Minimum Wage

New Legislative Session Brings Talk of a $15 Minimum Wage in Georgia

January 14, 2015 | Parks, Chesin & Walbert

The Georgia legislature began its 2015-2016 regular session on January 12, and a controversial minimum wage bill could be up for debate in the house. House Bill 8, sponsored by Reps. Tyrone Brooks and Dewey McClain, seeks to increase the Georgia minimum wage to $15 an hour for most nonexempt employees.

The current Georgia minimum wage is $5.15 an hour, which is lower than the federal minimum wage of $7.25. Employers covered by the Fair Labor Standards Act (FLSA), a federal law, must pay the $7.25 wage. Most employers not subject to the FLSA — usually smaller entities with fewer employees — must pay the $5.15 Georgia wage. The smallest of employers may be exempt from all minimum wage laws.

The proposed legislation, if it is passed into law, also would broaden the number of employees exempted from Georgia’s minimum wage. Currently, domestic workers, farm workers, and employees who depend on tips are exempt from the law, meaning that they do not have to be paid the minimum wage. The proposed legislation would change that: Employers of domestic and farm workers would be obligated to pay the new minimum wage. For waiters and other employees who are paid gratuities the new legislation would allow tips to constitute up to 50 percent of their new $15 minimum wage.

Legal Shifts Are Giving Support to New Labor Movements

December 17, 2014 | Parks, Chesin & Walbert

With the economic downturn largely in America’s rearview mirror as job creation and employment continue to rise, there’s been a lot of talk about the quality of many of those new roles. Whether it’s fast food workers or retail employees, the most prominent new labor issue is not whether there are jobs to be found, but whether those jobs offer a living wage. Over the past several months, workers in minimum- and low-wage positions have made increasingly louder demands for higher pay and unionization rights through a string of walkouts and protests around the country. Perhaps a matter of serendipitous timing or the signal of a cultural shift, it seems that lawmakers and courts are giving life and validity to the movement, and employers should start taking notice.

Consider the situation at America’s biggest retailer, Walmart. For the third year in a row, Black Friday shoppers across the country were met by protests from workers and sympathizers demanding a base pay increase to $15 per hour and the right to form a union. Actually, the number of Walmart workers comprised only a small portion of the protesters, with the majority being members of other unions offering support. Whether the protesters actually represent the sentiment of all or even most Walmart workers largely depends on which side of the divide is offering an opinion, but an administrative law judge for the National Labor Relations Board (NLRB) recently sided with employees who said they were unfairly disciplined by the company for their efforts to organize workers.

Courts Continue to Clarify What Constitutes an Employee

December 3, 2014 | Parks, Chesin & Walbert

The economic downturn that began in 2008 changed a lot of things about the job market. Apart from the jump in unemployment rates, may of the jobs that were available were no longer the full-time positions that traditionally served as the norm for the workforce. More roles were converted to part-time or temporary jobs that didn’t include the benefits of full-time positions. Many of these positions also came with a certain degree of instability and no guarantee of hours, while many of the temporary workers being staffed by employment agencies were ceding a significant chunk of their potential earnings to the agencies.

Emerging from this came a rise in independent contractors (“1099 workers” to the IRS), who were often completely competent employees forced out during tough times who remained un- or under-employed for long periods and decided to cut out any middleman as they did piecemeal work where they could. The system worked out well for businesses using the independent contractors, since they were not obligated to offer benefits or even pay employment taxes on the 1099 pool of labor. As long as the workers could exercise a great deal of autonomy as to how they accomplished the assigned tasks and there was some level of impermanence, everyone–including the IRS–was happy.

Celebrating Wins for the Working Class

September 3, 2014 | Parks, Chesin & Walbert

Much as single days celebrating mothers and fathers seem to fall short of fully acknowledging everything they do for their families, a lone Monday off in honor of America’s hard workers is far from all the reward they deserve. Of course, that shortfall is unfortunately what keeps employment law attorneys busy the other 364 days of the year. Instead of focusing on all that needs fixing to help ensure workers’ rights, however, today is a good day to reflect on some of the biggest labor wins of the past century.

By any objective standard, the Fair Labor Standards Act (FLSA) of 1938 should be near the top of victories for the working class. After decades of failed efforts to right wrongs that included excessive child labor, six-day work weeks of 10 or more hours a day, and unlivable wages, President Franklin D. Roosevelt and Congress engaged in years of back-and-forth negotiations to finally arrive at a bill that banned oppressive child labor, capped the work week at 44 hours, and set a minimum wage of 25 cents an hour–about $3.32 in 2014 dollars. (A detailed and compelling history of the FLSA can be found on the U.S. Department of Labor’s website.) While the FLSA couldn’t begin to solve all the ills faced by the labor force, and it didn’t achieve the 40-hour week or 40-cents-an-hour minimum wage that many had pushed, it cemented a huge win for workers’ rights.

