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Articles Posted in Minimum Wage

Tennessee Employment Law Blog explores recent wage and hour lawsuits in this entry to inform Tennessee hourly wage workers about common means employers use to underpay employees.

Times are tough. Tennessee businesses and employers across the nation are meeting tough times with layoffs and cutting costs. But when employees’ pay is illegally cut, some employees have chosen to get tough back and are able to recover unpaid wages or unpaid overtime by working with employment lawyers on wage and hour lawsuits.

Wage employees in Pennsylvania are taking on Aramark Corp., the Philadelphia-based food-service giant, that allegedly cheated its workers out of overtime pay and the lunches and breaks required by federal workplace law under the Fair Labor Standards Act (FLSA). This week several Aramark wage workers filed a summons in Philadelphia Common Pleas Court in what may become a class-action lawsuit. Their attorney estimates damages of up to $2M for the 3,000 workers employed to provide service Aramarak’s stadiums

Previously in April of last year, Aramark settled, without admitting wrongdoing, a similar case involving 419 workers. The present filing entered as evidence a sample pay stub that demonstrates, according the plaintiff’s attorney, the company’s deliberate design to make it difficult for workers to determine their amount of hours worked.

Some allegations center on the unpaid overtime for when an employee worked in two separate locations for Aramark. Additionally, 30 minutes was automatically deducted from hours worked, even though half-hour lunches were not always available to employees. For some workers, not receiving payment for these automatically deducted 30-minute lunches meant they were being paid less than minimum wage.
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A study released earlier this week looking into Tennessee construction worker wages found that one in five construction workers was either misclassified as an independent contractor or paid under the table since 2006. The study was presented to Tennessee committee on House Consumer and Employee Affairs this Wednesday.

The study was based on state and federal agency data and conducted by professors at Middle Tennessee State University and Tennessee Tech. It concluded that 38,680 Tennessee workers were misclassified or paid under the table, which impacted the state by a nearly $15M loss in unemployment taxes and $92M to workers’ compensation premiums. According to the study, those employers who don’t pay appropriate wages and associated employment costs poison the well for those honest employers who pay their premiums and follow federal and Tennessee employment law.
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As Tennessee Law Blog foresaw in the early months of last year in Tennessee Wage and Hour Cases on the Rise, wage-and-hour lawsuits have continued to explode across the county. In one report by a national employment law firm, non-government wage and hour settlements in 2009 grew 44% over 2008’s lawsuits.

Settlements for wage and hour lawsuits also increased in 2009. For those filed in federal court under the Fair Labor Standards Act (FLSA), lawsuit settlement amounts rose from $253 million in 2008 to $364 million in 2009 for the top 10 wage and hour cases of those years. The greatest growth in wage and hour lawsuits was along the coasts – California, Washington New Jersey, New York, Massachusetts – though the trend was upward in other states as well.
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A new class (or collective) action has been filed in Tennessee against a hospital for automatically deducting a lunch break from workers schedules. Apparently, the payroll system would deduct a specific period of time for lunch from the employee’s pay even when the employee did not take lunch. This automatic payroll deduction would effect both regular pay and overtime received by employees.

In the age of automated systems and computers it is tempting and easy for employers to set up standard clock in and out procedures. Unfortunately, these systems do not always match reality. Also, it seems that it is usually the employer that gets the benefit and the employee that gets short changed on their paycheck.
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The Memphis News began a series today titled Tipping a Tricky Business that covers many of the wage and hour legal issues facing tipped wage employees, especially when they are required to share their tips.

Written by Fredric Koeppel, this first installment covers a variety of tip-related subjects that have appeared in previous Tennessee Workplace Law Blog, such as tip pooling and illegal paycheck/tip deductions.

