labor lawAdivision of labor law center

Most Louisiana employers were affected on July 24, 2009 when the federal minimum wage increased from $6.55 to $7.25 per hour.

There is no Louisiana minimum wage. Louisiana is one of 5 US states that have no minimum wage. The others are Alabama, Mississippi, South Carolina and Tennessee. In these states, an employer who is not covered by the federal minimum wage law can legally pay just $1.00 per hour – if they can find an employee willing to work for that amount.

The federal minimum wage law is the FLSA or Fair Labor Standards Act, passed in 1938. The FLSA applies to businesses with annual revenue of $500,000 or more. It also applies to individual employees who are engaged in interstate commerce as a portion of their work duties. Examples of interstate commerce would be a retail clerk who accepts credit cards as payment, a secretary who uses the internet or email, or a switchboard operator who answers out-of-state phone calls.

Every Louisiana employer should (more…)

The U.S. Department of Labor’s Wage and Hour Division is attempting to locate a number of workers who participated in post-Katrina renovations or repairs in Louisiana and Mississippi. The workers are entitled to back pay from sub-contractors on the projects.  The projects involve work done at the Naval Construction Battalion Center in Gulfport or the Naval Air Station/Joint Reserve Base in Belle Chasse, Louisiana. Anyone who believes that they are owed back wages for these projects can contact the nearest U.S. Department of Labor office.

The U.S. Department of Labor’s Wage and Hour Division recently recovered nearly $1.6 million in back wages for workers in Mississippi and Louisiana due to violations of the Davis-Bacon Act and other federal regulations.  The funds will go directly to some 2,600 employees who were involved in the renovation and repair of U.S. naval bases at Gulfport, Mississippi and Belle Chasse, Louisiana in the wake of hurricane Katrina. The awards average about $616 per worker.

Although Mississippi and Louisiana are two of the five U.S. states with no minimum wage, most workers in these states are protected by the federal minimum wage laws.

“This administration is committed to ensuring that workers are paid all the wages they have earned,” said Secretary of Labor Elaine L. Chao. “We have recovered nearly $1.5 million for the workers who’ve been involved in the cleanup and restoration of these naval facilities in the aftermath of Hurricane Katrina damage.”

The workers were employed by 107 different subcontractors all hired by KBR Inc., a company based in Virginia. In every case, the work was performed under a federal contract. Under the terms of most federal contracts, all wages paid must conform to a number of federal standards including the Service Contract Act (SCA), the Contract Work Hours and Safety Standards Act (CWHSSA) and the Davis-Bacon Act (DBA). 

Both the SCA and the Davis-Bacon Act require that subcontractors pay the local prevailing wage rate and benefits on federal service and construction contracts. In addition, the CWHSSA sets standards for overtime pay for workers involved in federal contracts. The U.S. Department of Labor’s Wage and Hour Division found the 107 sub-contractors in violation of all these laws.

After an investigation, the Wage and Hour Division found that 107 different subcontractors involved in the projects had failed to pay required wages and fringe benefits. In some cases, the contractors also neglected to pay overtime when employees worked more than 40 hours per week. The agency determined that 2,623 workers at the Naval Construction Battalion Center in Gulfport and the Naval Air Station/Joint Reserve Base in Belle Chasse were due approximately $1,475,000 in back wages.

KBR Inc.  and many of its subcontractors cooperated with the Labor Department’s investigation to ensure that all employees who were due back wages were compensated. Of the total back wages, the subcontractors paid approximately $670,000 directly to the affected employees. The prime contractor, KBR, paid the balance of $800,000 to the U.S. Department of Labor for disbursement to the remaining workers.

Under a special taskforce created in 2006, the U.S. Department of Labor’s Wage and Hour Division has investigated and prosecuted a number of violations of federal minimum wage laws in the Gulf Coast. These violations occurred as contractors moved into the area to perform work after Hurricane Katrina and Hurricane Rita. The wide-ranging investigations have recovered wages for workers from Florida to Maine.

In one prominent case, a Houston-based tree trimming service was found to have violated federal law by not paying more than $1.8 million in overtime to 2,500 workers. The firm, which specializes in disaster clean-up near power lines, was found to have violated the law in 16 states, including Florida, Texas, Ohio, Arkansas, Maryland, Virginia, Maine, New York, New Jersey, South Carolina, North Carolina, Georgia, Arkansas, Tennessee, Mississippi and Louisiana.

That probe began after a tip from an employee led to the discovery that the firm was violating the minimum wage law in the 16 states. It was also violating the FLSA, or federal Fair Labor Standards Act. The settlement covered the period from August 2004 to August 2006.

It seems that a lot of states have made their moves already this legislative session, whether or not they passed a new minimum wage or not. In fact, many legislatures have already closed up shop for the session, figuratively speaking. But not Louisiana. The bayou state’s legislature is actually still in session, and they have been recently debating a new minimum wage bill for Louisiana.

Just this Tuesday—still today depending on if you are on the West Coast—the new Louisiana minimum wage bill got voted on by the House Labor and Industrial Relations Committee. The count was six to four in favor of passing along the bill to the full House in the state for debate. The Louisiana minimum wage bill’s official name is House Bill 119.

