DC’s Initiative to Raise Tipped Minimum Wage Billed as Combating Harassment

DC’s Initiative to Raise Tipped Minimum Wage Billed as Combating Harassment

Last week, the board of elections in Washington, DC, approved a ballot measure for the upcoming primary election on June 19 that will ask voters whether to raise the minimum wage for tipped employees in the restaurant industry from its current rate of $3.33 per hour to match the capital city’s minimum wage for all other workers by 2026. Advocates of the measure are framing it as a way of protecting low-income workers, especially women, from harassment and abuse, the Washington Post reported:

[C]ritics of the split-wage system say some workers face intimidation and retaliation when they tell their bosses that tips came up short. They say low-income workers in the restaurant industry deserve the same predictable income as other employees. …

“In this Me Too moment, in this Time’s Up moment, we have to stand up for women and empower women and really call this two-tier wage system for what it is: a source of sexual harassment,” said Diana Ramirez, director of the Restaurant Opportunities Center D.C., which is sponsoring the ballot initiative.

“If you know that you are getting a base wage from the employer, and a customer is acting inappropriately with you, you don’t have to put up with that behavior anymore to make a good tip,” she said.

Restaurant owners and some workers who earn much more than the minimum wage on the basis of tips oppose the measure, saying it will eat into restaurants’ already thin profit margins and force them to raise prices, cut jobs, and perhaps abandon tips altogether in favor of a flat hourly wage.

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Labor Department to Resume Supervised Settlements of Admitted Wage and Hour Violations

Labor Department to Resume Supervised Settlements of Admitted Wage and Hour Violations

The US Department of Labor’s Wage and Hour division announced last week that it would soon begin a six-month pilot of the Payroll Audit Independent Determination (PAID) program, which will give employers an avenue for resolving potential overtime and minimum wage violations under the Fair Labor Standards Act by self-auditing and voluntarily reporting these violations to the division:

This program will ensure that more employees receive back wages they are owed—faster. Employees will receive 100% of the back wages paid, without having to pay any litigation expenses or attorneys’ fees. The program requires employers to review WHD’s compliance assistance materials, carefully audit their pay practices, and agree to correct the pay practices at issue going forward. These requirements improve the employers’ compliance with their minimum wage and overtime obligations and further protect the rights of workers. …

It is purely the employee’s choice whether to accept the payment of back wages due, and employers are prohibited from retaliating against the employee for his or her choice. If the employee chooses to not accept the payment, the employee will not release any private right of action. Additionally, if the employee chooses to accept the payment, the employee will not grant a broad release of all potential claims under the FLSA. Rather, the releases are tailored to only the identified violations and time period for which the employer is paying the back wages.

Wage and hour disputes already being litigated or investigated by the Labor Department will not be eligible for resolution through the PAID program. Employers also cannot use the program to repeatedly resolve the same violation. The six-month pilot is expected to launch in April; once it concludes, the department will assess its effectiveness and decide whether to maintain it going forward.

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Court Upholds Minneapolis Minimum Wage Ordinance

Court Upholds Minneapolis Minimum Wage Ordinance

A district judge in Hennepin County, Minnesota ruled last week that an ordinance passed by the city of Minneapolis last June raising the local minimum wage to $15 an hour was legal under state law, the Star-Tribune reported:

Judge Susan Burke ruled that the Minnesota Fair Labor Standards Act, the state minimum wage law, doesn’t preclude municipalities from passing local wage ordinances to meet the needs of their communities. …

Minnesota’s hourly minimum wage is $9.65 for large employers — those with annual gross revenue of $500,000 a year or more — and $7.75 for small employers. Those rates will rise with inflation in 2018. Under the Minneapolis ordinance, large businesses — those with 100 or more employees — must phase in the $15 minimum wage by July 1, 2022. Small businesses have until July 1, 2024.

Minneapolis is one of several cities throughout the US that have sought to implement a local pay floor higher than the statutory minimum in their state. The first major city to do so was Seattle, which voted to raise its minimum wage to $15 an hour in 2014. The jury is still out on what effect that decision had on employment and wages in the city, with two studies last year coming to conflicting conclusions. Critics of local minimum wage increases say they make it more expensive and complicated for businesses to operate in these areas and ultimately harm workers by reducing total employment in low-wage jobs.

