labor lawAdivision of labor law center

Most Tennessee employers must pay the new minimum wage of $7.25 per hour, effective July 24, 2009.

The federal minimum wage was established under the The Fair Labor Standards Act or FLSA in 1938. This law made sweeping changes to the workplace. At that time, children of all ages worked alongside adults in mills, farms and factories, sometimes as many as 60 hours a week. The FLSA established child labor laws prohibiting children under the age of 14 from working in almost every job.

Another effect of the FLSA was the establishment of the federal minimum wage. On July 24, 2009, the federal minimum increased 70 cents from $6.55 to $7.25 per hour. This increase affected most of the employers in Tennessee because the state has no minimum wage law.

Under the FLSA, to be eligible for federal minimum wage, an employee must work for a company that earns at least $500,000 per year. FLSA also covers businesses that engage in interstate commerce. Individual workers engaged in interstate commerce are covered by FLSA, too.

For example, a buyer contacting an out-of-state vendor via email or (more…)

Recently, ABC Professional Tree Services, a Houston-based company, was found to have violated both the federal Fair Labor Standards Act (FLSA) and Tennessee minimum wage laws. Because the company was found guilty in a Department of Labor investigation, it must pay 2,501 workers in several states back overtime pay totaling $1.8 million.

According to U.S. Secretary of Labor, Elaine L. Chao, “We 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.”

ABC Professional Tree Services specializes in cleaning up following a natural disaster, such as a hurricane. They trim and cut trees, plus offer other clean-up services near power lines for utility companies. Some of the back pay that is owed employees is from work done following Hurricane Katrina.

Working in cooperation with U.S. Attorneys from several states, the U.S. Department of Labor formed a task force. Created in 2006, the purpose of this task force is not only to investigate but also prosecute companies that violate labor laws in the region of the Gulf Coast. This task force specifically focuses on crimes that employers commit in the areas impacted by hurricanes, which includes Hurricane Katrina and Hurricane Rita.

In the case of ABC Professional Tree Services, the business must pay workers back pay in New York, Arkansas, Maine, North Carolina, Mississippi, Maryland, Georgia, South Carolina, New Jersey, Virginia, Tennessee, Florida, Louisiana, Ohio,  and Tennessee.

The way overtime must be handled according to FLSA is that employees must be paid at least $5.15 per hour, which is the minimum wage. Then, if employees work in excess of 40 hours during a week, they should be paid overtime at the rate of one-and-one-half their normal rate. The law makes it mandatory that employers keep time and payroll records that are accurate.

Employees at retail giant Wal-Mart, Inc., who worked long hours without overtime pay, have been vindicated by a settlement between the retailer and the U.S. Labor Department.

The suit involved violations of U.S. and Tennessee overtime laws. Almost 87,000 workers around the country and in Tennessee received $33 million in back pay, plus interest.

In the Wal-Mart case, almost 87,000 employees will receive the back pay. Wal-Mart is still vulnerable to litigation and workers may still make official complaints against the retailer with the U.S. Department of Labor.

According to the U.S. Department of Labor’s ruling, the employees in the Wal-Mart case were “non-exempted salaried” employees, and as such were entitled to the overtime pay. In the case, it was argued that the manager trainees had to work long hours but had virtually no decision-making authority and did not act as supervisors. In some cases they received less than the $23,600 exemption ceiling.

That is because the law also requires that to be exempted from the overtime law, a salaried manager must meet certain criteria. He or she must have major decision-making authority in a store, division or department, and have the capacity to hire and fire more than three employees.

In the Wal-Mart case, manager trainees had little power to make decisions and were not supervisors. Wal-Mart required them to work long hours, and some were even paid considerably below the $23,600 cutoff point.

The case harkens back to another in the early 1980’s when Howard Johnson’s tried to work around the law by hiring what were called “assistant managers,” but working them 80 or more hours a week doing dishing, waiting on customers, or busing tables. On that occasion also, the practice was stopped.

It’s not true that all salaried employees lack the protection of the overtime regulation. The guidelines require that the manager must have substantial decision-making authority and have the ability to hire and fire. Otherwise, he or she is still protected by the overtime law.

A two-year investigation recently revealed that a tree-trimming company had violated federal and Tennessee minimum wage laws. The investigation was triggered by a dissatisfied employee alerting the Dept. of Labor. This resulted in ABC Professional Tree Services being ordered to pay $1.8 million in overtime pay, to 2,501 employees.
The minimum wage by workers covered by the Fair Labor Standards Act is $5.15 per hour. This covers a basic 40 hour week. If an employee is required to work for more than 40 hours per week, they are then entitled to time-and-one-half for each hour over.

The investigation took place over two years, from August 2004 to August 2006. It was found that ABC Professional Tree Services had fallen foul to the federal Fair Labor Standards Act, as well as violating minimum wage laws throughout 16 states.

The company is currently paying a total of $1,801,507 to employees in Florida, Tennessee, Arkansas, Mississippi, Georgia, Louisiana, North Caroline, Tennessee, South Carolina, New Jersey, Cincinnati, Ohio, Virginia, Maryland and New Jersey, according to the US Dept of Law.

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

ABC Professional Tree Services provides utilities with tree cutting and trimming services, clearing branches from around power lines. It also specializes in clear up operations after natural disasters. They were involved with clearing up after Hurricane Katrina, and a portion of the $1.8 million will go to workers in this area.

US Attorneys in various states cooperated with the US Dept of Labor in 2006, to investigate and bring to prosecution companies who violated employment laws in the Gulf Coast region. The task force concentrated on areas affected by Hurricane Katrina, Hurricane Rita and other hurricane affected areas.

The Shelby County Commission will have a vote this coming week on a bill to instate a living wage regulation in their area. It will be up to the Budget and Finance Committee in the Shelby County Commission to determine what to do with the living wage ordinance. The version they will be looking at is actually the third version that has passed through the commission. The living wage would only go into effect for employees of the county government, as well as those independent contractors that do business with the county.

Under this third proposal of the living wage, the living wage rate would be set at $10 per hour for any of those above mentioned employers who provide health benefits to their employees. For those who do not provide health benefits to their employees, then the living wage rate would be $12 per hour.

As the third version of the proposal, this living wage bill might leave you asking—well, what happened to versions one and two? Well, the reason that version three was necessary was to limit the bills impact on smaller companies that might do business with the county.

For those of you in the Shelby County area, stay tuned on this one. Of course, the living wage bill will not affect you if you are not an employer of the county, or a contractor that directly works with the county on projects, but in any event, it is a start in your area. Remember, the living wage is different than the minimum wage because the living wage is directly tied to an annual amount of money that an employee would need to make to reach the standard of living that is slightly above or at the poverty level, hence the term “living” wage.