Category: Uncategorized

minimum wage

Minimum Wage Hikes: A Solution to Income Inequality?

Initiated by fast-food workers in New York City, the Fight for $15 is a nationwide movement advocating a higher minimum wage. This push for wage hikes has steadily gained prominence; As of 2017, 30 states have raised their minimum wages to amounts higher than the federal minimum of $7.25/hour. The disparity in minimum wage rates across the federal, state, and city levels is stark. With national movements like the Fight for $15, with increasing income inequality among the bottom 50% of Americans, and with so many state-led policies raising the minimum wage, why is the federal minimum wage so low, and why has it been stagnant since 2009?

Conventional supply-and-demand analysis, and popular opinion, suggests that the minimum wage has a negative effect on employment. However, real world results prove otherwise.

The fast-food giant, McDonalds, claims that its recent wage hikes have resulted in improved customer service, and thus, increased sales. The company’s CEO, Steve Easterbrook, started implementing changes in 2015 to try to improve McDonald’s profit margins and customer traffic. In addition to closing weak stores and simplifying the menu, Easterbrook raised the wage offered to his workers to about $10/hour. He did so in the hopes of incentivizing better customer service and streamlining company changes. It seems to have done just that. McDonald’s US president, Mike Andres, remarked that the wage hike, “has done what we expected it to—90 day turnover rates are down, our survey scores are up—we have more staff in restaurants. So far we’re pleased with it—it was a significant investment obviously but it’s working well.”

A similar wage hike by Walmart further reveals the advantages of increasing the minimum wage. From 2015 to 2016, the retail company spent about $2.7 billion on higher wages for hundreds of thousands of its store workers. Its new part-time wage is $10.58/hour, while full-time workers earn $13.38/hour. Like McDonald’s, Walmart decided to increase wages in the hopes of improving customer service and retaining workers. It seemed a necessary step, to incentivize workers who have increasing responsibility, “in a tightening job market, at a time when working in stores is getting more involved.”

Since its wage hikes, Walmart has reported six straight quarters of sales growth, an increased number of shoppers, and improved customer service scores. Not only do the higher wages increase company profits, but they also make workers better off, and thus stimulate the greater economy: The more you make, the more you spend, the faster the economy grows.

What the cases of McDonalds and Walmart prove, is that an increased minimum wage should be considered more seriously, both economically and politically. In their groundbreaking paper, Distributional National Accounts: Methods and Estimates for the United States, economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman found that the US is deeply unequal; The top 10% alone, own almost 50% of all pre-tax national income. What they report, however, is that raising the minimum wage can help reduce income inequality.

They found that, if the minimum wage is low, like in the US today, then raising it can actually raise employment by raising labor supply. A higher minimum wage makes it more attractive for low wage workers to start work, which increases their productivity, and stimulates growth.

Thus, with technological progress, globalization, and tightening job markets, minimum wage is an important factor of equality in the wage distribution. For the US to combat further economic inequality, policy changes must be made – starting with the federal minimum wage. As Walmart CFO Brett Biggs stated, a higher minimum wage has a domino effect, in that, “associates feel better about what they are doing. They feel obligated to the company to return that investment.” Thus, politicians and business executives weary of paying workers a higher wage need only think of it as a “business investment” for the country – as a necessary step on our way to economic growth and equality.


Distributional National Accounts

sexual harassment lawyer Irvine

Transgender woman files McDonald’s Sexual Harassment case

As Pride month comes to a close, a disheartening story unfolds. McDonald’s is no stranger to lawsuits, and they are once again on the receiving end of one. A woman has filed a sexual harassment lawsuit against the fast food mogul, and the complaint is for lack of a better word, disturbing.

La’Ray Reed was hired in April 2015 as a crew member at a McDonald’s franchise in Redford, Michigan. She states that almost immediately after starting work there, she began to experience sexual harassment from her co-workers and manager. Reed happens to be transgender, and this played a large part in the ensuing harassment.

Very early on in her employment, she states that she received questions and comments from the other employees such as whether she was a “boy or a girl”, whether she was “top or bottom”, and what her “role in the bedroom was”. The sexual harassment continued and the comments became more graphic. She states she was asked, “How big is it?” and people started “talking about having sex with her”.

One of the more bizarre occurrences came in June 2015, when Reed states she was spied on in the women’s restroom. As soon as she exited, she was told by one of the managers to clean out a filthy bathroom in the back of the building which had been used as a broom closet. Reed complied with the request, but then began questioning why she was the only one cleaning such a room out. Typically, employees shared cleaning duties. She was then informed that she was cleaning out the restroom because from now on, that was the only restroom she would be allowed to use.

