Articles Posted in Wages

Wage violations in the Boston restaurant industry are more commonplace than you might think. rumdrinks.jpg

While Massachusetts laws regarding hours and tips are very strict when it comes to how restaurants must compensate workers, there is a decent chance that your meals are cooked and served by individuals who aren’t properly paid. Such abuses are relatively common in the food service industry, where managers and owners tend to take advantage of workers they assume won’t speak up.

One of the most recent cases is a class action lawsuit filed in Worcester Superior Court, in which Friday’s waiters and cooks allege a host of wage violations. Specifically, the workers say they were often required to work more than 40 hours in a given week, though they were required to work their overtime off-the-clock. Essentially, that meant they were getting paid nothing when they should have been making time-and-a-half.
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Massachusetts businesses are subject to both state and federal overtime laws requiring most hourly employees be paid 1.5 times their regular hourly rate for all work over 40 hours in a given week.
Our Boston employment attorneys know that as of right now, businesses aren’t allowed to swap time off in exchange for overtime pay, sometimes referred to as “flex-time.”

That could soon change.

Republican lawmakers are proposing that workers who toll more than 40 hours in a week be given the option of taking time off instead of receiving overtime pay.

This is an option that is already available to public sector employees. In fact, a lot of state and federal workers can even bank their time off to use weeks or even months later.

New proposals being considered by Congress would extend this kind of option to businesses and employees who are privately employed. Lawmakers suggest that to do so would allow greater flexibility both at work and at home, which is a great benefit to employees as well as companies.

The bill’s primary sponsor, Rep. Martha Roby, R-Ala., was quoted as saying that for some employees, having time is more valuable than having extra money. This option is a benefit, she said, that should be extended to all workers – not just those who work for the government.

The move is part of a larger political push to gain more working class family support for the conservative right. The House will likely vote on the measure soon, but it’s not clear whether it will gain much traction in the Senate, which is controlled largely by Democrats, many of whom see this as nothing more than a ploy to skirt fair wage laws.

The measure is staunchly opposed by labor unions, worker advocacy groups and the White House, which threatened a veto.

Part of the problem, they say, is that there are not enough assurances in the bill that the worker would be given the option as opposed to being forced to take the time off instead of receiving more pay. Employers would have the upper hand in pressuring employees to take one over the other.

Those in opposition also note that the reason why flex time exists for government workers has nothing to do with worker flexibility, but rather is because of a program established back in the mid-1980s to try to save the government money. What’s more, many government workers have the benefit of a union, which provides a great deal more leverage in bargaining those types of issues. Unions in the private sector, they point out, are all but dead, with less than 7 percent of employees having union representation.

Some workers have voiced concerns that when there is an option on the table that allows companies to pocket more money, they will of course steer workers in that direction. Essentially, a flex-time option ends up being an “interest-free loan from workers,” say some.

However, other employees have said they would welcome an alternative.

Similar proposals have been made by the GOP and business advocates since the early 1990s, but have failed to pass.
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To pay, or not to pay?blendingwiththesky.jpg

Our Boston business lawyers know that is the question many businesses are asking these days with regard to student interns. It’s a question that has remained largely up to the employer, assuming that the arrangement met the standards as laid forth by the U.S. Department of Labor’s Wage and Hour Division.

A number of costly lawsuits, though, may be shifting that tide in general. The ultimate outcome is either beneficial or concerning, depending on who you ask. Those advocating for the interns in these cases say companies routinely don’t meet federal guidelines with regard to the intern-employee working relationship and instead use these young, hopeful individuals as free labor.

On the other hand, a strong argument is made that there is a great deal of value for the intern in forging work relationships and real world experience – and not every firm has the resources to pay interns.

As one form of compromise on the issue, companies are increasingly requiring that schools provide college credit for the experience, so there is little question that the student is getting a tangible benefit from the time with the firm. (Although there are some who argue in the alternative that students still have to pay for those college credits, meaning schools are essentially charging students to work.)