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Investigation Points to Large Gaps in US Minimum Wage Enforcement

Investigation Points to Large Gaps in US Minimum Wage Enforcement

Federal, state, and local minimum wages are a perennial point of contention in American politics, with conservative politicians and employers saying they suppress employment and hurt small businesses, while unions and labor activists say higher pay floors are necessary to ensure that low-wage employees are able to meet their needs. Less discussed is the matter of how strictly minimum wage laws are enforced in the first place. The answer? Not well, according to a recently concluded investigation by Politico, which found that “workers are so lightly protected that six states have no investigators to handle minimum-wage violations, while 26 additional states have fewer than 10 investigators,” Marianne LeVine writes:

Given the widespread nature of wage theft and the dearth of resources to combat it, most cases go unreported. Thus, an estimated $15 billion in desperately needed income for workers with lowest wages goes instead into the pockets of shady bosses.

But even those workers who are able to brave the system and win — to get states to order their bosses to pay them what they’re owed — confront a further barrier: Fully 41 percent of the wages that employers are ordered to pay back to their workers aren’t recovered, according to a POLITICO survey of 15 states.

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How the Workplace Will Change in 2018

How the Workplace Will Change in 2018

Over the past few years, we have witnessed a marked acceleration in the pace of change in the workplace. Each year brings with it new innovations, ideas, and passing fads, as well as social, political, and economic events that affect employers all across the world. 2017 was no exception: Tight labor markets driving competition for talent, concerns over automation and displacement amid the growing embrace of new technologies, the first year of the Trump administration, and the rise of the #MeToo movement were just a few of the many events and trends that impacted the working world last year. In 2018, we anticipate that some of these developments will continue to reverberate, while new challenges and opportunities will arrive.

Here are some of the major developments that employers can expect to see this year, in the US and around the world:

The Sexual Harassment Reckoning Will Only Grow

In the second half of 2017, revelations of sexual harassment, misconduct, and assault poured out of Silicon Valley and Hollywood, sparking a long-overdue conversation about the treatment of women and the harboring of known abusers in these male-dominated industries, as well as in politics, media, and other fields. Powerful men, from Hollywood moguls to tech CEOs to members of the US Congress, were toppled by multiple allegations of sexual misconduct ranging from inappropriate workplace behavior to outright assault. Organizations in all sectors are facing unprecedented public attention to their sexual harassment policies, how diligently they enforce them, and whether they uphold an inclusive and respectful work environment. If the reckoning didn’t come to your industry in the past few months, it likely will this year. Business leaders in corporate America and around the world will have their past and present behavior scrutinized, and some will be exposed as abusers and face strong public and investor pressure to step down. Addressing toxic workplace cultures that enable sexual harassment will become an issue of even greater concern for directors and HR leaders. Companies can ill afford to close their eyes and hope for this problem to go away on its own; time really is up.

The Private Sector Will Lead the Way on Raising the Minimum Wage

Congress is unlikely to take action to increase the federal minimum wage in 2018. Some states will raise their minimum wages, as will some cities, while other states will take action to preempt local hikes. Meanwhile, companies will take it upon themselves to increase their pay floors in order to attract and retain talent in a tight labor market. As large employers of low-wage hourly workers like Walmart and Target increase their own minimum wages, other companies will need to follow suit to remain competitive.

Technology, Social Media, and Journalists Will Continue to Bring Transparency into Company Culture

Companies’ cultures and employer brands are in the spotlight now more than ever before. The decisions, approaches, policies, and beliefs through which companies manage their employees will play a dramatically larger role in how consumers and investors (not just candidates and employees) view the company. In 2018, this will put pressure on companies to manage their employer brands through HR as aggressively as they protect their consumer brands through PR.

CEOs Will Be Forced to Take Stands on Political And Social Issues

Throughout 2018, the political polarization and dysfunction that has prevailed in Washington, D.C. recently will almost certainly persist, while gender equality, diversity, immigration, LGBT rights, and other issues with major workplace implications will remain hot-button topics. While some CEOs have already found their voices when it comes to responding to the news of the day, others will feel pressure this year from customers, employees, and investors alike to be more vocal about their beliefs and to back them up with concrete actions within their companies.

