Posts Tagged ‘wage and hour suits’

Overtime? It’s on the House

Well, isn’t this a shame:

Brad Fitch, president and CEO of the Congressional Management Foundation, told Bloomberg BNA Feb. 16 that House “Democratic chiefs of staff are freaking out” about finding room in their budget for overtime wages.

It’s not clear whether the Obama administration’s forthcoming edict on overtime will apply to legislative staffers, but House Democratic leadership decided it would be prudent for their members to at least gesture toward the spirit of the controversial rule by preparing for compliance. [BNA Daily Labor Report] Now “the rule is creating administrative headaches” and more:

“We don’t have a set-hour kind of situation here; some kids work 12, 14, 16 hours a day, weekends, and I feel terrible that I cannot afford to give raises to the staff,” Rep. Alcee Hastings (D-Fla.) told Bloomberg BNA Feb. 11.

With $320,000 slashed from members’ representational allowances (MRAs) over the past four years, “I don’t see how we could pay overtime” for the “17 or 18 people that each of us is allowed to have—that’s problematic for me,” added Hastings, a senior member of the House Rules Committee.

Some members fear that an overtime mandate will result in having to send staffers home at 5 p.m., leaving phones unanswered and impairing constituent service. “Most members are of the sentiment that it’s impractical to be paying overtime,” said former Virginia Democratic Rep. Jim Moran, now a lobbyist, who suggests that members choose to close one of their district offices or reduce constituent correspondence to adjust to a smaller staff number.

In the bonbon box of schadenfreude, this is one of the ones I would save to eat last.

“An Economic Analysis of Overtime Pay Regulations”

From Donald Boudreaux and Liya Palagashvili for Mercatus on a topic we’ve covered a lot. Abstract:

Under the Fair Labor Standards Act, employers must pay workers who work more than 40 hours in a week time-and-a-half for every hour worked over 40. Numerous exemptions to this requirement exist, including for salaried workers who have “executive, administrative, or professional” (EAP) duties and have a annual base salary of more than $23,660. The Department of Labor recently proposed removing the exemption for EAP workers earning an annual base salary of between $23,660 and $50,400, which would extend mandatory overtime pay to an additional 5 million workers. While the Department of Labor claims that this change will encourage additional hiring, improve the well-being of employees, and lead to higher paychecks, economic theory and empirical evidence suggest otherwise.

A new study for the Mercatus Center at George Mason University provides a thorough analysis of the Department of Labor’s proposed overtime rules, finding that the rules will fail to achieve their objectives and will reduce the diversity of labor contracts used across different industries in the United States. Research indicates that the rules will increase compliance costs for firms, and that employers will respond to the new requirements in unintended ways. In particular, employers will be forced to move some employees from salaries to hourly pay or find other ways to clock their work.

Colleges and the overtime edict

The damage from one of President Obama’s worst unilateral edicts, overtime for junior managers and other workers with middling salaries, is going to radiate through every sector of the productive economy. That includes academia: “The University of California school system, for instance, faces a $39 million-a-year tab for raises to avoid paying overtime to thousands of postdoctoral scholars, librarians and specialists. The University of Iowa says it would limit work hours of staff. And a state university in Missouri could cut some employee benefits.” [WSJ]

Gate Guard v. Perez: the sequel

Last month we told the story of a Texas business that managed to clobber the U.S. Department of Labor in court over its challenge to the company’s use of independent contractors. The Fifth Circuit granted the company a substantial award in legal fees to punish the department for its bad faith in litigation.

Now, Coyote relates a personal encounter in which he runs into a man at a Houston steakhouse who turned out to be the owner of that company, Gate Guard:

I refused to believe him until he showed me a picture of him with the check. He had had it blown up into one of those huge golf tournament checks. I told him he was my hero and tried to buy him drinks the rest of the night, but when I got up to leave, I found he had actually paid my tab. I drank that evening on the Department of Labor’s dime, I guess.

