HR Compliance

Minimum Wage Controversies Continue

By

Paycom Legal

| Sep 8, 2016

In April 2016, we reported that California and New York became the first states to enact $15-per-hour minimum wage standards. Though no other state has adopted this precedent, New Jersey made an attempt – only to have it vetoed, and a handful of cities have passed similar minimum wage standards.

Wage-related woes also loom large for a major, U.S. fast- casual restaurant chain embroiled in courtroom battle, with nearly 10,000 current and former employees suing the company for unpaid wages.

Here’s a rundown of both situations.

New Jersey Governor Shoots Down Minimum Wage Proposal

On Tuesday, August 30, 2016, New Jersey Governor Chris Christie nixed a proposal to increase New Jersey’s minimum wage from $8.38 to $15 per hour over the next five years. At a grocery store in Pennington, New Jersey, Christie described the proposed $15-per-hour minimum wage as a “really radical increase” that “would trigger an escalation of wages that will make doing business in New Jersey unaffordable.” The Republican governor also argued that the radical increase would cause more small-business employees to be replaced by automated kiosks.

Christie’s veto has prompted liberal groups and Democrats who control the statehouse to make the legislation top priority. In their response to Christie’s decision, the Democrats announced their intention to introduce an amendment to the State Constitution that would place the matter on the fall 2017 ballot for voters to decide. According to Assembly Speaker and lead sponsor of the proposal Vincent Prieto, the current minimum wage is a “poverty wage” and forces families to rely on government assistance. Prieto also said that he’s “confident that New Jersey residents will eventually right this wrong.”

In the meantime, California and New York remain the only states to pass $15-per-hour minimum wage legislations.

Major Fast-Casual Restaurant Chain Accused of Wage Theft in Class-Action Lawsuit

The dynamics of unpaid wages and working off the clock are front and center in a lawsuit involving nearly 10,000 current and former restaurant employees. In the Turner et al. case, Plaintiff Leah Turner, a former manager, alleged on behalf of herself individually and other similarly situated Plaintiffs that the restaurant required nonexempt, hourly-paid employees to work off the clock without pay.

Turner initially filed an individual lawsuit in 2013, but dismissed the case to join a subsequent collective action in Minnesota. Turner was ultimately excluded from the class in the Minnesota case. In 2014, her attorneys filed a separate class-action lawsuit in Colorado – which now includes nearly 10,000 current and former restaurant workers, from various states, claiming unpaid wages. The Plaintiffs assert that despite officially being off the clock, employees were required to keep working until granted permission to leave. In addition, Plaintiffs assert that the restaurants’ failure to pay its employees for off-the-clock work has resulted in unpaid minimum wages and/or unpaid overtime wages.

The case is currently pending, and the Defendant has denied the allegations, stating that it has complied with the Fair Labor Standards Act (FLSA) and has paid its workers for all time worked.

What Does the FLSA Say?

Under the FLSA, covered nonexempt employees must receive no less than the federal minimum hourly wage for all hours worked. The FLSA also generally considers time spent working off the clock as hours worked if the employer requested that the employee perform the work or allowed the employee to do the work.

The Turner case sends a clear reminder that it’s important to establish precise and compliant time-and-labor policies and solutions.

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