Category: Wage & Hour Rights

Japanese Employee Dies from Exhaustion – How ‘Salaryman’ Culture Affects the Workforce

Japanese Employee Dies from Exhaustion – How ‘Salaryman’ Culture Affects the Workforce

The circumstances surrounding the death of 31 year old Miwa Sado have just been made public, though she passed away in 2013. Sado was a political reporter, and an overworked one at that – which it has now been revealed was the cause of her death by heart failure. NHK (Sado’s former employer) reported that she had worked about 159 hours of overtime in the month before her death. This means that she was working in just one week what most full time employees clock in a full (two week) pay period.

Stories such as Sado’s are not unfamiliar to Japanese culture – they even have a special term for it, “karoshi” which translates to “death by overwork”. The term was originally coined in the 1970s as Japan’s economy boomed. Labor lawyers and civil rights groups have been pressing for legislative change since the 1980s, but the trend has continued in spite of this.

In December 2015, a similar tragedy took place. Matsuri Takashi, a 24 year old employee of Dentsu, an advertising agency, jumped to her death from the company dormitory. “Ms. Takashi’s death was caused by serious depression triggered by overwork and harassment,” Hiroshi Kawahito, a lawyer representing her case, told CNN Money. In the month leading to her death, Takashi clocked about 105 hours of overtime, according to investigators. After concluding its investigation, Dentsu announced that they would be capping overtime hours to a maximum of 65 per month.

But how do work hours measure up across different countries? According to the International Labour Organization, Americans work an average of 137 hours more per year than Japanese workers. The United States is arguably the most overworked developed nation in the world – and it comes down to more than just hours worked per week.

  • The United States is the only industrialized country which has no legally required annual leave program – even Japanese workers are required to receive 10 days off per year
  • The United States is not one of the 134 countries which sets a limit on maximum hours worked per week
  • There is no federal law requiring paid sick days in the United States
  • The U.S. is the only country in the Americas without paid parental leave (maternal or paternal) to care for/bond with new children – the average in most other countries is 12 weeks of paid leave and 20 weeks of paid leave throughout Europe.

 

Sources:

https://20somethingfinance.com/american-hours-worked-productivity-vacation/

https://www.usatoday.com/story/news/world/2017/10/06/japan-struggles-karoshi-death-overwork-after-deaths-2-young-women/738915001/

http://money.cnn.com/2017/10/05/news/japan-work-overwork-woman-dies-karoshi/index.html

What a Trump Presidency Might Mean for Family Leave Laws

With the Electoral College officially selecting Donald J. Trump as the next President of the United States, many are now wondering what changes may take place upon his inauguration. Particularly relating to employment, you can expect to see many changes including family leave time for workers.

Trump has proposed a plan which would give women who recently gave birth (note, not all new mothers) 6 weeks of partial paid leave through an expansion of unemployment. While this may initially sound great, upon inspection of the plan there is much to be desired. The first issue arises from the source of funding for the program, which is supposed to be unemployment. This is a social service which is grossly underfunded as is, without adding the element of maternity leave. Because of the lack of funding, it is estimated that women on this plan would only receive approximately 30% of their weekly wages.

Other glaring issues with the program include the length of time offered. Six weeks is far below the recommended minimum of 12 weeks for parental bonding time after a child is born/adopted. This brings us to the next issue – the coverage would only be available to women that just gave birth. This means that fathers and adoptive/foster parents are ineligible to the benefits.

There are alternatives to Trump’s proposed plan, including a bill sponsored by Connecticut Congresswoman Rosa DeLauro and New York State Senator Kirsten Gillibrand called the FAMILY Act. The acronym stands for Family and Medical Insurance Leave Act, and would require all employers (regardless of company size) to provide employees (regardless of age/duration of employment) with 12 weeks of paid leave for various reasons. It would not only provide coverage to women that just gave birth, but also to new fathers, adoptive parents, foster parents, or people needing to take time off for their own serious medical condition/to care for a family member with a serious medical condition. In contrast to Trump’s plan which would be through unemployment, FAMILY would be run by a new office of the Social Security Administration. It would be funded by small contributions by employees and employers as a payroll deduction. This may be a concern upon first hearing about the plan, but the deduction is extremely minimal – 2 cents for every $10 earned by the worker. It would enable participants in the program to make up to 66% of their regular weekly wages during their time away from work. Both insurance benefits and administrative costs would be covered by the contributions. In order for the plan to work, all employees would be required to participate in the contribution if the bill is passed (you can’t opt out). If people were able to opt-out, the structure of the funding would be changed drastically, making the deductions too great for those that want to participate.