Labor and employment roundup

  • Immigration-related rules on the one hand, national-origin discrimination rules on the other: “Employers could get sued for following the law” [Sean Higgins, Washington Examiner]
  • Should anyone doubt labor relations as an academic field tilts way left, here are numbers [Mitchell Langbert, Econ Journal Watch]
  • Connecticut high court opens door to letting kids of dismissed workers sue employers for lost consortium, on top of suits filed by the parents themselves [Daniel Schwartz]
  • Obama scheme to yank millions of workers off salaried status is a real economic menace [Trey Kovacs, CEI, earlier]
  • Panel discussion marks 80th anniversary of National Labor Relations Act with lawprofs Richard Epstein and John Raudabaugh, Bill Samuel (AFL-CIO) and Mark Schneider (Machinists), moderated by Hon. Joan Larsen of Michigan Supreme Court [Federalist Society video, National Lawyers Conference]
  • “Employment-related class action settlements hit high in 2015” [12th annual Seyfarth Shaw Workplace Class Action Litigation Report via Staffing Industry Analysts] EEOC Employee Charge trends, annual report [Hiscox, and note map on p. 4 of employee lawsuit hotspots including Illinois, California, Nevada, and New Mexico]

More courtroom losses for EEOC, Labor Department

I’ve got a new post at Cato summarizing four recent cases in which judges have rebuked the Equal Employment Opportunity and Department of Labor, awarding attorneys’ fees against the agencies in two cases (Gate Guard and Freeman Cos.) and rejecting two major EEOC initiatives against wellness programs (Flambeau) and severance package language (CVS). Excerpt:

Why are independent, strong-minded courts so important to a free society? One reason is that they – and often only they – are the ones who can stop government agencies from trampling on the rights of the citizens….

Imagine what these agencies and others would be getting away with were our judiciary someday reduced to a spirit of subservience to the executive branch of government.

Law firm that files overtime suits agrees to settle overtime action

“Law firm Morgan & Morgan PLLC has agreed to pay a former employee the wages she alleged are owed because the firm misclassified case managers as exempt from overtime pay, resolving a proposed collective action, according to documents filed Thursday in Georgia federal court.” [Law360; earlier on overtime actions against this firm, which itself files overtime suits]

Choke the “gig economy,” gag workplace innovation

Amazon is hiring on-demand drivers to implement its Amazon Flex same-day-delivery service. Given the confused state of federal wage-hour FLSA law as inherited from the 1930s, and the ever intensifying legal pressure from class action lawyers and various levels of government, will this arrangement eventually be upheld as legal? Who knows? “By the time courts and Congress take a decade to reshape labor law, the companies will have moved on to the next thing.” [Ira Stoll, Future of Capitalism]

Or is even this too optimistic a view? The premise is that the labor law apparatus would like to catch up with the cool new economy, but is just too klutzy and slow. But the sad truth may be that catching up isn’t the point: the public officials in charge of the system, and the unions that back them, don’t particularly mind whether they choke off innovative forms of work organization.

EEOC pay reporting: the better to sue you with, my dear

“Under a new rule proposed by the Equal Employment Opportunity Commission, all companies with more than 100 employees would be required to submit summary pay data each year. Since 1966, large companies have reported to the EEOC the number of their employees by sex, race, ethnicity and job group. The new proposal would add to that list pay data in 12 salary ranges, [with individual salaries] grouped together to protect privacy.” [USA Today, EEOC press release] “The data will be used to identify employers that may be engaging in pay discrimination so that the agency can target its enforcement resources where problems may be likeliest to exist. The proposal would cover more than 63 million U.S. workers, according to the White House. The plan… won’t require legislative approval.” [WSJ]

Aside from driving a high volume of litigation by the EEOC itself, the scheme will also greatly benefit private lawyers who sue employers, including class action lawyers. An employer might then weather the resulting litigation siege by showing that its numbers were good enough, or not. Would today’s Labor Department and EEOC policies look much different if the Obama administration frankly acknowledged that it was devising them with an eye toward maximum liability and payouts?