Minimum Wage discussions

Since I am now again limited in replying to anything in nearly any other thread without being accused of ‘hijacking’ I shall continue the discussion here.

“tipped employee minimum wage” is not what I said. I said “There are indi owners here on this board that pay less than minimum wage, and have been doing so for quite some time.”

$5 per hour is less than minimum wage by both Georgia and Federal law. Mileage is not wages. Tips are not wages. Tips are not paid by the employer. The only WAGE the EMPLOYER pays in this example is $5 per hour. No amount of ‘context’ can change that fact.

Just for discussion though, the minimum wage required by Georgia law is $5.15 per hour. BUT both Georgia and Federal law state that where rates are higher, those rates apply. Since the Federal minimum wage is currently $6.55 per hour, federal minimum wage applies. No matter what law is applied, $5 is less than minimum wage in BOTH cases.

It is very important for business owners to keep up with changing laws and regulations affecting their business. Trade magazines and organizations are a good place to look for information specific to your industry. Sometimes even within an industry, laws can vary state by state. Laws that apply to most state business in your state are frequently announced in local newspapers. Here is an example of where a local newspaper covers a change in Federal law that changes how Georgia state law is applied:

Minimum wage rises to $6.55 an hour starting Thursday

By MICHAEL E. KANELL
The Atlanta Journal-Constitution
Published on: 07/24/08
Seven decades after Franklin Roosevelt signed the law creating a minimum wage, each increase still sparks a version of the original debate. This week is no different.

The minimum wage rises Thursday from $5.85 to $6.55 an hour — part of a boost that will lift it to $7.25 an hour next summer — with many business representatives decrying the change while low-wage workers and advocates say it’s about time.

And not enough.

“If you work full time, you should not be living in poverty,” said Cindia Cameron, Atlanta-based national organizing director of 9to5, the National Association of Working Women. “Work should be a way out of poverty.”

The minimum wage is now about one-third of the average wage. It was about half the average wage during the 1950s and 1960s.

Yet in 30 states, Thursday’s change is a yawner: They already have higher wage floors — the highest being California and Massachusetts at $8 an hour and Washington at $8.07 an hour.

In Georgia, the new floor matters: About 210,000 Georgians work for the minimum wage, according to a 2006 study by the Georgia Policy and Budget Institute. About 461,000 others, while making a little more than the minimum, would also likely get a boost because of the change, the GPBI said.

While that includes some teen workers, the vast majority are at least 20 years old.

For a full-time worker, Thursday’s $28-a-week raise would mean a year’s pay of $13,624. That is below the official poverty line for a family of three — and about one-third of the Georgians affected by the change are parents, according to the GPBI.

Since FDR, many businesses have argued that any kind of wage floor not only damages profits, by forcing companies to pay the minimum to even the least-experienced worker, but is actually counterproductive.

“Government price-setting has never been good for the economy, and they are setting the price of labor,” said William Dunkelberg, chief economist for the National Federation of Independent Business. “If you want more people hired, you don’t make it more expensive to hire them.”

Labor accounts for about 70 percent of business costs — even more for small businesses, Dunkelberg said. Multiply each hour worked by each worker and a modest increase adds up to trouble, he said: You force companies to either take a smaller profit or pass along the added costs to their customers. “There is no free lunch. It is coming from somewhere.”

But that is a narrow view, argued Holly Sklar, director of Business for Shared Prosperity, a network of executives and businesses that support a higher minimum wage.

Higher wages are actually good for the companies that pay them, as well as for the overall economy, she said.

“What people forget is that workers are not just workers, they are customers,” she said. “Higher pay reduces employee turnover, and that reduces costs.”

Economists have studied the issue for decades with varied results. And while studies do not show dramatic job loss because of the wage, even advocates acknowledge that, for a business at the edge of profitability, higher costs do hurt.

Still, they argue that — in an era of soaring energy prices — the problem is much broader. “Jobs are being lost, but that has to do with the economy and very little to do with wages,” Cameron said.