The FAMILY Act had been gaining support in Congress, and was expected to pass under a Hillary Clinton administration. However, now that Republicans will be controlling both the White House and Congress, the bill will most likely be facing bigger impediments than it did previously.

In order to encourage opponents of paid family to support the policy, a non-profit organization called PL+US intends to put the pressure on nay-sayers. IN addition to a possible political action committee, PL+US will be launching a campaign highlighting companies with excellent paid leave policies – as well as highlighting companies with the worst leave policies.

Currently, the only national family leave program is The Family & Medical Leave Act of 1993, which provides up to 12 weeks of unpaid leave to certain employees to care for themselves or a family member in the event of serious illness. However, the fact that the leave is unpaid is not the only problem with the program. It also comes with many stipulations which leaves a majority of workers ineligible for the time off. The first requirement for an employee to be eligible for leave, is that they must work for a “covered employer”. Covered employers are those which a) employ at least 50 people for 20 or more workweeks in the current or preceding calendar year (private sector) or b) are a public agency (regardless of how many employees). The next qualification is that the employee must have worked for the employer for at least 12 months, and given at least 1,500 hours of service during the past 12 months. Finally, the employee must work at a location where the employer has at least 50 employees within a 75 mile radius. In some situations, the FMLA leave may be taken intermittently as needed.

While it is impossible to say at this point what may happen in the coming year, one thing is clear – big changes are coming to family leave laws. Hopefully, they will be for the better.

Sources:

https://www.dol.gov/general/topic/benefits-leave/fmla

http://www.nationalpartnership.org/research-library/work-family/paid-leave/family-act-fact-sheet.pdf

http://www.nationalpartnership.org/issues/work-family/family-act.html?referrer=https://www.google.com/?referrer=http://qz.com/839086/after-trumps-election-and-clintons-loss-supporters-of-a-paid-parental-leave-bill-in-congress-seek-fresh-help-from-republicans/

http://qz.com/839086/after-trumps-election-and-clintons-loss-supporters-of-a-paid-parental-leave-bill-in-congress-seek-fresh-help-from-republicans/

http://thehill.com/blogs/pundits-blog/healthcare/309533-congressional-leaders-should-reject-trumps-maternity-leave

 

wage

Wage case against McDonald’s continues…

Yet another McDonald’s franchise is in the news again for court drama. This time, the case is regarding a wage and hour class action lawsuit (ref: wage and hour lawsuit) against a chain of 16 locations in Pennsylvania. The case was initially filed back in 2013, after an employee quit due to the outrageous fees associated with the chain’s mandatory pay card system. After quitting, she called a law firm to see if the practices were legal – which they weren’t.

The issue arises from the employers (owners Albert and Carol Mueller) requiring non-managerial employees to accept payment via a JP Morgan & Chase pay card, rather than being issued an itemized check/cash. This violated the Pennsylvania Wage Payment Collection Law (WPCL), which states that, “wages shall be paid in lawful money of the United States or check”. Employers will sometimes utilize a pay card system in order to avoid costs associated with printing and distributing checks, which can be expensive. Cash is not usually a practical form of payment for established businesses. It’s difficult to track and itemize. Another reason employers may be shifting towards the option of pay cards, is that banks may offer incentives to employers for providing them with new customers, aka the employees.

The courts reasoned that the pay cards are not “lawful money”, though the employers insisted it is a “functional equivalent”. However, the court stated that it was not a “functional equivalent” due to the fees that could be incurred for various reasons such as inactivity. The class action representative, Natalie Gunshannon, chose not to activate her pay card after reviewing the hefty fees, which included $1.50 per ATM withdrawal, $10 per month after 3 months of inactivity, 75 cents per online bill payment, and $1 each time they checked the balance. Additionally, users of the cards were allotted only one free over-the-counter withdrawal per deposit. After the initial withdrawal, a $5 fee was incurred each subsequent time. “I tried to work with the company. They refused. I tried the main office in Clarks Summit. They refused,” Ms. Gunshannon said. “I never activated the card. I refused the fees. I just want it to be fair.” An expert witness in the case stated that between the fall of 2010 and the summer of 2014, the employees were subject to a collective estimate of 47,000 fees.

While this case is set in Pennsylvania, it would most likely fare similarly here in California. The DLSE has opined that pay cards can be legal forms of payment so long as they are voluntary on the part of the employee. This means that the employee must have the option to receive a check or other form of payment if they would prefer. The DLSE states that the alternative form of payment must be “easily turned into cash” without a fee. Because the employees in the Pennsylvania case were not given the option to an alternate form of pay other than the card, the system would still be considered illegal in California. Then of course there is the issue with the fees, which also would be considered unlawful and cause to bring suit or request reimbursement.

