Federal Contractors to See Potential Wage Increase

Minimum wage has been a hot topic over the last year, and continues to be so into 2014. The Fair Minimum Wage Act now sits in front of both the House of Representatives and the Senate. The Act aims to raise the federal minimum wage from $7.25 per hour to $10.10 per hour in three stages over the next several years. The Act would further raise the minimum wage for tipped employees and ensure that, in future years, the minimum wage would adjust annually for inflation, as it does in many states.

While the majority of American minimum wage employees will have to wait for the bill to pass, another group of employees in the United States may see pay increases sooner. In his State of the Union address, President Obama announced his plan to sign an executive order, which will raise the minimum wage for federal contract employees to $10.10 per hour. Because federal contracts can be so complex, the new wage requirement will not affect anyone who is currently under contract, but will affect all of those who sign new future contracts or renewed contracts.

The President stated the order could be expected in a few weeks, and the White House claimed it believes that “[b]oosting wages will lower turnover and increase morale, and will lead to higher productivity overall.” Many lower wage-earning federal contract employees work on military bases as dishwashers, janitors, food servers, and launderers. Obama specifically voiced his belief that the people who help take care of United States troops should not have to live below the poverty level.

Opposition for the Wage Hike

Of course, people quickly spoke up against the President’s plan, citing concerns or simply downplaying the bill. First, some industry groups took the order as a slight against federal contractors, stating the President singled out contractors for the increase, which may insinuate that contractors do not already pay a fair wage.

Industry groups cited the Service Contract Act, which already requires employees under certain types of contracts to be paid much higher than $10.10 per hour.

Other politicians pointed out that the scope of the executive order would be much smaller than it sounds, stating that only approximately 10 percent of the 2.2 million federal contract employees currently make less than $10.10 per hour. Those are the only employees who would be covered under the order.

However, the Obama administration pointed out that the increase will still apply to 200,000 to 300,000 Americans, and will increase their standard of living. That is better than nothing, some politicians maintain. Others see this order as a push to pass the Fair Minimum Wage Act through Congress. Obama also commented, in his State of the Union address, that he would continue to encourage that bill, and for Congress to stand up for all workers in the United States by increasing the federal minimum wage.

Though the federal minimum wage is currently still $7.25 per hour, the minimum wage in California is $8.00 per hour for 2013. If you have any questions regarding minimum wage or other wage and hour issues, call the Pershing Square Law Firm today for help.

Hot Employment Issues Going into 2014

Many employment cases involve groups of employees coming together to hold their employer accountable for widespread wrongdoing.  Lawsuits that involve large groups of plaintiffs like this are called class actions.  Class action employment cases used to often involve numerous employees who claimed they suffered the same type of discrimination.  However, the Supreme Court recently made it more difficult to qualify as a class in its decision in Wal-Mart v. Dukes.  In that case, 1.6 million female employees of the retail giant claimed they had suffered sex discrimination in the company’s promotion and pay raise practices.  The Supreme Court decided that the women did not have common enough experiences to constitute a class.  As a result of this decision, filing class action discrimination cases will now require prohibitive amount of discovery and other work for the plaintiffs.

Since the decision in 2011, employment law experts expect a drastic decline in the number of class action discrimination lawsuits.  However, this does not mean that employment cases will decline overall, as other hot employment issues are popping up in cases on a more regular basis as we go in to 2014.

Wage and Hour Cases

Wage and hour lawsuits have been on the rise, with the number of cases increasing 10 percent from 2012 to 2013.  Experts expect that number to keep rising, especially in light of the Wal-Mart v. Dukes decision.  Some common bases for wage and hour cases include:

·         Misclassification of employees vs. independent contractors

·         Non-payment of interns

·         Failing to pay full overtime wages

·         Failing to pay for time spent preparing for shifts or cleaning up after shifts

·         Not paying workers on time

·         Not paying workers their final paychecks if a company goes out of business

California is one of the states with the most worker-friendly wage and hour laws, along with New York, New Jersey, Pennsylvania, Massachusetts, and Florida.  Therefore, California is especially expected to see an increase in this type of case in 2014.