Moreover, when the economy was growing more robustly, minimum wages were not raised, so there is some catch-up to do, she said.

The minimum wage should at least keep up with the overall economy, she argued: American productivity has grown 83 percent in the past three decades.

Adjusted for inflation, the median U.S. wage has gained only slightly in that time. But the minimum wage has done even worse, falling 22 percent.

“What is really wrong is that American workers have not been sharing with the growth of the country,” said Bruce Raynor, president of UNITE HERE, a New York-based union that represents hospitality workers, including 7,000 in Georgia. “To match the buying power of the minimum wage in the 1960s, it would have to rise to $9 or $10 an hour. I think this is an important, small step.”

The law will affect an estimated 2 million workers directly, more than half of them full time, he said. He dismissed the idea that a higher minimum means job loss as “pure nonsense.”

No — but it’s not layoffs so much as jobs that are not created, said Jackie Kinlaw, owner of Quik Cash Pawn Shops in Sugar Hill and several area convenience stores.

Both those businesses face ceilings on revenue — the legal limits on loans at one, reluctance at the other of cash-strapped customers to pop for chips or beer after they fill up their gasoline tanks.

That leaves his companies scrambling to trim costs.

“You’ve got to have some people, but you can have less people,” Kinlaw said. “That is something you can control.”

With a full supply of experienced job candidates, the most likely to lose out are those with no experience, he said. “If I’ve got a kid who is learning, I may be ready to do that at $5 an hour. At $7 an hour, I’m not willing to do that.”

When you are busy, you have to take advantage of many time saving ways to stay abreast of laws that affect your business. Reading the local paper is just on of those resources.
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If its that big of a concern to you then get another job that doesn’t include tips or mileage reimbursement. Since you really feel your being treated unfair, then move on.

I have people tell me that about once a week. Here is an answer I gave here before:

[i]Underpayment of wages in violation of the law causes an unfair downward pressure on ALL wages in the same market and industry. If a competitor of yours is allowed to under pay employees and also enjoy greater profits and or cheaper prices on pizzas, then you are put in a position where you must cut costs to remain competitive. You may even have to lower wages to remain profitable.

Ignoring competitors or any employers that cheat or defy the law hurts everyone, not just their employees. If you just get another job, you are allowing the problem to continue, and that, I believe is what has happened in the pizza industry today. Wages have finally come so low and minimum wage has increased to the point that many places are now in violation of minimum wage laws. Most drivers never do the math, and therefore never know. Many owners aren’t even aware of what the law says. As long as people keep applying for delivery jobs, you figure the pay must be OK. [/i]

I believe that quitting and getting another job, while ignoring employers that illegally pay below minimum wage, drives wages down everywhere and hurts your pay anyway. In my opinion, people quitting and getting better paying jobs elsewhere has driven wages down for delivery drivers to the point it is below minimum wage in many if not most places nationwide. Now that minimum wage is on the rise, violations are occurring much more frequently. Most drivers have no idea what the law says, so they never know their rights have been violated. I am working to change that.

I totally agree that underpayment of wages in violation of the law is totally unacceptable.

However, what no one (particulaly you) has be able to demonstrate is a) if there is such wide spread violation of the law and b) it is so easy to demonstrate then why have you, and your fellow drivers (including those oh so vocal drivers on TTPG) failed to follow up on this. Why do we not hear all over the news of these big franchise groups and all these small independants (which you clearly know are violating minimum wage laws) are all being taken to task.

I fully understand that you have another grievance with your employer but if it is so clear cut why have no other drivers at your store not taken up the issue? and if it is so clear why has it taken so long for nothing to happen?

If it is so clear cut then surely we would hear something in the news? Drivers have nothing to fear becuase as you stated in a previous post they can not be dismissed for complaining about my pay or work conditions, and you can not be dismissed for discussing the issues with your colleagues.

So why is it that none of these law violators who are pushing down labour prices have been taken to task?