Perhaps one of the most shocking incidents occurred in late July or August 2015. Reed states she was working the drive-thru position, when a voice came over the headset she was wearing. It was one of her three managers, who said, “You can’t feel it from the front, you have to feel it from the back” for all of the employees to hear. Perplexed, Reed states she then felt another co-worker reach through her legs from behind and grab her genitals. Reed described the incident as “traumatizing”.

Incidents singling out Reed continued. She states one of the managers by the name of Denise would use derogatory terms towards her, such as calling her “boy slash girl”. Reed also mentioned that when the workplace was overstaffed, she would be the one chosen to go home, despite other employees offering to leave and Reed requesting to stay.

Finally, Reed couldn’t take it anymore. She attempted to make a complaint to the corporate manager of the franchise when he was paying a visit to their store. She approached him while he was sitting in his car in the store’s parking lot. She states he appeared “impatient” and said he would follow up and meet with her another time. This never happened.

Reed then attempted to complain directly to the owner of the franchise, Jon Campbell (a named defendant in the suit). Reed gave him a call, and states that he “seemed annoyed”. He told her that he would have one of her managers Noelle call her to discuss the situation, but this did not occur. Reed called him a second time, and in this instance was immediately patched into a three way conversation between Campbell and manager Noelle. In this conversation, Noelle stated that she thought “everything was fine”, and shut down Reed’s complaints.

After the phone call took place, Reed was immediately removed from the work schedule. She called in to the store to receive the following week’s schedule, as employees typically do, and was told that she would have to physically come into the store to get this information. Upon coming in to the store, she found that her scheduled dates of work had been crossed out. Noelle then explained that she had been removed because she was “in trouble”, and advised her to call the other manager Denise. When Reed complied and called Denise, she was notified that she had been terminated. The reason being that she allegedly had three “no call no shows”. Reed immediately questioned the basis of this and demanded proof, but Denise refused to discuss it. She only told Reed to come pick up her final check.

You would think the harassment would end there, with the termination of an employee. Disappointingly, this isn’t the case. Reed went to pick up her final check at the store, and was confronted by another manager, Sheena. According to Reed, she said, “You don’t think I know what you are because of how you dress and look?” The meeting continued its hostile nature, as Reed was told by Denise that in order to receive her final paycheck, she had to sign two forms. In order to get her final pay, Reed complied. It was then that she was handed her final paycheck – for a whopping sixteen cents.

Reed has since obtained representation for a case alleging sexual harassment and discrimination on the basis of sex. She states that the ordeal affected her emotionally and mentally, even leading her to consider suicide. “There were days when I thought everything would be so much easier if I killed myself”.

The restaurant owner and operator, Jon Campbell, commented to Teen Vogue, “We work hard every day to treat our employees and customers with dignity and respect, and discrimination of any kind has no place at our restaurant. As this is a legal matter, I do not intend to comment further at this time.”




Does the EEOC Need to Re-Focus?

A hearing was held on May 23rd by the House Education and the Workforce Subcommittee on Workforce Protections to discuss the “need for more responsible regulatory & enforcement policies” by the EEOC (Equal Employment Opportunity Commission). The EEOC is a government agency which investigates charges of workplace discrimination and works to uphold civil rights laws. However, many are criticizing the operations of the agency for various reasons.

Subcommittee Chairman Bradley Byrne (R-AL) expressed concern at the hearing over the EEOC’s “flawed enforcement efforts under the Obama administration.” He stated, “At the end of 2016, the EEOC had more than 73,000 unresolved cases,” a statistic which he called, “unacceptable”.

Rae Vann, Vice President and General Counsel for the Equal Employment Advisory Council disagreed with the EEOC’s “self-imposed pressure to ‘fish’ for large, class based claims”. She states their strategy is based on “the assumption that widespread workplace discrimination is present in every district and region – and at every company – across the country.” To address the problem, she believes “Rather than focusing on increasing its systematic litigation docket, the EEOC should do more on the front end to ensure that all discrimination charges it receives are properly categorized, investigated, and resolved.”

However, this does not mean that all in attendance were in agreement. Todd A. Cox, Director of Policy NAACP Legal Defense and Education Fund, Inc. disagreed with Vann’s position. He states, “Our country cannot hope to rid the workplace of employment discrimination on an individual case-by-case basis. Moreover, many of these cases would never be prosecuted by the private bar or civil rights organizations with limited resources, especially when the discrimination is occurring in underserved communities or the likelihood of obtaining significant monetary relief is minimal. An emphasis on systemic enforcement makes perfect sense strategically because it allows the EEOC to address and remedy workplace discrimination on a large scale.”