Almost 80 years later, conditions for workers have generally improved. Still, access to fair, livable wages continues to dominate much of the conversation about what the labor force needs, with President Obama and labor unions using today to further their efforts to increase the federal minimum hourly wage from $7.25 to $10.10. So far, opponents have stalled any national movement on the issue, but several states and municipalities have already enacted higher minimum wages, with Seattle going so far as to raise it to $15 per hour.

NLRB Decision Shakes Up Liability for Franchise Restaurants

August 25, 2014 | Parks, Chesin & Walbert

“McJobs” may soon come with a side of leverage for workers who find themselves the victims of labor law violations. In a surprising move, the general counsel for the National Labor Relations Board (NLRB) last month permitted regional directors to name McDonald’s Corp. as a joint employer along with its franchisees in several pending actions. This marks a major shift to the traditional liability issues in the franchise world, where franchisees are essentially independent contractors who pay royalties to use the systems and products of the parent company, but are solely liable for any labor law violations against their W-2 employees. While this move doesn’t carry the binding power of a ruling, the potential changes it brings caught plenty of attention from the franchise world.

Under this new model, the parent company could share in the responsibility for unlawful labor practices by their franchisees. Lawyers on the corporate sides argue that such responsibility for oversight of what could be tens of thousands of franchisees would be impractical if not impossible. Workers’ and labor groups, on the other hand, point out that the parent companies already exercise a great deal of influence and control in micromanaging almost every other aspect of the businesses, from stock to procedures to store design to intellectual property and advertising. Such strict control of day-to-day operations, they say, voids any industry arguments that ensuring franchisees adhere to labor standards would require extraordinary efforts.

The move by the NLRB goes beyond McDonald’s, fast food, or even restaurants in general and could affect all kinds of retail stores and service providers who operate on the the franchise system. Adding a layer of responsibility to the franchisor-franchisee relationship would come at some financial cost to the corporate home offices, even as the franchise establishment market continues to grow. Naturally, there’s been a collective freak-out by industries and companies around the country. The recurring speculative concern is that a corporate parent ensuring basic labor laws are followed at their franchises will somehow have a negative effect on job creation.

Salary Issues: The Professional Exemption under the FLSA

January 6, 2013 | Parks, Chesin & Walbert

Although minimum wage and overtime pay regulations apply to most employees in the United States, there remain certain employees that are exempt from both. Section 13(a)(1) of the Fair Labor Standards Act (FLSA) notes exemptions for professional, executive, administrative, and outside sales employees. Certain computer employees are also exempt under this section, as well as under Section 13(a)(17).

Guide to Exemptions Under the FLSA

January 4, 2012 | Parks, Chesin & Walbert

The Fair Labor Standards Act (“FLSA”) is one of the key protections for American workers. It sets a price‑floor by means of the minimum wage, and it reduces the hours that Americans are required to work by requiring overtime pay for hours above forty per week. However, when the law was drafted in the 1930s, Congress realized that certain jobs either required extremely long hours or were traditionally compensated in unique ways. For example, sailors generally are on-call or working 24 hours a day when they are at sea, and Congress decided that requiring overtime pay for these employees would threaten an important part of the American economy. For different reasons, Congress exempted “outside” salespeople from the FLSA because such employees spend a lot of time travelling and they are generally paid on a commission basis. According to Congress, it didn’t make sense to require that these employees be paid overtime. Alongside these examples, the drafters of the FLSA included various other exemptions that made sense from an economic standpoint.

“Employees” and “Independent Contractors” Under the FLSA

December 24, 2011 | Parks, Chesin & Walbert

The FLSA is a broadly remedial statute that was designed with the dual goals of raising wages for the economically vulnerable while at the same time increasing employment. To accomplish these goals, the FLSA renders illegal any employment contract involving wages that are lower than the minimum wage or for wages that do not include overtime payments for hours worked above forty per week. As a result, some employers are tempted to work around the FLSA by maintaining that their workers are actually “independent contractors.” While it is true that the FLSA does not apply to bona fide independent contractors, most employers who attempt the “independent contractor” strategy do so at their own peril. This is so because the concept of “employment” under the FLSA is astonishingly broad, and a worker could be an “employee” under the FLSA who would be considered an “independent contractor” under the common law or other federal statutes.