Category: Wage and Hour Violations

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Wage Theft Crisis

2.4 Million workers victims of ongoing WAGE THEFT. Helmer Friedman LLP employment law attorneys.

The Hidden Theft: Billions Lost in Unpaid Wages

Injustice is not always visible – especially when companies subtly dip into their employees’ hard-earned wages. A recent study from EPI unraveled how employers are unlawfully paying less than the minimum wage to their employees – a subtle form of theft that is costing workers billions of dollars every year.

The Impact of Wage Theft: By Numbers

According to the survey data, around 2.4 million workers from the top ten most populous U.S. states are victims of this ongoing wage theft, losing roughly $8 billion annually. On an individual level, affected workers lose an average of $64 per week, accounting for almost a quarter of their weekly earnings. If these workers were paid correctly, 31% of those struggling with poverty would be lifted above the poverty line.

The Crime Wage Theft Hotspots

Minimum wage violations are more prevalent in some states than others. Florida leads the pack with a violation rate of 7.3%, followed by Ohio (5.5%) and New York (5.0%). However, when it comes to the highest amount of lost wages due to these practices, Texas, Pennsylvania, and North Carolina top the chart.

The Most Affected Demographics

Unfortunately, this unscrupulous practice is more likely to affect certain groups. Our young workforce (ages 16 to 24), women, people of color, and immigrant workers often report being paid less than the minimum wage. Part-time employees, service industry workers, and unmarried workers, especially single parents, also fall victim to these violations at a higher rate.

The Bigger Picture

When looking at the grand scale of things, the financial exploitation of workers is staggering. Bad employers are stealing around $15 billion annually from their employees, purely from minimum wage violations alone. This amount surpasses the total value of property crimes committed in the U.S. each year. Yet, there is a stark difference in the resources allocated to combat wage theft compared to property crime.

This substantial wage theft affects workers and puts undue pressure on taxpayers and state economies. Around one-third of workers experiencing these violations rely on publicly funded assistance programs like SNAP and housing subsidies. Moreover, wage theft artificially lowers labor costs for the “thieving” companies, creating an unfair competitive advantage and putting downward pressure on wages industry-wide.

The Solution

Enforcing tougher wage and hour laws and strengthening enforcement against wage theft should be a priority to deter higher rates of violations. Furthermore, raising wages for low-wage workers could lead to significant public savings and improvements in our collective health, education, and social mobility.

Nobody should be robbed of their hard-earned money, especially under the guise of employment. Let’s join hands to bring this hidden theft to light and take appropriate action.

One notable example of combating wage theft is the recent victory of Disneyland employees, who filed a class action lawsuit that resulted in a $233 million award for their lost wages. This case highlights how employees can unite to challenge unfair labor practices by collectively filing a class action lawsuit. Such lawsuits allow workers to pool their resources, share their grievances, and present a united front against powerful employers. To effectively pursue this legal avenue, employees should consider hiring an experienced employment law attorney who handles class action cases. These attorneys can guide employees through the legal process, ensuring their voices are heard and their rights are upheld while potentially securing significant restitution for lost wages.

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Wage Theft $912,594 Recovered: Understanding Your Rights and Protections

Race discrimination, retaliation, workplace violation lawyers of Los Angeles Helmer Friedman LLP.

As we navigate the complex world of labor laws, it is essential to understand the rights and protections that safeguard workers against wage theft. Whether it be through crafty tip pools or employers illegally retaining tips from credit card purchases, workers must be aware of their rights to receive the overtime pay to which they are entitled.

The Fair Labor Standards Act (FLSA) is one such piece of legislation that works to uphold these rights. A recent case involving a Londonderry brewery and restaurant, Pipe Dream Brewing LLC, highlights the need for workers to be aware of these protections. The establishment was found to have violated the FLSA by retaining tips paid via credit card transactions and denying overtime wages to exempt employees.

These infractions resulted in the recovery of $912,594 for 44 employees. This sum included back wages, withheld tips, and liquidated damages. The U.S. Department of Labor’s Wage and Hour Division, which facilitated the recovery, also assessed $5,148 in civil money penalties for the tip-related violations.

“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left.”

The law is explicit—managers, supervisors, and employers are strictly forbidden from participating in tip pools or pocketing any portion of employees’ tips for any reason. These protections ensure that workers can fully realize the wages they have lawfully earned.

Federal and State laws, such as California Labor Code Section 351, offer robust protection against wage theft. This code explicitly prohibits employers and their agents, including supervisors and managerial personnel, from sharing in or retaining any portion of a gratuity intended for employees. The law clearly states that gratuities are the sole property of the employees to whom they are given:
“No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left.”

This case clearly illustrates the costly consequences for employers who attempt to circumvent these laws. It emphasizes the importance of employees understanding their rights and the mechanisms in place to protect them. The Wage and Hour Division offers resources like the Workers Owed Wages online search tool to assist those in claiming back wages, should they believe they are owed.