An inquiry to the DLSE on this subject was answered back in 2008. Carl Morris and Daniel Schwallie asked whether their payroll services complied with California labor laws. The letter cites California Labor Code section 212, which reads:

“No person, or agent or officer thereof, shall issue in payment of wages due, or to become due, or as an advance on wages to be earned:

(1) Any order, check, draft, note, memorandum, or other acknowledgment of indebtedness, unless it is negotiable and payable in cash, on demand, without discount, at some established place of business in the state, the name and address of which must appear on the instrument, and at the time of its issuance and for a reasonable time thereafter, which must be at least 30 days, the maker or drawer has sufficient funds in, or credit, arrangement, or understanding with the drawee for its payment.

(2) Any scrip, coupon, cards, or other thing redeemable, in merchandise or purporting to be payable or redeemable otherwise than in money.

(b) Where an instrument mentioned in subdivision (a) is protested or dishonored, the notice or memorandum of protest or dishonor is admissible as proof of presentation, nonpayment and protest and is presumptive evidence of knowledge of insufficiency of funds or credit with the drawee.

(c) Notwithstanding paragraph (1) of subdivision (a), if the drawee is a bank, the bank’s address need not appear on the instrument and, in that case, the instrument shall be negotiable and payable in cash, on demand, without discount, at any place of business of the drawee chosen by the person entitled to enforce the instrument.”

Sources:

http://www.dir.ca.gov/dlse/opinions/2008-07-07.pdf

http://www.employmentlawdaily.com/index.php/news/mandatory-payroll-debit-card-violates-pennsylvania-wage-payment-law/

https://thinkprogress.org/after-ruling-that-mcdonalds-can-t-pay-workers-in-bank-cards-the-bank-pays-up-79e8661e1d95#.5nzbjtqoc

 

Overtime

Obama “Time Card” overtime rule faces new challenges

A new bill was introduced on September 29th by Republican senators, which would make changes to the overtime bill introduced by the Obama administration back in July. The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (or H.R. 6094) passed in the House of Representatives 246 to 177 and will delay the Department of Labor final rule until July 2017. The changes to current overtime laws were supposed to go into effect on December 1st , but the updated bill seeks to spread out these changes over the next 5 years, rather than everything going into effect all at one time. Not only would the bill raise the overtime threshold gradually from $23,600 to $47,476 through the 5 years, it would also require an “independent government watchdog study” of the rule after it’s first year in effect. If the rule is found to negatively impact “American workers and our economy, non-profits—including colleges and universities—along with state and local governments and many Medicaid- and Medicare-eligible facilities such as nursing homes or facilities serving individuals with disabilities will be exempt from any further increases under the rule.” Additionally, it would prevent a possible threshold raise in 2017, as well as the automatic increases that were supposed to occur every 3 years.

Senators Lamar Alexander (R-TN), Susan Collins (R-ME), James Lankford (R-OK), Tim Scott (R-SC), and Jeff Flake (R-AZ) introduced the legislation in fear that the sudden doubling of the salary threshold would be too extreme, and therefore detrimental to various employers. Senate Labor Committee Chairman Alexander states, “the Overtime Reform and Review Act makes urgently needed modifications to the administration’s rule, which will otherwise on December 1 force changes in overtime pay that are too high, too fast and will result in employers, non-profits, colleges and others cutting workers’ hours, limiting their workplace benefits and flexibility, as well as costing students more in tuition….This is a moderate, bipartisan approach that should be able to pass both Houses before December.” Senator Collins adds, “The Department of Labor’s overtime rule will be extremely damaging to small businesses, universities, nonprofit organizations, and service industries, particularly in rural states like Maine…While it is time for a reasonable update in the threshold, doubling the threshold overnight will hurt workers and employers alike and limit the services provided by nonprofits and educational institutions. Our legislation takes a common-sense, bipartisan approach that would phase-in an increase to the overtime threshold over five years, providing businesses with additional time to prepare for this major federal rule change.” Similarly, Senator Lankford states, “This federal overtime rule is devastating for small businesses, colleges and nonprofits all across America, but particularly in states with a low cost-of-living…The economic realities and regional cost of living differences that exist throughout the country were completely ignored in favor of yet another one-size-fits-all approach by this administration. I have been told from small business owners, colleges and nonprofits that this federal overtime rule will quickly lead to job loss, increased tuition, and the reduction of charitable services. I think this rule should be pulled entirely, but at least its implementation should be delayed or slowed.”

