Articles Posted in Wage and Hour Laws

On September 16, 2011, federal judge D. Brock Hornby granted a motion for conditional certification of a collective action against FedEx Ground Package System, Inc. (Fed Ex) for violations of the Fair Labor Standards Act (FLSA). A group of Fed Ex drivers brought this case against Fed Ex because they claim that Fed Ex misclassified them as “independent contractors” instead of employees and, consequently, failed to pay them overtime. In granting the motion for conditional certification, Judge Hornby found that the drivers who brought the case held similar jobs and suffered from the same allegedly unlawful policy. Conditional certification is a procedural hurdle that the drivers had to overcome before they could begin to send notices to other drivers who may be eligible to join the lawsuit against Fed Ex.

Many employers misclassify employees as independent contractors and, as a result, fail to respect these misclassified employees’ rights to overtime pay and other workplace protections. If your employer classifies you as an independent contractor but you believe that your employment relationship is more like that of an employee, you should call an experienced employment lawyer to learn more about your rights.

Rep. David Burns, R-Whiting, has reportedly sponsored a bill that would allow employers to pay teenagers $2.25 less per hour than they have to pay workers who are 20 years old and older. The bill would reduce the minimum wage for teenagers from $7.50 per hour to $5.25 per hour. Under this proposed legislation, L.D. 1346, an employer could pay this reduced wage for the first 180 days of the teenage employee’s employment.

Under this new law, employers will have an incentive to hire teenagers instead of older workers. For instance, if an inn needs a housekeeper for the busy summer season, it can hire a teenager for $5.25 per hour or someone older than 19 for $7.50 per hour. Who do you think it is going to hire? That’s right, the teenager. If this bill becomes law, unemployed Mainers who need work to support their families will likely have an even more difficult time finding jobs. After all, there is no evidence that a shortage of unskilled labor exists in Maine.

Another Republican lawmaker, Debra Plowman, is sponsoring legislation that would allow teenagers to work longer hours. The proponents of Plowman’s bill touted it as a way to help teenagers save for college. This new bill would obviously cut against this purported goal. The money that teenagers would earn working additional hours under Plowman’s bill would be reduced by the lower hourly wage they would receive under Burns’ bill. Moreover, as discussed in an earlier post on this blog, as teenagers work longer hours they experience a higher risk of bad grades and behavior problems, such as drug use.

Under current Maine law, with some exceptions, employers may not work minors aged 16-18 more than 20 hours per week while school is in session. The Maine legislature is considering a bill that would allow employers to work minors aged 16-18 32 hours per week while school is in session. The bill would also change existing law and permit employers to work minors aged 16-18 until 11:00 pm on school nights.

Proponents of the bill argue that teens could use the extra income to save for college. However, critics of the law cite a study which says that teens who work more than 20 hours per week during the school year are at higher risk for bad grades and behavior problems, such as drug use and delinquency. There are certainly pros and cons to this bill. Whether it will result in a net benefit to Mainers is uncertain.

A group of people who worked as FedEx drivers have sued FedEx because they claim FedEx misclassified them as independent contractors. They argue that FedEx should have classified them as employees instead.

By treating the drivers as independent contractors, FedEx saved money on overtime pay, unemployment taxes, payroll taxes, and workers compensation insurance premiums. FedEx likely decided to classify these drivers as independent contractors in order to avoid paying these types of taxes, insurance premiums, and wages. If FedEx should have treated them as employees, it will have to pay them unpaid overtime pay and other compensation.

Even if an employer, like FedEx, labels a group of workers “independent contractors,” that does not mean that those workers are automatically independent contractors in the eyes of the law. Whether FedEx should have treated these drivers as employees, instead of independent contractors, depends in large part on the amount of control FedEx exercised over their work. The group of drivers who brought this lawsuit claim that FedEx should have treated them as employees, not independent contractors, because of the amount of control FedEx exercised over their work. The court will have to decide whether the drivers are correct or whether FedEx is correct.

On September 16, 2010, Judge Singal of the U.S. District Court for the District of Maine ruled that a group of former Wood Structures employees may continue to pursue their WARN Act claims against Wood Structures, Roark Capital Group, and some of its affiliated companies. The WARN Act requires certain employers to provide their employees with 60 days notice before a mass layoff or plant shutdown. An employer who violates the WARN Act by ordering a mass layoff or plant shutdown without providing proper notice is liable to each affected employee for an amount including back pay and benefits for the period of violation, up to 60 days.

Wood Structures shutdown its operations in Biddeford and Saco in March of 2009 and, as a result, 170 employees lost their jobs. According to the plaintiffs, Wood Structures and Roark Capital, acting as an integrated enterprise, conducted this mass layoff without providing employees with the requisite 60 days notice.

The Obama administration is considering a policy called the “High Road Contracting Policy.” This policy would give employers that treat their employees better than the law requires an advantage when they compete for federal contracts. It is reported that this policy would advantage contractors that provide hourly workers with a “living wage,” health insurance, an employer-funded retirement plan and paid sick days.

Senators Collins and Snowe have signed a letter to the Director of the Office of Management and Budget, Peter Orszag, expressing concerns that they have with this “High Road” policy. Among other things, they are concerned that the policy would adversely affect small businesses.

Many Mainers take for granted that their employers pay them at least minimum wage or time-and-a-half for overtime. However, for low-wage workers in particular, that is something no one should take for granted. In a recent study of low-wage workers around the U.S., the authors of the study found that employers routinely violate the rights of low-wage workers. Over 25% of the workers they surveyed were paid less than the minimum wage. Over 75% of the workers surveyed who worked over 40 hours per week were not paid overtime. These violations were not trivial or near the margins, either. 60% of the workers paid less than minimum wage were underpaid by $1 or more per hour. The average worker whose employer failed to fully pay him for overtime hours worked 11 hours of overtime per week.

These findings should shock you. If you believe your employer is not paying you at least minimum wage. Or you believe it is failing to fully compensate you for overtime work. You should contact an experienced employment lawyer who can advise you on what to do.