This is the fourth installment in The Fraud List: Fair Labor Series
Since 1938, the Wage and Hour Division of the Fair Labor Standards Act (FLSA) has protected working class citizens from exploitation from their employer by ensuring time and a half for overtime pay in certain jobs. While overtime compensation is widely acceptable in most positions, not every worker qualifies to receive overtime, and not every employer is willing to play by the rules.
In order to be qualified to earn overtime compensation, an employee must work more than 40 hours a week and earn less than $23,660 a year. While President Obama is attempting to change exemption laws to help make more workers eligible to receive overtime pay, there are still concerns regarding a new form of labor taking advantage of part-time employees – “on-call employment.”
On-call employment is commonly practiced by employers in the retail industry as a means of ensuring they have backup employees available if needed. Employees are required to call in at least two hours before their scheduled shift, and be available between those hours. As a result, on-call workers are unable to accurately schedule childcare, appointments and other part-time shifts. The worst part — they will not be paid anything if they’re not called in to work that day.
In June, one former Victoria’s Secret employee had enough of the unfair system and filed a lawsuit alleging the company’s on-call employment practices were unethical. The woman’s suit stated that while on-call employees may be scheduled for more than 30 hours of work across five days straight, they may only be called in to work just 10 of those 30 hours. This would leave a minimum wage worker with a $90 paycheck instead of $270 – an enormous difference to someone trying to pay bills and maintain a standard quality of living.
Although the on-call employment case was ultimately dismissed, attorneys were given the option to appeal the judge’s decision to a higher court for the determination of what “report for work” means under the state’s labor laws. Fortunately, the suit was successful in raising enough awareness to make Victoria’s Secret reverse its on-call employment policies without being forced.
“Donning and doffing” is another grey area often litigated by weary workers. Many industries, such as in agriculture and food manufacturing, require employees to put on (donning) and take off (doffing) protective gear, clothing and uniforms before they clock in; however, certain conditions legally require employers to pay their employees for the time spent doing this.
The Portal-to-Portal Act, adopted by Congress in 1947 for the FLSA, established these requirements for employee compensation that includes “all time during which an employee is necessarily required to be on the employer’s premises, on duty, or at a prescribed workplace.”
As the U.S. workforce continues to grow and reinvent itself, further clarification is needed in many parts of the labor laws to help prevent fraud by greedy employers and corporations. Being “on the clock” can mean many different things to many different companies attempting to get the most out of their employees. By identifying issues with the current system, lawmakers can get to work perfecting a new system that can improve protections for hourly workers.
Each Thursday we will examine a topic of employment law. This is a complex area of law that covers federal and state statues, as well as administrative issues and judicial precedents. Next week, our topic will be Whistleblowing and Retaliation – FLSA anti-retaliation provisions. To be informed of the latest post in this series, follow us on Facebook, Twitter and Google+ by searching for #TheFraudList.