There are no federal statistics from the Bureau of Labor Statistics on exactly how many internships are not paid, but listings on sites like Craigslist, and seem to indicate that such arrangements are actually the norm, perhaps more in some fields than others.

However, three recent class action lawsuits could start to change the employment environment for interns. One was against the Charlie Rose Show, in which a $250,000 settlement was reached with 189 former interns who claimed labor law violations between 2006 and 2012. Two others are pending – one against Hearst Magazines and another with Fox Searchlight Pictures.

In the Hearst case, an Ohio State University graduate claims she worked some 55 hours each week for Harper’s Bazaar with no pay and was not offered a job when the internship ended.

A similar claim has been made by a man who interned for Fox.

Companies aren’t under any obligation to hire interns after the internship period is over. However, they do need to abide by these criteria when figuring out whether the arrangement is legal:

  • Even though the internship may involve actual operation of the employer’s facility, it is supposed to be similar to the training one would receive in an educational environment;
  • The experience of being an intern is for the benefit of the intern – not the company;
  • The work of an intern or interns is not supposed to replace that of a regular employee, but instead works closely under the supervision of the staff that already exists;
  • The employer isn’t supposed to receive any immediate advantage from the work of the interns, and in fact, production may be impeded by the intern;
  • Employers and interns both clearly understand the pay arrangement prior to the start of the work.

Unpaid internships can reap great benefits for everyone involved. But small businesses in particular should consult with a Boston business attorney prior to beginning an internship program — just to ensure there are no legal woes later on.
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Picture this:

You just got a job with a box store retailer, unloading boxes from containers and trucks. It’s hard, physical labor and you work anywhere from 12 to 16 hours daily, but you are keeping food on the table for your family.
Then, suddenly your boss tells you you’ll be paid by the box, rather than the hour. This seems fine until you actually get your paycheck, and discover that you’re now actually making less than minimum wage. Complain about it, and you’re sent home with no pay. Complain about it again, and you’re out of work.

Our Boston employment lawyers know that this is exactly what is being alleged in Everardo Carrillo et al. v. Schneider Logistics. Although this is a case out of California, this kind of “wage theft” occurs across the country, and it’s a growing concern.

Wage theft is defined as either underpaying an employee for their work or, in some cases, not paying them at all.

It can take many different forms. It could be stealing tips from restaurant servers (or forcing servers to supplement the wages of other employees using their tips). It could be deductions from a paycheck that are illegal. It could be failure to pay minimum wage or overtime.

In some cases, companies skirt the law to avoid paying unemployment insurance on laid off workers by improperly labeling them as independent contractors. Of course, sometimes this is an honest mistake, but oftentimes, employers know the truth – or they should know.

Millions of workers are affected by wage theft, and most of them are in low-income service industries. These would be sectors such as domestic work, agriculture, hotel and tourism, fast food, home health care and retail. Many of these industries employ a large number of undocumented workers or recent immigrants – many of whom are reticent to make a complaint. Single mothers are also often victims of wage theft, fearing that a complaint will result in them losing a job – something they can’t afford to do.

But the problem is massive. Back in 2009, a ground-breaking study was released by the National Employment Law Project. The study, entitled “Broken Laws, Unprotected Workers” was the result of a survey of some 4,000 workers in New York, Chicago and Los Angeles.

What they found was that overtime and minimum wage violations were commonplace. Attempts to complain were punished severely.

Specifically, the researchers found:

  • Nearly 30 percent of low-wage workers were paid less than the federal minimum wage;
  • More than three-fourths of all workers who toiled more than 40 hours weekly were denied overtime;
  • These workplace violations cost the average worker nearly $2,700 annually.

Even though low-wage workers were the most commonly affected by these practices, managerial workers were not immune. Oftentimes, people were given supervisory titles and responsibilities – minus the extra pay.

