labor lawAdivision of labor law center

When the federal minimum wage increased from $6.55 per hour to $7.25 on July 24, 2009, most employers in South Carolina were affected.

South Carolina doesn’t have a state minimum wage. In fact, if a South Carolina employee is not eligible for the federal minimum wage, he or she can legally be paid a mere $1.00 per hour or less. Due to use of the Internet and credit cards, though, most employees in South Carolina are entitled to the federal minimum wage.

The Fair Labor Standards Act of 1938 is the relevant law for the federal minimum wage. This law applies to employers with annual revenue of $500,000 or more and to employers engaged in interstate commerce.

Interstate commerce is defined as any business that takes place across state lines. The Internet, email, answering out -of-state phone calls, shipping packages to other states all qualify as interstate commerce, so most employers in South Carolina and throughout the US (more…)

Employers need to be aware of the South Carolina overtime laws. A tree-trimming company in Houston found out the hard way that these laws must be followed. This company has to pay 2,501 employees at total of $1.8 million dollars in back pay for overtime worked. The professional tree-trimming company agreed to pay the money after an investigation was conducted by the U.S. Department of Labor.

U.S. Secretary of Labor, Elaine L. Chao, stated, “We are pleased that we were able to help these workers get the back pay they deserve.” She added, “The department will continue our efforts to ensure that employers are paying workers properly.”

The company involved in the investigation is ABC Professional Tree Services. The investigation began following a tip made by an unhappy employee. The investigation looked into a two-year period of time starting in August, 2004 and ending in August, 2006. The Labor Department discovered the tree-trimming service had violated the law regarding minimum wage in several states. Moreover, the company had violated the federal Fair Labor Standards Act, also known as FLSA.

Some of the employees who will receive back pay were workers helping with the clean-up effort following Hurricane Katrina. ABC Professional Tree Services offers clean-up services along with tree trimming and cutting services. Cleaning up following a natural disaster, such as a hurricane, is the specialty of this company.

The back pay will be given to employees in the states of Maryland, North Carolina, Ohio, Tennessee, Mississippi, New York, South Carolina, South Carolina, New Jersey, Maine, Louisiana, Virginia, Arkansas, Georgia, and Florida.

Working with U.S. Attorneys from several states, the U.S. Department of Labor has formed a task force. The purpose of this task force is to investigate possible violations of labor laws, specifically in the Gulf Coast area. The specific focus of this task force is the area impacted by hurricanes.

A Houston, Texas tree-trimming firm involved in the Hurricane Katrina cleanup failed to pay the minimum wage to its workers, and has been ordered to pay back-wages to more than 2,500 employee, in South Carolina

The violation of the federal and South Carolina overtime and minimum wage laws will cost the company more than $1.8 million. That’s the amount of back wages it has been ordered to pay, following the investigation by the Department of Labor.

The 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 South Carolina employees, but workers from Maryland, Virginia, Cincinnati, Maine, New York, New Jersey, Ohio, South Carolina, North Carolina, Georgia, Arkansas, Florida, Tennessee, Mississippi, and Louisiana.

Labor Department officials got a tip from a worker about the failure to pay the minimum wage, and subsequently learned that ABC has been breaking the minimum wage law in 16 states. It was also violating the federal Fair Labor Standards Act (FLSA). The FSLA says employees must be paid $5.15 an hour for the first 40 hours in a workweek, plus time-and-a-half for anything over 40 hours. The employer must also keep time and payroll records that are accurate.

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. The hurricane cleanups included the aftermaths of Katrina and Hurricane Rita.

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.  

Wal-Mart Inc recently agreed to pay $33 million to 87,000 employees throughout the country. The reason is that signed an agreement with the US Dept. of Labor related to unpaid back wages.

The infractions committed by Wal-Mart represent a violation of federal and South Carolina overtime laws. In the future, the giant of retail could be involved in more lawsuits because the agreement signed refers only to specific violations. It does not affect other litigations and complaints presented by workers.

What were the infringements at Wal-Mart? The most important violation was related to incorrect payments to some types of workers. They were considered as “salaried exempt” managers, when they actually had the right to receive overtime pay. Some of the examples were programmer trainees, manager trainees and paid interns. They were considered salaried and they worked for long hours without being paid overtime. 

To avoid paying overtime, one unethical tactic in the past was to hire employees and put them in management positions. That tactic was applied by Howard Johnson’s  in the 80’s. Waiters or dishwashers were hired as “assistant managers” and worked long hours for little money, until the workers won a class action suit. In general, members of management receive good salaries and other compensation. It is often expected that they will work 10 or 12 hours per day, or perhaps more, with no overtime pay. They are the typical case of “salaried exempt” employees.

They are some guidelines to differentiate a “non-exempt” employee from one who is  “exempt”. If the employee receives $23,660 per year or less (that means $455 per week), and works more than 40 hours he or she must be paid overtime. If the employee is paid more than $23,660 per year, exempt status depends on his or her job description. A salaried manager, in general, has the authority to employ or fire 3 or more members of the staff, and has important power to make decisions over a store, a division or department.

One of the arguments in Wal-Mart case was that the manager trainees that worked long hours, has little decision-making power, and in most circumstances, they received less than $455 per week. 

My point, you ask? I actually had a point? Yes, as always, my loyal readers, there is a reason that you are reading my blog, instead of, say, sleeping or eating a donut. I am here to pass along some valuable information to the employers of South Carolina. You will soon probably be facing a change in the way that you have to pay your employees.

That is because the federal minimum wage is your de factor minimum wage, meaning for most of you in South Carolina, the federal minimum wage is the one that you must know and love. We went into it a whole bunch a few log posts ago on what makes an employer liable to follow the Fair Labor Standards Act, so I won’t get into that all again.

But what I will say is that the federal minimum wage change could be a reality soon, and that would mean that every South Carolina employer that must follow the Fair Labor Standards Act would have to follow the new changes to the federal minimum wage.

All employers in the state would be required to get a new updated federal minimum wage poster. That would be a definite result of any law change in Washington DC. But a good many of you would also need to pay what that federal minimum wage poster says, including the three increases over the course of the next two years. The first of which is set to occur 60 days if and when the president signs the federal minimum wage bill into law. That first change is up to $5.85 per hour. A year after that in 2008, the next federal minimum wage increase would be to $6.50 per hour. A year after that, the next federal minimum wage increase—to $7.25 per hour.