As employees, it is crucial to stay informed about the specific laws that protect us from wage theft, tip pooling, and other unscrupulous practices. The Fair Labor Standards Act safeguards serve as a robust shield, ensuring that workers get the pay they have worked hard for and duly deserve.

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Employer Coerced Kickbacks from Employees after Wage Action

Workplace violations, discrimination, whistleblower retaliation lawyers Helmer Friedman LLP.

Sparklean Laundry Fined Nearly $400K for Labor Violations

A real estate company, Sparklean Laundry, was found guilty of coercing its employees to pay kickbacks on wages that were initially recovered for them. The company was ordered to pay over $281,000 in damages for this act, and an additional $100,000 for retaliating against its employees who were exercising their labor rights. Benjamin Piper, who owned Fox Real Estate Group, Inc., the parent company of Sparklean Laundry, was also ordered to pay the damages.

The U.S. Department of Labor announced the order, which resulted from an earlier case where Fox Real Estate Group, Inc. refused to pay overtime to about 80 employees in violation of the Fair Labor Standards Act (FLSA). The FLSA is a law that protects workers against certain unfair pay practices, and it sets out labor regulations regarding employment across states, including minimum wages, overtime pay requirements, and child labor limitations. Passed in 1938, the FLSA is one of the most critical laws that employers need to understand, as it sets out a wide array of regulations for dealing with employees, whether salaried or paid by the hour.

After an investigation by the Department of Labor, Fox Real Estate Group, Inc. agreed to pay back the overtime wages it had refused to pay earlier. However, the company demanded kickbacks from the employees later and submitted fraudulent receipts purporting to show that the employees had received their recovered wages. The company also threatened the employees.

“Workplace retaliation is intolerable and illegal,” said Regional Solicitor of Labor Marc Pilotin in San Francisco. “The Department of Labor will use all of its tools to combat retaliation, including through requiring employers who retaliate to compensate workers above and beyond the wages their workers are owed.”

The Department of Labor recovered thousands of overtime wages for the employees, and one of the employees received nearly $7,000. However, the court order is making the company pay double the amount of wages to the employees. As a result, the employee will receive a total of nearly $14,000.

Employers and workers can call division staff confidentially with questions, regardless of where they are from, and the department can speak with callers in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243).

“This was a clear case where punitive damages were appropriate against the employer, which both violated federal law and broke its promises to the department,” Pilotin added.

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Good Faith Is A Defense To Labor Code’s “Knowing And Intentional” Standard

Wage and hour violations employment law attorneys Los Angeles Helmer Friedman LLP.

On Remand From California Supreme Court, Court Of Appeal Holds That Good Faith Is A Defense To Labor Code’s “Knowing And Intentional” Standard

Naranjo v. Spectrum Sec. Servs., Inc., 88 Cal.App.5th 937 (2023), review granted Naranjo v. Spectrum Security Services, 2023 WL 3745105, at *1 (Cal., 2023)

In California, if an employer unlawfully makes an employee work during all or part of a meal or rest period, the employer must pay the employee an additional hour of pay. Labor Code § 226.7(c). In Naranjo v. Spectrum Security Services, Inc., 40 Cal.App.5th 444 (2019), the Court of Appeal held that this extra pay for missed breaks (commonly referred to as “premium pay”) does not constitute “wages” that must be reported on statutorily required wage statements during employment (§ 226) and paid within statutory deadlines when an employee leaves the job (§ 203).

The Supreme Court reversed that portion of the Court of Appeal’s holding, concluding: “Although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period. The extra pay thus constitutes wages subject to the same timing and reporting rules as other forms of compensation for work.” Naranjo v. Spectrum Security Services, Inc., 13 Cal.5th 93, 102(2022).

The Supreme Court then remanded the matter to the Court of Appeal to resolve two issues that the parties addressed in their respective appeals but that the Court of Appeal did not reach based on its conclusion about the nature of missed-break premium pay: (1) whether the trial court erred in finding that Spectrum Security Services, Inc. had not acted “willfully” in failing to timely pay employees premium pay (which barred recovery under § 203); and (2) whether Spectrum’s failure to report missed-break premium pay on wage statements was “knowing and intentional,” as is necessary for recovery under section 226.

After receiving supplemental briefing following remand, the Court of Appeal concluded as follows: (1) substantial evidence supports the trial court’s finding that Spectrum presented defenses at trial—in good faith—for its failure to pay meal premiums to departing employees and, therefore, Spectrum’s failure to pay meal premiums was not “willful” under section 203; and (2) because an employer’s good faith belief that it is in compliance with section 226 precludes a finding of a knowing and intentional violation of that statute, the trial court erred by awarding penalties, and the associated attorneys’ fees, under section 226.

The California Supreme Court has granted review.

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AB 257: Council to Regulate Working Conditions for Fast Food Workers

Burger King

AB 257: Council to regulate working conditions for fast food workers; on hold pending litigation and, potentially, a referendum

With AB 257, the Legislature will establish a new and powerful Fast-Food Council, the first of its kind in the State. Sponsored by the Service Employees International Union (“SEIU”) and inspired by its “Fight for $15 and a Union” movement, the Council will be empowered to regulate wages, hours, and working conditions of California’s fast-food employees, a population of workers historically subjected to hazardous working conditions and shamefully low wages.

