How misclassification can raise tax liability

A new report from the National Employment Law Project explains how misclassification of employees as independent contractors affects the tax liability of workers.

If you receive 1099s instead of W-2s for your work, are you sure that you are properly classified? Or is the business depriving you of your rights and potentially costing you money?

Misclassification is one of the primary sources of wage theft.

Read the article.

Louisiana nursing home operator pays nearly $120K in penalties, back wages, damages to resolve violations following federal investigation – United States Department of Labor

NEW ORLEANS – Two U.S. Department of Labor Wage and Hour Division investigations found that a nursing care operator with multiple southern Louisiana facilities violated the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.

Source: Louisiana nursing home operator pays nearly $120K in penalties, back wages, damages to resolve violations following federal investigation – United States Department of Labor

Workers, individuals and families needing home care, and employers can find more information about the wage laws that apply by clicking here.

Another City Resident Recovers Unpaid Wages Under New Brunswick Wage Theft Ordinance

“This first of its kind in New Jersey, the local law allows the city to deny the renewal of operating licenses, issued annually on December 1st, if any wage theft claims against the business are not resolved. Because a business cannot remain open without an operating license, the ordinance incentivizes not only adherence to federal and state standards for minimum wage and for overtime, but also settlement of any wage disputes in a timely fashion.” Read more about the case of Irene Lopez seeking unpaid wages of $5,000 from La Hacienda Grocery Store here.

Demonstrators gather outside La Hacienda in support of Irene Lopez

Demonstrators gather outside La Hacienda in support of Irene Lopez

Several U.S. cities, like Seattle, San Francisco and Miami, have passed their own Wage Theft Ordinances.

 

 

 

The Case Of The Missing Wage Thief

Four years after winning a lawsuit demanding $1.5 million in back wages and damages from the restaurant that employed them, none of the plaintiffs have seen any of the money. “Countless immigrants in the restaurant industry work long hours for illegal wages. And even when they get a court of law to rule in their favor, they very rarely see a penny of the money that was taken from them.” The owner shut down his restaurants and “disappeared like a ghost.”

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“Cao’s story is both strange and ordinary… At every job, Cao worked 11 or 12 hours a day, six days a week. He was paid flat wages that never added up to more than $1,300 a month, always in cash, and with no such thing as overtime pay… Wage theft is an everyday occurrence in American restaurants, especially for workers like Cao. The Restaurant Opportunity Center’s study of the industry in eight major cities across the country found that 46% of workers reported overtime violations, one of the most common ways of skirting wage laws. As for New York City, the National Employment Law Project estimated in 2008 that there are overtime violations in 75% of the city’s restaurants.”

Read more here.

Pay Stubs for All

The goal: Paystubs for All Workers.

“Although most workers receive paystubs, as many as 20 million U.S. workers do not receive paystubs that outline how their pay is calculated or what deductions were taken from their wages. 

“There is no federal requirement that employers give workers paystubs. Often, workers who don’t receive paystubs are victims of wage theft, cheated of the pay they legally earned. A Paystubs for All regulation would require employers to provide workers with the information that they are already required to keep and would help deter wage theft. Without paystubs for documentation, workers have difficulty proving wage theft.
 
“Interfaith Worker Justice and many worker advocates around the country are encouraging the U.S. Department of Labor to issue a simple regulation that all workers covered by the Fair Labor Standards Act must receive paystubs.” Read more here about what you can do.  

Amazon Wage Theft Ruling by Supreme Court

“Retail warehouses don’t have to pay workers for the time they spend in security screenings to make sure they’re not stealing, the Supreme Court ruled Tuesday in a unanimous decision that reverses a lower court’s finding that workers must be paid for that time.”

“The decision was a big loss for workers challenging the security checks, which are common among retailers. According to a brief filed by the agency, there have been 13 class-action lawsuits against Amazon and other companies involving more than 400,000 plaintiffs and seeking hundreds of millions of dollars.”

Read more on the case here and here.