The size of cases picked up for investigation was not the only issues that attendees of the hearing took issue with. Lisa Ponder, Vice President and Global Human Resources Director for MWH Constructors questioned the accuracy of pay gap data. She raised the issue that the gap is based not on gender, but rather on years of experience. The ratio of males in the industry from the baby boomer generation greatly outweighs the number of females in that generation. Female engineers from the baby boomer generation make up roughly 5% of the industry compared to about 20% from the millennial generation. Without a proportionate number of males and females from the same generation (same years of experience) Ponder alleges that there is no way to accurately interpret whether a gender pay gap truly exists. She also expressed the concern that this leads to a “false narrative that could discourage women from pursuing a career in the science, technology, engineering, and math fields.”

Camille Olson, a labor and employment attorney who testified on behalf of the US Chamber of Commerce questioned how the new data would even be realistically utilized. “Despite the excessive burden imposed on employers, the EEOC failed to articulate a clear benefit associated with its proposed collection….In addition to the problems inherent in the data that the EEOC proposes to collect, its proposed statistical approach will also be unhelpful in identifying discrimination.” Additionally, she expressed concerns about potential privacy violations in collecting the pay data, citing that in the “hands of the wrong people”, the information from the reports could cause “significant harm to EEO-1 responders and subject employees to potential violation of their privacy”. She said the “EEOC has failed to articulate a clear benefit associated with its proposed collection” and that it would be “unhelpful in identifying discrimination”.

In spite of the aforementioned grievances, not everything discussed at the meeting was a criticism of the agency. Cox did commend the EEOC for the great impact and effort that has been made to eliminate workplace discrimination, spotlighting the guidance on consideration of arrest and convictions in employment.

“The EEOC’s work on the guidance is not only commendable, it is also consistent with the growing national and bipartisan consensus that we need to rethink our criminal reentry systems to ensure that millions of Americans who have a criminal record, but who have paid their debt to society and are qualified for work, are not unjustly denied the opportunity to reintegrate back into society by the misuse of criminal background checks,” Cox said. “To allow the presence of an arrest or conviction record to bar an individual from meaningful employment forever, would deny to millions that most powerful and important American opportunity—a second chance.”







Are you an employee taking legal action for the first time?

So you are a victim of your employer and wish to take legal action. You have just fallen into the category of an employee taking legal action for the first time! This can be very overwhelming, scary and stressful. This blog has been written to give you some idea on what to expect when you call us.

You must understand that being a lawyer is tough because in an ideal world, the job wouldn’t exist. On the flip side, it’s just as difficult being a prospective client or in need of legal services. No one WANTS to be in that position. But, the need does arise and so the legal services industry continues.

Something we hear all the time from prospective clients who are employees taking legal action for the first time, is that they were very nervous about calling us in the first place. This completely understandable! From the stereotype of the ruthless attorney to how legal action is portrayed in popular culture, there are tons of misconceptions about the process. We’re here to set the record straight, and help to put your mind at ease about what to expect.

  • Call (don’t drop in) the law firm to speak with someone about getting started.
    • Law firms are busy places. People are working hard on upwards of hundreds of cases at a time, depending on the size of the firm. All firms operate differently, but many places do not accept walk in clients for attorney consultation. Instead, you would want to call the firm ahead of time, and let them know you are a potential client. From there someone can assist you, usually with a short, confidential intake process over the phone. This is necessary to get all of the important details which the attorney will be using to evaluate your potential case. This information will then be passed on to an attorney for evaluation, and if they think your case is something the firm can assist you with, you will be scheduled for an in-person consultation with the attorney.*Tip: Be sure to ask ahead of time if there will be a consultation fee involved. Here at Aegis Law Firm, your initial consultation with the attorney is free!
  • A good attorney cares about customer service.
    • It’s one thing to be great at public speaking, convincing juries, or quoting the law off the top of your head. But another crucial part of what makes a great attorney is their ability to connect with the client. When it comes down to it, we are working for you! A lot of people think it’s the other way around. We are proud to serve you, and grateful that you chose our firm for assistance. For this reason, most attorneys are very approachable and want to make the process as easy for you as possible. So don’t sweat that initial meeting – we don’t bite!*Tip: Check out a firm’s web presence to get a sense of their customer service rating. Their website probably includes bios to let you know who you may be working with.
  • How the firm gets paid – hourly or contingency?
    • Typically, firms receive payment from one of two structures: hourly billing, or contingency. Hourly billing is pretty self-explanatory – the firm sets an amount to charge per hour and depending on how much time is spent on a matter that is how much the client pays. Contingency is when the firm does not take any money up front, and payment comes from a settlement obtained at the end. Either way, the amount is mutually agreed upon at the beginning of services, and included in a retainer document that both parties sign.
  • Will I have to go to court?
    • Each case is different, so unfortunately there’s no blanket answer to this question. Many people want to stand up for themselves, but are scared of having to participate in a trial or other court proceedings, especially employees taking legal action for the first time. What can be said, is that going to trial is usually the very last option. Most cases are settled before the lawsuit is even filed with the courts, which is beneficial to both sides. There are several avenues that attorneys may take in order to settle your case with the best result. However, in the event that you do need to go to court, your attorney will work closely with you to prepare you for any appearances you would need to make or address any concerns you have.

