When it comes to federal and Maine overtime laws, companies need to exercise care. Recently, a tree-trimming company in Houston was found guilty of violations. The US Department of Labor conducted an investigation, and now the firm must pay overtime compensation of $1.8 million to 2,501 workers.
The Department of Labor conducted their investigation in the time period from August, 2004 through August, 2006. ABC Professional Tree Services was found to have violated minimum wage laws. In addition to these laws, the tree service was found to be in violation of the Fair Labor Standards Act, also known as FLSA. A disgruntled employee gave the Department of Labor a tip that started the investigation.
ABC Professional Tree Services trims and cuts trees, plus offers clean-up services around power lines. Utility companies use their services. This company, which specializes in cleaning up areas following a natural disaster such as a hurricane, has agreed to pay employees back wages totaling $1,801,507.
According to U.S. Secretary of Labor, Elaine L. Chao, “We are pleased that we were able to help these workers get the back pay they deserve.” As she explains, “The department will continue our efforts to ensure that employers are paying workers properly.”
The back wages that ABC Professional Tree Services must pay are partly the result of time worked after Hurricane Katrina. Back wages will be paid by the tree service to employees in Maryland, Virginia, Maine, Florida, Louisiana, Maine, Ohio, New Jersey, New York, Tennessee, Mississippi, South Carolina, Arkansas, North Carolina, and Georgia.
For the first 40 hours employees work during the week, they have to be paid minimum wage, which is $5.15 per hour. This is a requirement of the Fair Labor Standards Act. If employees work over 40 hours during the week, they must be paid 1.5 times their hourly salary for each additional hour worked. To ensure that employees receive the pay they deserve, all employers must keep payroll and time records that are accurate.
You might not think that an investigation of minimum wage violations in the wake of hurricanes Katrina and Rita would affect Maine workers, but it does. A number of Maine workers stand to be paid overtime for hours worked. The company involved was caught in a dragnet conducted in the Gulf Coast.
A Texas company, ABC Professional Tree Services, does cleanup and tree-cutting services around power lines and after natural disasters, including hurricanes. Some of the $1,801,507 in back wages will go to workers who were assigned to cleanup work following Hurricane Katrina. The company is not only paying back wages to its Maine employees, but workers from Maryland, Virginia, Cincinnati, Maine, New York, New Jersey, Ohio, Maine, North Carolina, Georgia, Arkansas, Florida, Tennessee, Mississippi, and Louisiana.
A tree-trimming firm from Houston, paid more than 2,500 workers below the minimum wage and now must pay them $1.8 million in back wages.
The U.S. Labor Department has found the firm in violation of federal and Maine minimum wage laws. The action follows a two-year investigation that ended in 2006.
The investigation grows out of a tip from a disgruntled former employee. The charges were investigated by a special US Dept. of Labor taskforce are aimed at crimes of employers in hurricane regions – such as those including Hurricane Rita and Hurricane Katrina.
In 2006, the Labor Department and U.S. Attorneys from several states developed a task force that was designed to probe and prosecute violators of labor laws in the Gulf Coast area. Its specific mandate was to focus on crimes of employers in hurricane regions.
U.S. Labor Secretary Elaine L. Chao said she was pleased that her department was able to “help these workers get the back pay they deserve. The department will continue our efforts to ensure that employers are paying workers properly.” The investigation covered the period from August of 2004 to August of 2006.
A recent case in Maine shows just how difficult it can be to determine if a salaried employee is entitled to overtime. Violations of federal and Maine minimum wage laws were at the heart of a settlement recently reached between Wal-Mart and the US Department of Labor. Wal-Mart, a retail giant, will pay almost 87,000 employees in Maine and across the nation back pay and interest totaling $33 million.
Wal-Mart has to pay these employees because they did not receive proper overtime compensation. These employees, who often worked long hours, were salaried and held jobs such as manager trainee, programmer trainee, and intern. Although many people believe that no salaried employees receive overtime, that isn’t true. In this case, the employees were what the US Department of Labor ruled as “non-exempt salaried.” When employees are considered “non-exempt salaried,” they should receive overtime pay for hours worked beyond the standard 40 per week.
Federal and Maine minimum wage laws specify that not all employees who are salaried are exempt from overtime compensation. New guidelines established within the last few years specify that if an employee is paid less than $455 each week, they should be paid overtime if they work in excess of 40 hour a week. Salaried managers who earn more than this may still be entitled to overtime.
This settlement concerned manager trainees. Many of these employees had little say in decision making but still had to work long hours. These employees were paid less than $23,600 a year, so they still were eligible for overtime.
Employees often think that salaried workers cannot receive overtime, but that is not true. The way the guidelines work is that if an employee is paid $23,660 a year or less, they should be paid overtime for work they do beyond 40 hours a week. Under these guidelines, employees earning less than $455 a week can receive overtime.
That doesn’t mean that workers who earn more are automatically exempt from overtime payments. Managers who are salaried employees do not receive overtime if they have specific
Tipped employees or regular employees, when that new federal minimum wage passes (or if it does), they probably will not see an impact, and their employers probably will not see the impact either. That is because Maine’s minimum wage will be higher than the federal minimum wage, even after the new law passes, through 2009, when the federal minimum wage would go up to $7.25 per hour and then be higher than the Maine minimum wage.
But up until that point, the Maine employers paying the minimum wage to their employees will have to pay the Maine minimum wage. As is the case with labor law, employers in any given state must pay the higher of the two minimum wages when the state and the federal minimum wage are not the same. In the case of Maine at present, the federal minimum wage is $5.15 per hour and the Maine minimum wage is $6.75 per hour, so you can do the math and see that the Maine minimum wage is the one to be paid.
This holds true even for employers who are liable to follow the Fair Labor Standards Act. These employers also have to pay the higher Maine minimum wage, despite having to follow the other federal labor regulations contained in the Fair Labor Standards Act.
When and if the federal minimum wage goes up to $5.85 per hour in its three part increase, the Maine employers out there paying the minimum wage will still be required to pay the higher Maine minimum wage. And when the federal minimum wage goes up to $6.50 per hour sometime in 2008, as prescribed by both federal minimum wage bills in Congress at the moment, the Maine minimum wage would still be higher, and thus be the one that employers have to pay.
For Maine employers then, the new minimum wage is old news, as is the fact that they had to get a new Maine minimum wage poster. Of course, if you haven’t gotten your updated Maine minimum wage labor law poster, I would strongly recommend doing so now, before they catch you. Technically, when the new Maine minimum wage went into effect this past October, you should have had the poster on the wall.
This Maine minimum wage poster will still be good for this coming October, too, when the Maine minimum wage goes up again to $7 per hour. That is because the new Maine minimum wage poster—which I am looking at at this very moment—contains details about the two part minimum wage increase, with the two increases occurring in October of 2006 and 2007.
The Maine minimum wage poster also contains info on so called service employees, or tipped employees. The state considers any employee that makes more than $20 per month in tips a service, or tipped, employee. And as such, employers in the state of Maine, according to the Maine minimum wage law, can pay these workers half of the regular minimum wage, as long as the other half is made up for by the tips that they receive.
If the worker’s tips do not make up the difference in any given week, then you the employer must make up the difference. This system is quite similar to how tip credits work in the other states that we have looked at, though some states do have a system now were they set a definite wage rate for tipped employees (whereas Maine here has set a proportionate rate of 50 percent for the tip credit). The significance? When Maine’s minimum wage goes up in October again, the service employee minimum wage will go up too.