtime law, which requires employers to pay overtime for each hour over eight worked in a day, regardless of whether the weekly total worked adds up to 40 hours.

At first glance, the court order seems unfair to drivers, who have a valid argument, said Bryan Cohen, a labor attorney who wasn’t involved in the case. In fact, Cohen said, it’s a well-intentioned and unbiased, though perhaps unpopular, decision that attempts, for the first time, to clarify Nevada’s needlessly complicated minimum wage law.

“The amendment could have been written more clearly to say that the exemption for drivers is removed — or that it stays. But it didn’t,” said Cohen, a senior associate with Kamer Zucker Abbott. “Neither side stepped up, and they allowed a constitutional amendment to pass that was ambiguous and difficult to interpret.”

Boss Decides The Cubicle Costs Extra

Recently, from the Houston Chronicle:

Q. I work as a financial adviser at a major insurance company. The manager in our office periodically threatens employees with punitive measures as a way to increase their production. This month he made good on one of those threats by withholding $500 from my commission-only compensation for “rent” for the cubicle I occupy. There was no prior agreement for this deduction to be made. Was this legal?

A. Probably not. Under the Texas Payday Law, all deductions (other than payroll taxes, court-ordered garnishments, and other legally authorized deductions) must be both lawful and specifically authorized in writing by the employee. If you did not authorize the rent deduction, your employer may have acted improperly.

Another related issue is whether you are owed overtime for any hours worked over 40 per week. There have been a number of cases against major brokerage firms, particularly where the financial advisers receive no salary — just straight commission.

You should meet with an employment law attorney or overtime lawyer to discuss your situation. You might also consider filing a wage claim with the Texas Workforce Commission to recover the unpaid compensation.

Staples In Violation Of Overtime Laws
Story from Business Management Daily

A federal jury in Newark has awarded $2.5 million in damages to 343 sales managers employed by office superstore Staples.

The court determined the retailer misclassified the managers as exempt from the Fair Labor Standards Act (FLSA) when they were not. As a result, the managers were not paid overtime.

Staples maintained it carefully examined the situation with its overtime lawyer to comply with the FLSA, but the jury disagreed. It ruled Staples willfully violated the overtime labor law.

The court has not yet decided whether it will exercise its option to double the damages, as it can in cases involving willful violation of the law.

Verdict Backs FedEx In Overtime Case
Story from the Wall Street Journal

A Seattle jury ruled that FedEx Corp. didn't illegally deny overtime pay to 320 drivers the company deemed to be independent contractors, resolving the latest in a series of battles over whether thousands of current and former FedEx drivers should be reclassified as employees.

The King County Superior Court jury ruled Tuesday that the drivers for FedEx Ground were properly classified as independent contractors, and thus weren't entitled to overtime payments and reimbursement for other expenses.

The Memphis, Tenn., company still faces many other lawsuits across the country, including a nationwide class-action suit related to the classification issue. The outcome of those cases will determine whether FedEx could be forced to pay hundreds of millions of dollars more to cover such costs as operating expenses and pension and health-care benefits. Nationwide, roughly 13,000 current FedEx drivers are classified as independent contractors.

"Our position that the men and women who contract with FedEx are independent contractors and control their professional success clearly resounded loudly with that jury," FedEx spokesman Maury Lane said Wednesday.

The verdict comes less than four months after FedEx agreed to pay $26.8 million to settle a similar California lawsuit. A California Superior Court judge ruled that 203 current and former drivers were employees, not contractors. That ruling was upheld on appeal.

Lynn Faris, lead overtime lawyer in the nationwide class-action case, which is pending before a federal judge in Indiana, said the Seattle verdict has no impact on that case, which is based on federal retirement law. In addition, the verdict won't affect 20 other class-action suits that are based on various state laws.

Nonetheless, Ms. Faris called the Seattle verdict "very disappointing. I think it does show that juries can be misled by contracts written by fancy tax lawyers for big corporations."

No trial date has been scheduled in the nationwide class-action case.

How to Act When the Department of Labor Comes Knocking
Story from Business Management Daily

Suppose an employee has complained to the U.S. Department of Labor (DOL) about possible wage-and-hour or overtime violations in your workplace. Once you’ve been notified that an auditor is coming, get prepared by conducting your own audit.

Labor’s auditors have plenty of latitude to inspect records and interview employees, so make sure you’ve done everything possible to discover and correct any compliance problems as well as gather documents to defend your decisions.

If faced with an audit, you should:

• Review the differences between state and federal laws to ensure you’re complying with the stricter of the two. If possible, you should conduct this review in tandem with a qualified employment attorney.
  

• Reread the job descriptions of any positions that might be in question. Interview people in those jobs and their supervisors to ensure their job descriptions are accurate. Find out what the workers actually do, and check timekeeping records. Promptly correct any errors.

• Interview exempt employees to find out how much time they spend on duties typically done by hourly employees. If it’s more than 20 percent (or in retail, 40 percent), consider reclassifying the employee as nonexempt. (There’s no liability in classifying too many people as nonexempt; it’s the opposite that plunges companies into hot water.)

• Check to see that employees are performing the job as assigned and working the hours designated by management. If they’re not, insist they start doing so.

• Train supervisors and managers on how to determine who’s exempt and who’s not.

• Check your overtime records. If you discover unpaid overtime, pay it immediately—even if the overtime wasn’t approved.

• Review your policy manual with an experienced overtime lawyer to make sure it’s complete and in line with the law.

• Enlist help with all this from a consultant or attorney. Many of the regulations are difficult to interpret, and the wrong call could cost you plenty.