I am so sick of reading this crap…move on

ditto… I’ve never seen anyone so obsessed about such a weak topic… Its crazy really.

As to why I have not filed a complaint with the DOL, that is answered here:

So Gregster what action have you taken against your employer

I can’t tell you for sure why other drivers have not taken action. I have spoken to a few drivers who have called the DOL to complain, but they have been dissuaded from filing a complaint basically because they asked the wrong questions. All of the people I know who have called get told ‘but there is no law that says you must get paid 55 cents per mile’. As I believe you and others can see here it is difficult to understand what the law says and how to interpret that in to practical guidance. Frankly I believe that most people (even the people on the phone at the DOL) just don’t understand what the law says and what it means when applied to the pay situation of delivery drivers. (ever hear of anyone getting wrong tax advice from the IRS?)

Most drivers that I know do not file complaints with the DOL because they fear they will be fired or suffer other consequences or just don’t want the hassle. Even though the law protects them, they could still be fired for some other “unrelated” reason and then have to file a lawsuit for redress of the issue. Most just don’t want the hassle or feel that the risk isn’t worth the reward.

Where are the big lawsuits? I mentioned one here before, but that was probably in the thread that was deleted. The Castillo class action:

excerpt from: http://127.0.0.1:4664/cache?event_id=94 … MuFI_vYnVo

The Castillo Class Action

  In July 2004, Franklin Castillo, a Pizza Hut delivery driver, filed a class action lawsuit in Los Angeles County Superior Court against Pizza Hut, Inc. and RLLW, Inc., a Pizza Hut franchisee (Castillo et al. v. Pizza Hut, Inc. et al. (Super. Ct. L.A. County, 2006, No. BC318765)).  In February 2005, Castillo and two additional Pizza Hut drivers, Christopher Ostrowski and Danny Ljungberg (collectively the Castillo plaintiffs), filed a first amended complaint asserting causes of action for unpaid wages under Labor Code section 1194 et seq., violation of Labor Code section 2802 and California regulations, unfair business practices under the Unfair Competition Law (UCL), and failure to allow rest and meal breaks.  The Castillo plaintiffs alleged that defendants, who required them to use their own motor vehicles to make deliveries, refused to fully pay minimum wages, failed to indemnify them from necessary expenses and costs incurred as a consequence of their duties, failed to allow meal and rest breaks, and failed to pay statutory "reporting time" pay.1  They sought damages, unpaid wages and unpaid reporting time, restitution, and penalties, as well as injunctive relief.  

  [u][b]In April 2006, plaintiffs Castillo and Ostrowski entered into a class action settlement agreement with Pizza Hut, Inc., in which Pizza Hut agreed to pay $5.1 million into a settlement fund [/b][/u]and the named plaintiffs and class members would release their claims against Pizza Hut and related "Released Parties."  For purposes of the agreement, the class was defined as "any Pizza Hut employee who was employed as a driver by Pizza Hut and who actually worked in a Pizza Hut restaurant owned and operated by Pizza Hut in California or at any time during the Class Period and who did not opt-out of the Litigation."2 

The Castillo class action is based on California law, not federal law. California law required full reimbursement of mileage expenses no matter what wage is paid, not just for minimum wage situations. The principal remains the same though, and it is what basically led me to research what federal law might require on the same subject.

As to why we don’t see more class actions… I have asked the very same thing when I first became aware of and later more fully understood, what federal law actually says. My belief is that foremost, most drivers never know the law is being violated. Second, those that do suspect the law is being violated either fear reprisal or get turned away from the DOL for asking the wrong questions. Third, of the very few that get past all of those hurdles and successfully file a complaint against the big3, the big3 realize the major implications of having such a damaging class action make the news and let the cat out of the bag, or even worse go to court and eventually have to pay (5 to 10 years later likely) that they wisely (and certainly much more cheaply) agree to ‘settlements’ and simply pay the back wages and legal costs, all for the low cost to the Plaintiff of a simple “non-disclosure clause”.