Managers receive a lot of pressure to improve certain numbers, but this ends up resorting to falsification of employee records, denial of breaks or certain deductions from worker wages.

The troubling reality is that when it comes to accountability, many of the laws are far too lax. Even in cases where a settlement is reached, larger firms tend to think of it merely as a cost of doing business.

It’s worth noting that Massachusetts has always been on the forefront of worker rights, being the first state to enact legislation requiring a minimum wage in 1912. We absolutely can continue to be on the forefront – but it takes workers who are willing to step forward and stand up.

If you have been a victim of wage theft in Massachusetts, call us today to learn more about your rights.
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A chain of pizzerias in Massachusetts and New York faces a multi-million dollar lawsuit from current and former employees who say they were denied proper compensation for their work.
Our Boston business lawyers understand that Massachusetts employment and wage laws are among the strictest in the nation. It’s critical that business owners understand the law and their responsibility. It’s also important for employees to know the same.

Both sides need to understand when a line has been crossed. Too often, employers have an ignorance of the law. It doesn’t make them any less liable for damages if a court determines the action or payment was improper.

This lawsuit was filed in New York, though if it is given class action status, as plaintiff attorneys have requested, it could address violations on behalf of employees of the chain throughout Massachusetts.

According to the complaint, the owners of the restaurant chain “systematically” required a number of employees to work long hours, for which they were not compensated with even minimum wage and they were also denied overtime pay. The workers say this was routinely done to mostly immigrant dishwashers and kitchen workers. Employees say the owners used intimidation and threats to prevent these workers from speaking out to authorities about these violations.

The suit seeks at least $2 million in damages. While only a handful so far have come forward, the plaintiffs estimate there anywhere from 12 to 75 current and former workers who would likely qualify for compensation under the class umbrella.

Plaintiffs said this type of conduct went on year after year, so the payouts – and class size – could be quite sizable. Of the plaintiffs listed, employment times range from 2005 to 2012.

Routinely, these workers say they were ordered to work between 60 and 72 hours in a week-long period. However, they were denied time-and-a-half pay for any hours they worked over 40 – which is considered full-time. Plaintiff lawyers say at least $1 million is owed to his clients, though the award has been doubled to penalize the defendants.

Another aspect of the claim is that employees were forced to record fewer hours on their time sheets than they had actually worked. Often, workers were paid in cash, under the table and less than minimum wage, according to the allegations.

Lawyers say that a lot of the intimidation and threats revolved around race and nationality. Many of the employees were Mexican, and racial slurs were frequently used, workers said, and threats to call immigration were often thrown around.

But issues like this are not limited to low wage earners. The fact is, this reportedly went on for some time, as it often does, because people don’t recognize their rights. For example, many times salaried employees think they aren’t entitled to overtime wages. This is simply not true.

Massachusetts General Law Part 1, Title XXI, Chapter 151, covers most of the state’s wage and overtime compensation laws.
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With President Barack Obama’s re-election, the future of his health care initiative has been all but solidified, prompting a number of low-wage employers to shift toward part-time workers, rather than providing health insurance for full-time employees.pencil2.jpg

Already, the Wall Street Journal is reporting that a number of chain hotels, restaurants and retailers have started scaling back hourly workers to 30 hours weekly, which is the threshold at which employers with more than 50 workers would have to offer a minimum level of health insurance by 2014, or begin paying a $2,000-per-worker penalty.

Our Massachusetts employment lawyers want both businesses and workers to know what the rights are of part-time workers as outlined under state law, which tends to be more stringent than federal law with regard to employee protections.

Consultants have warned some businesses that moving to more part-time labor may risk a loss of productivity, higher staff turnover and low morale.

Still, some are making the move anyway.

Although businesses here already fall under the health care overhaul signed into law in 2006 by then-Gov. Mitt Romney, we may begin to see the effects amplified once the Affordable Care Act goes into full effect next year.