Social Media Cases

The use of social media in the workplace has also become a hot-button employment issue.  New laws prohibiting employers from demanding access to employees’ personal social media profiles will be the focus of new cases targeting non-compliant companies.  Furthermore, many cases will likely involve wrongful termination in violation of the employee’s First Amendment rights to free speech, after an employer fires someone for posting certain material on social media sites.

Whistleblowing

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provides several protections, incentives, and financial rewards for whistleblowers who report violations regarding insider trading, corporate disclosure, accounting fraud, dealer-broker violations, and more.  Expect to see several whistleblowing claims arising in the New Year.  These cases will mostly involve claims of unlawful retaliation against protected whistleblowers.

In short, employment cases will not decrease simply because of the difficulties facing potential class action discrimination suits.  Employees still have plenty of reasons to file claims against their employers to receive the compensations they deserve.  If you are facing any employment issue, do not hesitate to contact the Pershing Square Law Firm to discuss a potential case.

Supreme Court Precedent Creates Difficulty for Undocumented Workers

In July of this year, the Second Circuit Court of Appeals upheld a decision by the National Labor Relations Board (NLRB) to deny an award of back pay to undocumented alien workers in Palma v. NLRB.  The workers’ claim stated that their employer had wrongfully discharged them for participating in activities protected by the National Labor Relations Act (NLRA).  On initial review, an administrative law judge recommended an award of both unconditional reinstatements with reimbursement of back pay for the workers.  The NLRB opted not to follow the recommendation, however, and denied an award of back pay based on a 2002 decision by the United States Supreme Court, Hoffman Plastic Compounds, Inc. v. NLRB.  On appeal, the Second Circuit agreed with the NLRB’s interpretation of Hoffman Plastic and upheld the denial of back pay for the undocumented workers despite their wrongful discharge.

The Hoffman Plastics Decision

The NLRB’s reliance on Hoffman Plastics may constitute a significant barrier for undocumented workers in future wage claims.  In Hoffman Plastics, an illegal immigrant, Jose Castro, used false documents to obtain employment with Hoffman, a small manufacturer in California.  Seven months later, Castro participated in a union organizing campaign by handing out fliers and union authorization cards, activities that are legally protected by the NLRA.  After Hoffman terminated Castro and the others for their protected activities, they brought a claim before the NLRB, which awarded them reinstatement with back pay.  Hoffman Plastics appealed to the Supreme Court, arguing that Castro was not entitled to back pay because his employment was illegal under the Immigration Reform and Control Act of 1986 (IRCA).  The Supreme Court agreed with Hoffman’s argument, holding that the IRCA prevents punitive provisions against an employer under the NLRA that would benefit an employee who knowingly violated immigration laws.  Because Castro had fraudulently obtained employment in violation of the IRCA, he was entitled to no back pay award.

The plaintiffs in Palma argued that, unlike Hoffman, there was no evidence that they used false documents.  However, the Second Circuit held that mere unlawful presence in the United States was enough to be criminally punishable under the ICRA, and therefore bar any back pay awards.  However, the court left open the possibility of reinstatement of employment if the plaintiffs showed proper documentation.

Potential Barriers for Immigrant Workers

The United States Department of Labor stated that the Hoffman decision did “not mean that undocumented workers do not have rights under the U.S. labor laws."  However, the dissent in Hoffman expressed concern that the decision gives employers an avenue to relieve themselves of responsibility for illegal employment actions against undocumented workers, and many employment and immigration experts agree.  Hoffman and the recent Palma decisions significantly limit the availability of relief to immigrant workers in claims for unlawful termination, discrimination, and wage and hour violations.  This may potentially open the door for potential abuses of undocumented workers with few consequences for the employers and many worry that employers will feel free to violate the NLRA without fear of punishment. 

If you believe your employer has violated labor laws, you should contact the attorneys at Pershing Square Law Firm as soon as possible.