AI Will Play a Bigger Role In Hiring, Raising the Risk of Algorithmic Bias

The use of AI and algorithms in hiring decisions has already grown dramatically. In 2018, companies will continue to adopt these technologies, but many will also begin to recognize the danger of algorithmic bias. While these automated solutions have shown promise in terms of improving quality, efficiency, and even fairness in the recruiting process, they also run the risk of harming diversity in the workforce by replicating biases that already exist within the company.

Adoption of Wearables in the Workplace Will Increase

In 2017, 3 percent of companies introduced wearable technology in the workplace, giving employees smart badges to monitor their behavior in order to track productivity and identify inefficiencies in the use of office space. In 2018, as more companies adopt technology that can track the location and behavioral data of employees, companies will begin to use this data to redesign workspaces, schedules, and workflows to maximize employee productivity. As these technologies become more mainstream, employers may not have to worry as much as they think about employees resisting their implementation, but should think carefully about how much actionable insight they are gaining by monitoring their employees.

More Employees Will Change Jobs Due to a Lack of Respect

While compensation continues to be the top driver of attraction for candidates globally, respect was the the fourth most important driver in our Global Talent Monitor Report for Q3 2017. In 2018, the labor market will continue to remain tight and employees will feel that they have enough control to speak openly about the lack of respect or appreciation. If companies aren’t able to provide increased compensation or opportunities for growth, they should look at ways to improve employees’ sense of respect in order to retain talent.

Walmart Raises Entry-Level Wages, Expands Parental Leave

Walmart Raises Entry-Level Wages, Expands Parental Leave

Walmart, the world’s largest private employer, announced on Thursday that it was raising its starting hourly wage from $9 to $11 per hour, introducing a more generous parental leave policy, and offering one-time cash bonuses based on length of service for its US workforce. CEO Doug McMillon revealed the changes in a note to employees:

[W]e’re raising our starting wage to $11 an hour for Walmart U.S., Sam’s Club, Supply Chain, eCommerce and Home Office hourly associates effective in February. We’re also providing a one-time bonus to hourly associates that pays a larger amount the longer you’ve been with our company. Associates that don’t benefit from the new starting wage increase are eligible for the bonus and it will range from $200 to $1,000 depending on your length of service. …

I’m also excited to tell you that we’re making an important change to benefits by expanding our paid leave policy to provide full-time hourly associates with 10 weeks of paid maternity leave and six weeks of paid parental leave. This expanded parental leave also applies to salaried associates and to parents who adopt. We will also contribute $5,000 to the cost of adoption.

McMillon cited the corporate tax cut passed by the US Congress in December as part of what prompted the company’s decision. Several other major US employers, including AT&T, Wells Fargo, and Boeing, have also announced plans to invest part of their tax savings in raises or bonuses, though most companies have said these savings will mainly be spent on debt repayment, dividends, and stock buybacks.

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Florida Court Overturns Minimum Wage Hike in Miami Beach

Florida Court Overturns Minimum Wage Hike in Miami Beach

In 2016, a year that saw a wave of ballot initiatives raising the minimum wage in various states and localities, the city of Miami Beach, Florida, passed an ordinance to raise the local pay floor to $10.31 per hour at the start of this year and gradually raise it further to $13.31 by 2021—well above Florida’s state minimum wage, which currently stands at $8.10. Local political leaders said at the time that the higher pay floor was meant to help workers cope with the high cost of living in the city, among the highest in the state.

The Florida Retail Federation, Florida Restaurant & Lodging Association and Florida Chamber of Commerce sued the city in December 2016 to prevent the law from going into effect, arguing that it was preempted by state law. Last March, a state circuit court ruled against the city, which appealed to a higher district court.

In December, that court upheld the judgment against Miami Beach, finding that a state law enacted in 2003 preventing local governments from establishing a higher minimum wage than the state or federal standard was still in force despite a later decision by voters in the state to raise the minimum wage statewide. Sarah Smith Kuehnel, an attorney with Ogletree Deakins in St. Louis, went over the court’s reasoning when that ruling was handed down last month:

In 2004, Florida voters passed a citizens’ initiative to amend the Florida Constitution, establishing a higher, statewide minimum wage. The amendment expressly allowed “the state legislature [and] any other public body,” to increase the minimum hourly rate above the federal standard, but it left subsection two of section 218.077 intact, without addressing whether local governments can establish their own wage floors. …

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