The U.S. Bureau of Labor Statistics indicates that roughly 18 percent of the country’s workforce is part-time, while approximately 70 percent of the nation’s companies offer some form of part-time work.

Aside from the health care overhauls, other factors that are contributing to an increasing number of part-time employment include:

  • An increasing number of people who are making a gradual transition into retirement;
  • More women with children who are working;
  • An increased level of entry requirements for skilled jobs, meaning people are attending school and/or training for longer.

Regardless of whether an employee is full time or part-time, the minimum wage is $8.00 hourly in Massachusetts. For tipped employees, it’s $2.63 an hour.

Additionally, part-time employees are given the same kinds of considerations full-time workers would get with regard to holidays. So for example, if a paid holiday falls on a day that the part-time employee is scheduled to work, he or she should receive a day off with pay, as would a full-time worker. Similarly, if the part-time employee works that holiday, he or she should receive a pro-rated, holiday pay. (You can learn more about Massachusetts Blue Laws here.)

Part-time employees are also entitled to the same breaks as full-time workers, which is a full 30 minutes for every six hours worked.

It’s worth noting that employers don’t have to provide paid sick or vacation time to either full or part-time workers under state law, though an illness may fall under the federal Family Medical Leave Act.

If you have a question complying with state or federal labor laws — or state of federal employee healthcare mandates — contact an experienced Boston business law firm today.
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Our Boston wage dispute attorneys know that there are many ways that a person can lose a civil lawsuit against a former boss. sorter.jpg

One of those is not presenting enough evidence. Another is having a witness or witnesses who aren’t credible. Yet another is waiting too long to take legal action.

However, one of the most preventable ways is failure to file the proper paperwork, particularly after the judge has ordered it. The best way to ensure this does not happen is to hire an experienced lawyer to prepare your case.

In Perry v. Zinn Petroleum Companies LLC, failing to do this was precisely the downfall of his case. After the judge dismissed the case, the plaintiff was ultimately successful in having the case re-opened upon appeal. But it’s an unnecessary setback that should never happen – and a reminder that these cases are best handled by an experienced law firm.

According to court records, the plaintiff, “Perry,” filed suit against his former employer, a petroleum company, back in September 2011. At the time, he had worked for the company for about two years. Perry alleged in his suit that the defendant willfully denied him overtime payment, in direct violation of 29 U.S.C. 207(a)(1). This is the federal law that defines a full work week as 40 hours; it also holds that overtime a non-salaried worker puts in must be compensated at a rate that is at least one and one-half times his or her regular rate of pay.

Perry claims that, in addition to this, he had injured his back while at work in the fall of 2009. Following that incident, he was not able to work for several months. When he was able to come back, the company told him there was no position available. The plaintiff held that this violated the state’s workers’ compensation law.

After the initial complaint was filed, the company filed a response. Then, the district court gave Perry 20 days to file something called a “statement of claim.” This would specifically outline the exact amount of the overtime wages he claimed weren’t paid and provide detail about the nature of those payments. He was told at the time that his failure to do this could result in the whole or partial dismissal of his complaint. And yet, Perry failed to properly file.

So in mid-January of 2012, the court gave him an extension. In that order, it was stated that failure to comply by the stated deadline would result in a dismissal of the case without prejudice, meaning he could file another case if he wanted. The plaintiff still did not file the paperwork, and neither did he or his attorney request another extension.

The plaintiff’s attorney later told the court he had drafted the statement of claim, but then forgot to file it. He also stated there was a misunderstanding, as he thought the case had been referred to another judge who would adopt a new schedule for filings.

The court denied the plaintiff’s motion for reconsideration and dismissed the entire claim.

The only reason the appellate court reversed in this case was due to the statue of limitations on wage claims, a dismissal without prejudice ultimately was akin to a dismissal with prejudice – because he would have been barred from filing again. So it was only due to a technicality that he ended up getting a second chance to present his case.