If you are a tipped employee, tips are the bulk of your paycheck. A tipped employee with 10 years with the company often receives the same on his or her paycheck as someone who just started. As Koeppel’s piece points out, “Some diners tip well and some don’t[…] Some tip on the amount before taxes and some on the after-tax total.” Furthermore, some restaurants charge their wait staff for tips paid on a credit card as a means of recovering the charges the restaurant must pay for credit card transactions.
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A $2.6-million lawsuit was filed in Los Angeles Superior Court on Tuesday alleging a California car wash paid its employees less than minimum wage and denied overtime. The lawsuit was filed by the state’s attorney general against the Auto Spa Express, its owner, and its present incorporation as Sunset Car Wash.

This CA lawsuit is reminiscent of our reportage earlier this year in Unpaid Wages and Unrecorded Hours Subject of Local Nashville, TN Car Wash Workers… blog.
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Current and former Massachusetts Wal-Mart employees will receive $40 million in unpaid wages from the world’s largest retailer, Wal-Mart Stores Inc. This class-action wage and hour lawsuit is the largest in the history of the Bay State.

The cause of the wage lawsuit, which appears pervasive in the company by the numerous wage and hour lawsuits settled last year in December (read the Tennessee Law Blog’s coverage of last year’s Wal-Mart wage settlement) was the company’s denial of rest and meal breaks, refusal to pay overtime, and the manipulation of time cards to lower employees’ pay.

As many as 87,500 employees will receive a payment of between $400 and $2,500, the average check being for $734. Any Wal-Mart or Sam’s Club employee paid wages between working in the period between August 1995 and December 2009 is entitled to payment.
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As I bring out my cold cut sandwich made from the remains of Thursday’s turkey and settle in at my home office computer to write today’s Tennessee Employment Lawyer blog, I can’t help but think about the recent Department of Labor lawsuit against West Liberty Foods and Henry’s Turkey Service, an Iowa company, being sued for underpaying their mentally handicapped workers.

Back in February, officers raided an old schoolhouse where 21 men known as “Henry Boys” had been living and working for 35 years for Henry’s Turkey Service cleaning and gutting turkeys. Last Wednesday, the Department of Labor filed suit against West Liberty Foods who contracted and allegedly oversaw operations of the processing plant. This would include the decision to pay these workers a wage of $65 a month regardless of hours worked, much less pay appropriate overtime.

The Department’s wage and hour lawsuit alleges, in addition to paying less than standard minimum wage and failing to pay overtime rates, that Henry’s Turkey Service additionally failed to accurate books. This failure to keep accurate books hit another business hard this week, this time a local restaurant chain in the Great Lakes region.
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Las Vegas is a great city to visit, partly due to its heavy dependence on the service industry. Recently, though, some professions in its service industry that rely on tips (and whose employers count on those tips to exceed minimum wage in order to not pay regular minimum wages) have been making the news. Most noticeably, card dealers and adult dancers.

Earlier this year, Tennessee Law Blog reported on Vegas wage lawsuits filed by dealers against casinos for illegal tip pooling. (More information on tip pooling available on our Tennessee Employment pages.) Of recent invention, and one major cause of the tip pooling lawsuit, was the casinos’ policy of having dealers’ tips pooled and, allegedly, illegally distributed to pay non-tipped floor supervisors. Like many tip pooling cases employment lawyers see, this was allegedly done to boost pay to the supervisors at the expense of those dealers who legally qualify as tipped employees.
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The Fair Labor Standards Act (FLSA) was established to protect all employees. The minimum wage provisions of the FLSA apply to employees that receive tips as a part of their income as well as those who do not. Employees who receive tips as part of their income, like waiters and waitresses, bartenders, bell boys, and delivery people, are sometimes victims of employer practices that actually reduce the employees income below the minimum wage. When this happens, an employee does have a remedy under the law.

On top of the increasingly common problem where employees simply do not make enough in tips plus their lessened hourly rate to equal minimum wage, there are three other common areas where employers have encroached on the wages of tipped employees: tip pooling, tip retention and uniform costs.

Tip pooling is where the employer requires the employee to participate by pooling their tips in a group for a distribution across a pool of employees. Tipped employees cannot be required to participate in a program that must tip out to employees that are not common tip recipients, such as dishwashers or cooks. The rationale is that those employees are already above the minimum wage threshold and the tips are property of the person who receives the tip, not the employer.

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