The Fast-Food Council will be made up of 10 members, appointed by the Governor, Speaker of the Assembly, and the Senate Rules Committee, and will dictate working conditions for employees of chains with at least 100 outlets nationwide. The Council is expected to raise fast food worker wage rates as high as $22 an hour.

Unsurprisingly, the Chamber of Commerce has made destroying the bill a priority. As this article was going to print, a judge temporarily blocked the State from implementing the law as the result of a lawsuit filed by a coalition of giant corporate chain restaurants, which is seeking a referendum on the November 2024 ballot in a bid to overturn the law. “If and when the referendum challenging AB 257 qualifies for the ballot, the law will be put on hold,” said Katrina Hagen, Director of the Department of Industrial Relations.

None of this corporate chicanery would be possible but for the Supreme Court’s obsequious decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) (holding that the Free Speech Clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations). Of course, while the Founders were well aware of the existence of various types of business enterprises (joint-stock companies, corporations such as the East India Company, which was incorporated in 1600, and the like), the Founders did not provide for any corporate rights in the Constitution or the Bill of Rights. Rather, the Founders understood that, to the extent that corporations had any type of personhood, it was a legal fiction limited to a courtroom. But we digress.

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SB 1162: Expanded Pay Data Reporting and Mandatory Pay Scale Disclosures

If you feel you were paid less because of gender, national origin, or race contact Helmer Friedman LLP.

Effective January 1, 2018, California’s Equal Pay Act prohibited employers, with one exception, from seeking applicants’ salary history information and required employers to supply pay scales upon the request of an applicant.

SB 1162 expands upon these pay transparency measures and counters workplace discrimination by requiring employers of 15 or more employees to: (i) include the pay scale for a position in any job posting; (ii) provide pay scale information to current employees and to applicants upon reasonable request; and (iii) maintain employee records, including job titles and wage rate histories, through the term of each employee’s employment and for 3 years after their employment has ended.

SB 1162 also expands covered employers’ pay data reporting obligations. Since 2021, California law has required private employers who have 100 or more employees and who must file a federal EEO-1 to file an annual pay data report with the California Civil Rights Department (formerly the California Department of Fair Employment and Housing) on or before March 31 of each year. SB 1162 broadens these obligations in several significant ways.

First, the bill expands who must file a pay data report so that all private employers with 100 or more employees will be required to file a pay data report regardless of whether they also must file a federal EEO-1, and private employers with 100 or more employees hired through labor contractors will be required to submit a separate pay data report regarding these contracted workers.

Second, in addition to demographic and pay band information, employers’ pay data reports will also need to identify, within each job category, the median and mean pay rate for each combination of race, ethnicity, and sex.

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US $399K Recovered in Overtime Back Pay for Workers at Aurora’s Supermercado Carrera Specialty Grocery Store

Helping Employees Recover and Enforcing Employment Laws Helmer Friedman LLP.

AURORA, IL – While workers at a local supermarket stocked shelves, operated cash registers, and served customers Mexican hot foods and baked goods, their Aurora employer was denying them their hard-earned overtime pay for two years, the U.S. Department of Labor recently found.

After its investigation, the department’s Wage and Hour Division has recovered a total of $399,851 in back wages and liquidated damages for 49 workers at Supermercado Carrera, a family-owned supermarket.

Division investigators determined the supermarket’s operator paid several employees straight-time wages for overtime and shortchanged them of the legally required time and one-half premium for hours over 40 in a workweek. The employer also incorrectly classified some employees as exempt from overtime. These actions violated the Fair Labor Standards Act.

In addition to $199,925 in back wages and an equal amount in liquidated damages, Supermercado Carrera also paid $734 in civil money penalties the division assessed after investigators found that a minor-aged employee worked beyond permitted hours. ​

The nearly $400,000 in back wages and damages our investigation recovered will make a significant difference in the lives of 49 workers and their families,” said Wage and Hour Division District Director Tom Gauza in Chicago. “Typically, small grocers employ low-wage and vulnerable workers likely unaware of their basic rights to the federal minimum wage and overtime pay. Workers in the U.S. have the right to be paid their full earned wages.

In the fiscal year 2022, the Wage and Hour Division’s office in Chicago recovered $6.4 million in back wages and $647,000 in liquidated damages for more than 6,400 workers. Most commonly, the division found violations of overtime and minimum wage. In the first four months of the fiscal year 2023, the office has recovered $1.6 million in back wages and $814,000 in liquidated damages for 1,182 workers.

“We continue to work with local worker’s advocacy groups, consulates, and other community resources to educate workers about their rights. Failing to pay accurate wages is an issue across a myriad of industries,” Gauza added. “Employers or workers with questions should reach out to Wage and Hour for information.”

Learn about FLSA rules for the retail Industry.

For more information about the FLSA and other laws enforced by the division, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for android devices to ensure hours and pay is accurate.

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