When you’re filing a claim like this, you’ve already been let down by your employer. You don’t want your attorney to let you down as well. Hire someone with proven skill and experience.
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The parent company for the major chain restaurants of Olive Garden, Red Lobster, Longhorn Steakhouse and others, is facing allegations of wage violations. waiterwithtray.jpg

It’s not the first time that the company, Darden Restaurants, has been the target of these allegations. In fact, the U.S. Department of labor’s Wage and Hour Division fined the company twice in 2011, saying employees at Red Lobster and the Olive Garden were made to work off-the-clock. Similar suits are pending.

The company employs some 180,000 people in about 2,000 restaurants.

Our Boston employment lawyers have represented both employees and businesses in these types of matters. While certain labor laws are clearly defined, others may result in areas of gray. It’s important that both businesses and employees be educated on their rights and potential options for dealing with violations.

The Fair Labor Standards Act, a federal law, lays bare the foundation for fair pay. The minimum wage in the U.S. right now is $7.25 an hour. in Massachusetts it’s more, $8 an hour, the highest rate in the country.

For tipped employees, it’s a little different. Tipped employees are those who are classified as receiving more than $30 each month in tips. These wages are considered the property of the employee, and the business is not allowed to use those tips for any reason other than a credit against its minimum wage obligation to the employee. Companies are currently required to pay tipped employees a minimum of $2.13 an hour.

The FLSA specifically addresses “dual jobs.” This is when an employee does both tipped and non-tipped work. What the law says is that if a person works as, say, both a waitperson and a maintenance person, the employer has to be careful.

The example given is that a server who spends some of the time cleaning up or setting tables or washing glasses or rolling silverware is still considered to be working in a “tipped occupation,” even though those tasks don’t actually generate any tips.

However, if the employee spends a “substantial” amount of time taking care of those non-tip related duties, then employers can’t claim that tip credit during those hours – meaning they would have to pay the full minimum wage during that time. “Substantial” is defined as in excess of 20 hours each week.

These issues are the center of the current case.

The lawsuit, filed in federal court in Florida, seeks potentially tens of millions of dollars in back pay, punitive damages, interest and attorneys fees.

Among the specific claims being made:

  • That employees were required to work over their allotted 40 hours without being paid time-and-a-half as required by law;
  • That tipped employees were required to roll silverware, vacuum, refill salt shakers and conduct other side work that went beyond the 20 percent threshold;
  • That servers who arrived for their scheduled shift were not allowed to clock in for work until customers arrived. Some also allege they were forced to clock out and continue working without pay.

Since this case is being filed as a class action, it’s expected at least 1,000 individuals will join the suit, though many more are likely eligible.

Having represented both businesses and employees in similar matters, we are well-qualified to understand the issues and will fight aggressively for your best possible outcome. Consulting with a law firm when setting your pay structure can help you best determine your obligations as an employer and stay on the right side of the law.
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A weaker economy has undoubtedly led to more work, and sometimes for the same – or even less – pay. weldingglass.jpg

Boston employment lawyers understand overtime complaints have become increasingly more common – and not just in the U.S.

The survey, conducted by Harris Interactive on behalf of Kronos Inc., found that about two-thirds of non-salaried employees in France, the U.K., Australia, Canada, Mexico, China, India and Brazil indicated their employers violate overtime rules – at least part of the time.

In the U.S., a little less than half said the same thing.

So while we may be better off than some other places, overtime violations are no rarity. They are rarely sanctioned, except through civil litigation, despite the fact that both federal and Massachusetts state laws forbid an employer from not properly compensating most hourly employees with overtime.

Workers in China, Britain and India had the highest number of complaints.

Of course, overtime in and of itself is not a problem – and is often welcome by many employees because they need the extra pay. In fact, in the U.S., nearly 50 percent said they were content with the amount of overtime they worked, and another 40 percent said they actually wished they had more.

The problem is when overtime laws are broken.