It is not the first time that law makers in the state have tried to increase the Louisiana minimum wage, which at the moment matches the current federal minimum wage of $5.15 per hour (forever how long the federal minimum wage is still at that level). The new Louisiana minimum wage bill would increase that $5.15 per hour rate to a $7.15 per hour rate by the start of July, 2008. This particular measure was introduced in the House by a Democratic Representative from Monroe, a fellow by the name of Rep. Willie Hunter.

Word is, according to my local source down there, that the new Louisiana minimum wage supporters could expect some opposition in the full House. For instance, one Representative, Rep. Steve Scalise, a Republican from Jefferson, has already said that he feels that the issue is a federal one and should be decided on the federal level. So what does that mean for us employers in the state? Well, as is my usual mantra, I’m recommending a “wait and see” approach on this one. But be prepared to get a new Louisiana minimum wage poster when you are set to order your updated federal minimum wage poster.

Some would wonder if these rule changes in Louisiana would mean much outside of these new minimum wage labor law posters that would be required. Well, the big difference for employers in the state of Louisiana could come soon if the federal minimum wage passed—which it could do before the end of this week, if all indications are correct—and the Louisiana minimum wage does not increase to match the upcoming federal minimum wage increase.

In 60 days after the federal minimum wage law would become law, the new federal minimum wage would become $5.85 per hour. A year later, it would become $6.50 per hour, and a year after that, it would increase again to $7.25 per hour. If the Louisiana minimum wage law were to pass, then the Louisiana minimum wage would follow a near similar trajectory as the federal minimum wage. But say the Louisiana minimum wage law does not change in the next year, or the next couple years.

That would make a big difference for some Louisiana employers, and not so much a difference for others. That’s because those employers in Louisiana liable to follow the Fair Labor Standards Act and pay the federal minimum wage would be required to keep increasing the wages for their lowest paid workers, ultimately up to $7.25. Meanwhile, local smaller employers in the state, exempt from federal wage and hour labor laws and only required to pay the state of Louisiana’s minimum wage law, would end up in 2009 paying more than $2 less in minimum wages than their larger or interstate counterparts. As I said, it could lead to big differences down the road if the Louisiana minimum wage bill does not get passed.

ABC Professional Tree Services is one of the most recent companies to be found guilty of falling afoul of the federal and Louisiana minimum wage laws. After a Dept. of Labor investigation, the firm has been ordered to pay 2,501 employees a total of $1.8 million in overtime pay.

An unhappy employee alerted officials at the Dept. of Labor, that ABC Professional Trees Services was violating the minimum wage law. On investigation, the Dept. Of Labor found that ABC Professional Tree Services had violated the law in 16 states. After a two-year investigation that found that in addition, the company had violated the federal Fair Labor Standards Act or FLSA.

The US Dept. of Labor reported that ABC Professional Tree Services was ordered to pay back wages to employees in Louisiana, Tennessee, Louisiana, Mississippi, Arkansas, Florida, North Caroline, Georgia, South Carolina, New Jersey, Maine, Ohio, New York, Virginia, and Maryland.
Some of the back wages will be paid to employees who worked in the aftermath of Hurricane Katrina.
ABC Professional Tree Services is based in Houston and provides tree cutting and trimming services around power lines, as well as specializing in clearing up after natural disasters, including hurricanes.

US Secretary of Labor Elaine. L Chao said, “we are pleased that we were able to help these workers get the back pay they deserve.” She went on to say, “the department will continue our efforts to ensure that employers are paying workers properly.”

The US Dept. of Labor, created a task force, with cooperation from a number of states throughout the U.S., in 2006. They investigated violations of labor laws in the Gulf Coast. Some of these investigations led to prosecutions. The investigation was concentrated around areas affected by hurricanes.
The FLSA states that employees covered by the Act should be paid $5.15 per hour minimum. This applies to the first 40 hours an employee works per week. After this, the employee is entitled to time-and-one-half for every hour worked.

Being as such—that Louisiana has no state minimum wage law—then employers are faced with a similar prospect as they faced back when we last talked about this topic. There is no need for a Louisiana minimum wage labor law poster, because of no laws on overtime, salaried employees, or the minimum wage. But Louisiana employers still do have to consider the issue of the federal minimum wage.

Or at least some Louisiana employers have to consider the federal minimum wage. As I have said before to you guys out there, the federal minimum wage does not apply to all employers. It only applies to those employers who are liable to follow the Fair Labor Standards Act, meaning certain large and interstate employers out there. These include, but are not limited to, employers who either make more than $500,000 a year in revenues, or that operate in and out of more than one state besides Louisiana.

The Fair Labor Standards Act also has power over certain groups of employers and businesses, such as schools and medical facility type employers, so many employers in Louisiana would end up paying the new federal minimum wage should the Congress pass such a law in the near term future.

It would be interesting to take a poll of employers in the state Louisiana who have Internet sites, because if these employers use those sites to make a sale in another state, no matter how small those employers might be, they would then technically be interstate employers and technically would be required to pay the federal minimum wage and follow other sections of the Fair Labor Standards Act.

All employers in Louisiana, whether they have a Web site or are large multistate entities, have to have a federal minimum wage labor law poster, however. So that would change too if the new federal minimum wage passes—I mean, the federal minimum wage poster would have to be changed.