So there you have it! Nothing to be scared of, right? If you are an employee taking legal action for the first time, or perhaps you may have an employment issue that you wish to take action on, give our office a call today and we would be more than happy to help you get started!

Is Your Employer’s Tip Policy Legal?

California’s Tip Law

By Cindy Pham

California law is very specific regarding gratuities left employees. It provides that, “every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for”. This means that an employer must pay the employee the full amount of the tip that is left for that employee. This also means that the employer is prohibited from sharing in or keeping any portion of a gratuity left for an employee by a patron. Additionally, an employer cannot credit an employee’s tips against the money it owes the employee. That is because tips are considered “voluntarily” left by a patron for an employee. On the other hand, a “service charge,” that is placed on a bill is not considered “tips,” if they are mandatory and not waivable by the customer. However, if the charge is negotiable or is simply added as a matter of convenience (e.g. “18% gratuity policy for large parties), it is still considered a tip even if it is automatically added. When a tip is left by credit card, it is illegal for an employer to charge any type of credit card processing fee or “accounting fee”. California requires that the employer give the employee the full tip left by the customer and pay the entire credit card processing fee itself.

Tip Pooling

While the concept of tip pooling may not be familiar to many, it is a widespread practice in the service industry, wherein some of the tips received by tipped employees are shared with other employees at the business. In one type of tip pool, the pool is designed to spread the risk of low tipping patrons among all tipped employees and only tipped employees may participate in tip pools; in another type of tip pool, the pools are designed to share tips with non-tipped employees who are considered deserving of tips, but who, for some reason are generally not tipped by patrons (e.g., compare a server v. dishwasher). Mandatory tip pools are legal in the general sense. However, it has been a subject of dispute amount the courts as to which employees may share in the tip pool.

In 2011, the Department of Labor enacted regulations, providing that only employees who customarily and regularly receive tips can share in tip pooling arrangements. Regardless of the employee’s job title, an employee “customarily and regularly” receives tips if he or she: (1) has more than de minimis interaction with the customers who leave the tips, and (2) is engaged in customer service functions. See Montano v. Montrose Restaurant, 800 F.3d 186, 191 (5th Cir. 2015). Since then, the district courts in Oregon (See Or. Rest. &Lodging v. Solis, 948 F. Supp. 2d 1217, 1218 (D. Or. 2013) and Nevada (See Cesarz v. Wynn Las Vegas, LLC, No. 2:13-cv-00109-RCJ-CWH, 2014 U.S, Dist. LEXIS 3094, 2014 WL 117579, at *3 (D. Nev. Jan. 10, 2014)) have attempted to invalidate the DOL’s regulations, by concluding that the 2011 regulations enacted by the DOL are invalid and contrary to Congress’ clear intent.

Recently, however, in February of this past year, the 9th U.S. Court of Appeal in San Francisco in the matter of Oregon Restaurant & Lodging Assoc. v. Perez, — F.3d –, No. 13-25765 (9th Cir. Feb. 23, 2016) issued a decision overruling the decisions of the Oregon and Nevada district courts and upholding the DOL regulations which the Court of Appeal maintains, “is more closely aligned with Congressional intent”.

Unless this decision fails to survive further court challenges, California employers will need to make sure that its current tip pooling arrangements are aligned with the DOL regulations, which prevent tip pools that involve employees whom do not customarily receive tips (e.g., cooks, bussers dishwashers, and kitchen staff). If you believe that your employer’s tip-pooling arrangement is unfair in any way, or that your tips are being shared with other employees who should not be receiving them, contact an attorney to discuss your rights.