An Ounce of Prevention – Anticipating Changes to Companionship Regulations

“Enforcement of a final rule that takes effect Jan. 1, 2015, to extend Fair Labor Standards Act minimum-wage and overtime protections to certain direct-care workers is to be delayed, but employers should not hesitate to ensure timely compliance with the rule’s minimum-wage, overtime and record-keeping requirements. Effective Jan. 1, home-care agencies and third-party employers must pay at least the federal minimum wage and overtime to jointly or solely employed direct-care workers, such as a certified nursing assistant, home-health aide, personal care aide, caregiver or companion.

JOE RAEDLE / GETTY IMAGES Home care aides often make substantially less than their peers in hospitals and nursing homes

JOE RAEDLE / GETTY IMAGES
Home care aides often make substantially less than their peers in hospitals and nursing homes

“The key change that is applicable to private employers and to states is going to be tracking worker hours and better record-keeping practices,” said Sarah Leberstein, a lawyer with the National Employment Law Project and co-author of its Aug. 2011 “Fair Pay for Home Care Workers: Reforming the U.S. Department of Labor’s Companionship Regulations Under the Fair Labor Standards Act,” report. “It shouldn’t be rocket science. But some employers haven’t had to track hours worked by [home-care] workers,” she said, noting that this is especially true of states that thought of home-care workers as independent providers.

Workers should also be instructed on marking time worked, and employers should consider innovative ways to keep time records, Leberstein said. Under the final rule, “if the employee spends more time working than was anticipated, the employee must be paid,” Joseph K. Mulherin, a shareholder in Vedder Price’s Chicago office who advises employers on employment-law issues, said in a June 13, interview with Katarina E. Wiegele for Bloomberg BNA’s FLSA Litigation Tracker. “If the employee’s sleep time, meal periods or other periods of free time are interrupted, the interruption must be counted as hours worked.”

“In home-care work arrangements, there will undoubtedly be situations where the employee is working without the employer’s knowledge, e.g., because the employer is sleeping,” Mulherin said. “Thus, it is critical that employers require their employees to accurately self-report all actual work hours.”

The Labor Department Home Care web portal has employer resources and a page for workers to download a work calendar or link to a Smartphone app to track hours. For more information on the changes, see the Department of Labor Website: Home Health Care and the Companionship Services Exemption Under the Fair Labor Standards Act (FLSA)  or the Comparison of Current vs. Proposed Companionship Regulations. Or read more about innovative ideas for complying with the changes at Bloomberg BNA.

Jimmy John’s asks low-wage workers to sign non-compete clauses

Jimmy John’s employment agreement includes a surprisingly strict “non-competition” clause that requires workers not to work at one of the sandwich chain’s competitors for a period of two years following employment at Jimmy John’s — But the company’s definition of a “competitor” encompasses any business that’s near a Jimmy John’s location and that derives a mere 10 percent of its revenue from sandwiches. 

If you're considering working at a Jimmy John's sandwich shop, you may want to read the fine print on your job application.

If you’re considering working at a Jimmy John’s sandwich shop, you may want to read the fine print on your job application.

The noncompete agreement is now part of a proposed class-action lawsuit filed this summer against Jimmy John’s by workers accusing the company of wage theft by forcing employees to work off the clock. Read more about the case here

Wage Theft Costing Low-Income Workers Billions

“Nearly $1 billion was recovered in 2012 by lawyers or regulatory agencies acting on behalf of workers who were paid below minimum wage, not paid for overtime or other wage and hour violations, according to a first-time analysis conducted by the left-leaning Economic Policy Institute. And the problem is growing, EPI analysts say.

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Even with these efforts by lawmakers and labor groups, “I think wage theft is increasing,” said Ross Eisenbrey, vice president at EPI and one of the authors of the new study. “There really is not much state local or federal enforcement going on, particularly in the low-wage industries where you’re not going to get attorneys to bring those cases.”

“The money recovered is just the tip of the iceberg,” said Tsedeye Gebreselassie, a senior staff attorney at the National Employment Law Project. The EPI report says if the 2009 study were extrapolated to the entire country’s low-wage labor market, wage theft could cost workers more than $50 billion every year.

Read more from NBC News here