A copy of the Overtime Review and Reform Act has not yet been made available to read, but proponents of the bill (i.e. employees) will surely be disappointed by its terms. Meanwhile, letters of support for the revised bill and its originators have been pouring in. The White House issued a Statement of Administration Policy on September 27th, strongly opposing H.R. 6094. The statement gives facts supporting the necessity of the December 1st implementation. Additionally, the statement clearly and in no uncertain terms indicates that if the bill reaches President Obama’s desk, he will veto it. Perhaps the most powerful text in the statement reads, “While this bill seeks to delay implementation, the real goal is clear—delay and then deny overtime pay to workers. With a strong economy and labor market, now is a good time for employers to provide these essential protections for workers, who cannot afford to wait.”

Sources:

https://www.aamc.org/advocacy/washhigh/highlights2016/470736/093016housepassesdolovertimeruledelay.html

http://www.employmentlawdaily.com/index.php/news/new-senate-bill-would-further-delay-ot-rule-implementation-potentially-create-exemptions/

 

 

Domino’s Franchise Wage and Hour Lawsuit Settles

The class action lawsuit against a Georgia Domino’s franchise has settled, awarding class members $995,000 collectively. The lawsuit was initially filed in 2015, and aimed to recover the unpaid wages due delivery drivers for the chain, who were not properly reimbursed for the use of their personal vehicles. Not being paid enough to cover vehicle expenses caused the drivers’ pay to dip below the federal minimum wage at times.

Defendants Cowabunga Inc. and Cowabunga Three LLC are one of the largest Domino’s franchises in the country, with over 100 stores across 3 states (Georgia, South Carolina, and Alabama). According to the company website, they employ over 1,800 people. Ironically enough, the company website also touts their company values to include “respect, responsibility, trust, fairness, and contribution”. A total of 565 drivers opted into the lawsuit, which means the average amount each individual will receive is $1,138. The named plaintiff Chadwick Hines will also receive a $7,500 service award. Chadwick was employed by the company in Savannah, GA from approximately April to October of 2014.

The minimum wage violation occurred because while the company reimbursed their drivers, the amount was too little to compensate for out of pocket costs drivers incurred by using their own personal vehicle to make deliveries. By using their personal vehicles, drivers became responsible financially for upkeep of the car including the cost of gas, insurance, vehicle maintenance, and depreciation. According to the court complaint, drivers were reimbursed only one dollar per delivery. The IRS reimbursement rate for the applicable period of time ranged from $.55-$.57 per mile, while AAA found that the average cost to drivers in the job field (who drive a sedan) was actually $.592-$.608 per mile. Per the complaint, “The driving conditions associated with the pizza delivery business cause more frequent maintenance costs, higher costs due to repairs associated with driving, and more rapid depreciation from driving as much as, and in the manner of, a delivery driver. Cowabunga’s delivery drivers further experience lower gas mileage and higher repair costs than the average driver used to determine the average cost of owning and operating a vehicle described above due to the nature of the delivery business, including frequent starting and stopping of the engine, frequent braking, short routes as opposed to highway driving, and driving under time pressures.” Because Cowabunga only reimbursed drivers $1 per delivery, an average delivery of 5 miles round trip means that drivers were only being reimbursed $.20 per mile. The drivers should have received, at the very least, $2.80 reimbursement per delivery. With all of the out of pocket costs factored in, the drivers received an hourly pay rate of only $3.65-$4.95 per hour – far below the federal minimum wage of $7.25 per hour. The complaint also mentions that several employees brought these pay issues to the attention of the management, but nothing was ever done to address the concerns.

The suit alleges a violation of the FLSA (The Fair Labor Standards Act), which is a “federal law that protects employees’ rights in order to ensure workers receive fair wages, are fully compensated for all hours worked, and work in a safe work environment. The law ultimately protects workers from potential exploitation or abuse from employers.”

Many people don’t realize it, but delivery drivers (and others who drive for a living) are often subject to many forms of wage and hour violations. Aside from not being reimbursed for vehicle expenses such as gas and insurance as this lawsuit mentions, they are also typically vulnerable to lost lunches and breaks. Because more often than not they are the sole operator of the vehicle, no one is there to relieve them for breaks and lunches when they are on a time crunch or have a deadline to meet. Additionally, there is no manager there to ensure a break or lunch occurs. Cases such as this one are rampant in the driver work field.