March 13, 2014
MEMORANDUM FOR THE SECRETARY OF LABOR
SUBJECT: Updating and Modernizing Overtime Regulations
The Fair Labor Standards Act (the “Act”), 29 U.S.C. 201 et seq., provides basic rights and wage protections for American workers, including Federal minimum wage and overtime requirements. Most workers covered under the Act must receive overtime pay of at least 1.5 times their regular pay rate for hours worked in excess of 40 hours per week.
The federal Department of Labor (DOL) budget for fiscal year 2015 is official, and it includes new programs and additional protections for workers and employees. This is exciting news for millions of Americans, including the long-term unemployed, students who want to work when they graduate, and current employees whose employers may not be following the law as they should. Check out the changes that are being put in place to help you.
One of the most pervasive scams that employers use to lower their workers’ wages is misclassification – that is, turning their workers into independent contractors or temps when they are actually employees. Misclassification shouldn’t be mistaken for the whim of an errant employer. On the contrary, it’s a strategy that has been used to transform entire industries.
From an employer’s perspective, the benefits of misclassification are clear. Turning a worker into a temp or a free agent obviates any need to provide him with benefits. It shields the employer from legal liability for health and safety violations, for industrial accidents, or from wage and hour violations. It invariably lowers such workers wages as well. It makes it impossible for workers to form unions.
In a surprise move just before a full House vote Wednesday, a bill to align construction workers’ pay on some state projects with federal wage standards was bumped to another committee.
H.878 would replace Vermont’s prevailing wage statute with the federal Davis Bacon Act. State and federal rules apply only to certain government-funded projects. The law does not affect public construction or private enterprises.
Unions and labor advocates, backed by the Democratic caucus this session, support the switch. They say adopting the federal standard would “level the playing field” for union shops and contractors who pay benefits.
Worker misclassification is now a bet-the-company issue.
On February 21, 2004, the Illinois Supreme Court rejected a constitutional challenge to Illinois’s Employee Classification Act (the “ECA”), a law that defines most individuals who perform construction-related services as employees of the company who retains them, even if the relationship is set up as an independent contractor relationship. Illinois’s ECA is one of the strictest worker misclassification statutes in the country.
Bartlow v. Costigan arose out of a preliminary finding that a small construction firm, Jack’s Roofing, had misclassified 10 workers as independent contractors instead of employees for periods ranging from 8 to 160 days in 2008. The Illinois Department of Labor calculated a potential penalty for having misclassified these 10 workers as $1.6 Million. Under the Illinois misclassification law, each day that each worker is misclassified is considered a separate violation, with fines of up to $1,000 for a first offense. Willful violations result in triple damages. Subsequent violations double the penalties again.
(Please note that the date of this court decision is actually February 21, 2014)
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By RONNIE ELLISCNHI
FRANKFORT – The state House of Representatives will apparently not vote on a bill to remove the requirement that public school construction projects pay the area’s prevailing wage.
The bill was sponsored by House Minority Leader Jeff Hoover, R-Jamestown, and supporters say its passage would save local school districts and the state several million dollars on school construction projects. Opponents say requiring the prevailing wage for such projects ensures higher work quality and benefits both union and non-union workers’ wages.
Nearly 50,000 of the 75,000 port truckers in the U.S. are misclassified as independent contractors, according to a recent report, which says the misclassification costs federal and state governments significant tax losses.
The Feb. 19 report was sponsored by the National Employment Law Project, Los Angeles Alliance for a New Economy and Change to Win Strategic Organizing Center – all three worker advocacy groups.
Jim Reed, Director of the CCC, has just announced details for the upcoming 12th Annual Underground Economy and Labor Compliance Conference. The conference is scheduled for May 14-16, 2014, at the Riviera Palm Springs in Palm Springs, CA. Early registration is now available, sign up prior to April 6th, 2014, and your registration fee will be waived.
San Rafael’s red-light cameras may be dark, but the city’s relationship with the provider isn’t over.
The city has been instructed by the state to withhold nearly $25,000 in payments to Redflex Traffic Systems Inc. of Phoenix, which serviced the city’s two cameras, because the company failed to pay its contractors prevailing wage when the equipment was installed in October 2009. Prevailing wage is the basic hourly rate paid to public works project employees as set by the state, ensuring contractors aren’t awarded projects based on paying lower wages than a competitor.