The U.S. Fair Labor Standards Act (or FLSA) requires that companies pay time-and-a-half for any time employees put in over the full-time 40 hours work week. There are a few exemptions (for example, police, firefighters and hospital workers typically don’t work a 40-hour week, so the rules are a bit different).

The regular base rate of pay has to meet minimum wage requirements (which is $8 per hour in Massachusetts as of Jan. 1, 2012, except for tipped employees, for whom it is $2.63 an hour).

So here, if an employee makes $8 regularly, the worker would have to be paid $12 an hour for any time that he or she works over that 40-hour threshold.

When workers do get overtime, they may be reluctant to speak up about not receiving the full time-and-a-half pay because they don’t want to jeopardize their opportunity for extra hours. In some cases, hourly workers may be subtly asked to work over without any pay at all.

Across the U.S., there has reportedly been a record increase in the number of employee claims of wage and hour violations. These include miscalculation of overtime pay and off-the-clock work. According to the U.S. Department of Labor, there have been roughly 7,000 complaints filed so far this year under FLSA. That’s an increase of about 2,000 from 10 years ago.

Last year, the federal agency’s wage and hour division reportedly collected some $225 million in back wages from employers on behalf of some 275,000 workers.

More employees may be standing up to overtime violations in Boston due to the discussion generated by high-profile cases, such as several class action suits filed by Walmart workers. Earlier this year, the retail giant agreed to pay some $5 million in back wages to some 4,500 employees who were not properly classified, and therefore denied the overtime to which they were entitled. Four years ago, another case involving the company, alleging improper meal and rest breaks, resulted in a $352 million verdict.
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A hotel in Pittsfield recently struck a settlement with 150 current and former employees — food and beverage workers — over an argument about tips that weren’t passed along from the hotel to the workers, according to the The Berkshire Eagle.

Overtime and wage recovery in Massachusetts is a big deal for employees, especially in this tough economic climate. When money is tight all around, workers must be paid promptly and properly.
At the same time, companies are trying to be as efficient as possible in order to ensure that they can be successful long-term. Sometimes, that includes exploring ways to save money. When it comes to wages, small businesses must be careful to be 100 percent sure they can legally cut where they’re trying to cut.

In either situation, an experienced Boston wage lawyer can be consulted to ensure employees are compensated fairly and employers are operating within the law. Whether that means reviewing a company’s policies and books to determine if they are in compliance with state and federal wage laws or representing an employee who feels they have been ripped off, the skills and experience of a lawyer can be used to sort out the conflict.

According to The Fair Labor Standards Act, employees must adhere to paying minimum wage and overtime in certain scenarios. There are exceptions to overtime, depending on the circumstances.

According to the law, tipped employees — who take home more than $30 per month in tips — must be paid at least $2.13 per hour if they claim a tip credit. The federal minimum wage is $7.25 per hour for those 21 and older. Tipped employees typically include waiters and waitresses, hotel workers, valet workers and others in the hospitality industry. The Department of Labor provides information online for both employers and tip employees to rectify common problems with this setup.

In the situation in Pittsfield, hotel workers agreed on a settlement of $1.3 million — of which they will receive $850,000 to split after attorneys fees. How much each employee receives depends on how long they worked at the hotel during the period covered in the lawsuit — November 2006 to June 2010.

Massachusetts employment lawyers say that about one-third of the 20 percent service charges that are billed to patrons at the hotel were withheld. The hotel is saying that they have proof to defend the lawsuit and that the case was based on a “misunderstanding.” But the company and its insurance provider decided to settle.

The whistleblower claimed that he started getting suspicious when the hotel’s accounting department couldn’t provide a straight answer about how much workers got paid for events they worked. Since these tipped workers make a low wage, their tips are important, he said.

When conflicts arise in wage issues, it’s important for each side to have sound legal advice. Sometimes, these issues can be worked out internally. Other times, the conflict requires litigation. In either situation, employees and employers must trust an experienced Boston employment lawyer.
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