Others obviously ARE interested in these topics. Feel free to just ignore the topics you have no interest in and have nothing to contribute.

I am contributing by saying I’m sick of seeing these topics… Isn’t there a forum dedicated to these types of subjects? I really don’t know anyone that is interested. The only thing they may be interested in is arguing with you.

And you have proof of any of these settlements or is this just general hearsay?

I must say that I find it very hard to believe that anyone who knows that they are being paid an illegal wage doesn’t want to fill in a form or report their employer? In such a litigious society as the US that just doesn’t make sense!

I live in Washington, a very worker friendly state, and I couldn’t get anywhere with my state DOL after days of calling and phone tag. I wasn’t even dealing with an iffy tip-credit violation, but a much more concrete case of the reimbursement not even coming close to actual expenses, and time shaving to boot. Even if a driver knows they are a being ripped off and is motivated to do something about it, it’s still a huge uphill battle to get the government to do anything. Those employees get the same pay whether they’re sitting at their desk cruising Craiglist or actually doing the work for which they are supposedly paid, so what do you think their preference is? Perhaps I should start advertising my past employer’s misdeeds on Craigslist…

I also couldn’t get anywhere with the health department, even though I was describing the violations in detail and offering myself and the names of several other former employees as witnesses. The worst things that were going on were the kinds of things that no one was going to do when the health inspector is in the store, like reusing food that was sent back from unhappy customers, up to and including draining the buffalo sauce out of wings that had gone out, been with the customer, and sent back, and pouring it back into the communal bucket.

The point is that it’s not as simple as filling out a questionnaire or making a phone call, it’s a long, drawn out time consuming battle with hostile participants, and if your employer finds out what you’re up to, you’ll most likely be fired or otherwise retaliated against. That’s not legal either, but proving it requires yet another battle with yet another government agency, more time and energy down the drain. As a driver all I wanted to do was get the job done and make money, I shouldn’t have to navigate the murky waters of wage law and enforcement simply to collect a fair wage and reimbursement, that’s just sinking more of my (uncompensated) time into the hole I’m already in. That more drivers just shrug and do the work is hardly surprising given the situation, especially with the economy providing a surplus of desperate people who are ripe for exploitative labor practices.

As far as all of these “give it up gregster”, “we’re sick of this gregster” posts, what I hear is methinks thou doth protest too much.

so lets get this straight:

a) the owners don’t take these compaints seriously
b) the DOL don’t take these compaints seriously
c) the government doesn’t take these compaints seriously
d) the health department (what that;s got to do with MW I just don;t know but I’ll humour you) doesn’t take these compaints seriously.
{there’s a theme here I’m sure}
e) you don’t want to give up a job that clearly violates the law by unfairly compensating you and get one that does.

well why didn’t you say that up frount - we’d have all taken you much more seriously!

If they would not take your complaint seriously in a labor friendly state like Washington, there must have been something questionable.
I live in South Carolina, not known for its labor friendly environment. A high school kid worked for me for 3 days and dropped off the face of the earth. I ran payroll, her W-4 was not completed correctly. I ran her a check putting deductions as they should be, and called her house and left a message for her to come in and fix W-4 and get her check. A week later I called and left another message. No response. I saw her in the grocery store and reminded her she had a check, she ignored me. A couple of months passed I sort of forgot about it, but the check was in my desk. W-2 forms went out, she called the store and left a message for me to call her. The next afternoon I called and no answer. I was then called by an investigator from department of labor. In her complaint, filed that day, she said that she did not care about getting paid so did not pick up the check. When she got W-2 she felt that we were commiting fraud and needed to be investigated. Also we were not flexible in our scheduling to allow her to work for us and accomidate all of her activities and that should be addressed.
I had to spend many hours over 2 weeks time responding to this complaint and ended up with a file at dol with a warning for not informing employees, in writing, of when and where they have to get their paycheck. Fortunately I did document when I contacted her concerning the check and I kept the original check here so I could prove by check number that it was printed in the time frame she worked for me and available when it should have been.

It took this girl 5 minutes to download the form and fill it out and fax it in. And even though her complaint was obviously frivilous, it took me 2 weeks to deal with it. If her complaint had any substance at all it would have taken much longer. I have my copy posted in my office to remind me how simple it would be for a former employee to screw you over if you don’t follow the rules.

“non-disclosure clause”<- Pretty much takes care of that, huh?

Did you read why I haven’t filed a claim? Besides, it doesn’t matter to me if you believe me. What matters is that you believe in the laws I have quoted. Not a single person has ever shown me a law or court case that contradicts what I have found. I have even posted an article where a lawyer confirms the laws mean what they say about mileage and minimum wage. Still people refuse to believe it is true.

If mileage is not required to be paid by law, then why pay it? If paying mileage is ‘the right thing to do’ then paying anything less then the full cost is not doing the right thing.

The thing is, I happen to like the work, I’d simply like to be paid fairly for it, and for my compatriots to be paid fairly as well. The problem is that most people that realize that they are being ripped off simply leave the industry, heck even I did eventually, and these are the very people who might be able to do something about the exploitation. It’s like a brain drain situation, and given my opinion of the Big 3, that may even have been their goal all along. I mean, I have to assume that these people are not idiots, there must be some reason that they pursue the policies that they do, perhaps having an uneducated and complacent workforce makes business sense. Things like that happen to make me angry though, so I continue to advocate reform in my spare time.

As for the government, you’re missing my point. Even though I had clear and unambiguous evidence of not only wage violations but food safety issues that should have shut the place down, I didn’t have the stamina necessary to urge the government into action. I was safely at another job by the time I really raised a stink, so it was just so much effort to try to get the bureaucracy rolling, that it wasn’t worth it to me over a place I no longer worked for, and I suspect that is the pattern in general. As said, I spent days on the phone being redirected around various agencies, I filled out e-forms, gave my real name and identifying info, even printed out and filled in hard copies of complaint forms and sent them in, all for nada, not even a call back or confirmation. In short, they didn’t even try to verify my allegations, they just filed them and forgot them. I could point out that the restaurant industry as a whole has a lot more pull in politics than a motley bunch of drivers and servers, but I think I’ve made that point sufficiently already.

It sounds like you got very unlucky with regards to who’s desk this girl’s complaint landed on. I wish it were that easy to get the DOL involved, as said I can’t even get them to return a phone call, and my complaints aren’t nearly that flimsy. For all I know, I could just have the worst luck in the world and my calls are always picked up by the worst jobsworth clock punchers there, but my experience seems to be pretty indicative judging from conversations with other drivers.

so its hear say then.

Yes, I did read why you haven’t claimed but there are plenty of other drivers out there not just you.

My point is that if this practise is so widespread AND your interpretation of the IRS limit is correct then why is no one taking any action?

Objection your honor! Asked and answered. But for the sake of those just joining in, I digress. As we’ve (Gregster and I) repeatedly demonstrated the difficulty of getting government involved ad -nauseum, as well as the disorganized group that food service people often find themselves in due to the transient nature of the work. We’ve got no problem at all finding people who’ve been exploited or feel that they have, that’s easy. The difficult is getting them to do anything in an organized method, it’s like herding cats. Also, Gregster and I are parts of the Vanguard, the early adopters if you will of the new fair labor movement for the service industry. Fortunately we got the time and energy at the moment, since I think this is the time politically, and I can finally dust off some of my more ambitious PR ideas to unleash on the Big 3 and their imitators. Regardless, it should be an interesting few months.

my question was ‘And you have proof of any of these settlements or is this just general hearsay?’

Gregster can not provide any proof - so that then is hearsay!

This is EXACTLY my previous point to you - you raise a point and it MUST be valid despite anything that is said on here - we raise a point and if you don’t agree with it then there is always some reason that you can wiggle out of it.

No, for lots of reasons you have no proof of settlements so guy this is hearsay!