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Labor: Conditions

In this section we report news related to the wages - including the federal minimum wage.

The issue affects all Americans, as those who work full time but do not earn enough to escape poverty require additional help paid for by taxpayers.

Related Issues

Right-to-Work
Minimum Wage

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Gender pay equality bill passes House

2019-Mar-27  (Updated: 2019-Apr-02)By: Barry Shatzman

The House of Representatives has passed a bill that would help close the pay gap between men and women.

Women who work full time make almost 20 percent less than men in comparable jobs.

Current protections aren't working

There already is a law to prevent pay discrepancies between men and women - the 1963 Equal Pay Act. However, it has been ineffective.

The primary reason is that it allows for salary differences for any other factor other than sex - a criteria that can be loosely interpreted and difficult to prove. Companies also tend to base salary offers on a new hire's prior salary - which traditionally has been lower for women.

The situation is further complicated because many companies have rules that prohibit employees from discussing their salaries with one another.

How this new bill would address those problems

Under this bill - the Paycheck Fairness Act - wage differences would be limited to specific reasons such as education, training, or experience. In cases where wages differ between genders, companies would be required to demonstrate that those factors account for the entire difference.

Companies no longer would be allowed to base salary on a new hire's prior salary, and could not restrict employee conversations about their salaries.

The bill also provides for harsher treatments by courts, and would require companies to report wage data to the Equal Employment Opportunity Commission (EEOC).

In order to become law, the bill still must be passed by the Senate and then signed by the president.

It still might become illegal to use prior salary

A 2018 9th Circuit Court decision made it illegal for employers to base salary on a new hire's previous salary. However, the Supreme Court vacated that decision due to the death of one of the justices before the opinion was delivered. All of the justices concurred with the decision to one extent or another, so it's likely the rule would take effect after the case is reconsidered.

Equal pay ruling overturned after judge dies

2019-Feb-25By: Barry Shatzman

The Supreme Court has invalidated a 9th Circuit Court decision prohibiting a company's use of salary history in how much to offer new hires, because the judge who wrote the majority opinion died before that opinion was delivered.

Though all 11 circuit court judges involved in the decision had agreed that companies should not be allowed to use prior salary, they differed in their reasoning. The 6-5 majority included Judge Stephen Reinhardt, who died after writing the majority opinion.

"As for judicial practice, we are not aware of any rule or decision of the Ninth Circuit that renders judges' votes and opinions immutable at some point in time prior to their public release. And it is generally understood that a judge may change his or her position up to the very moment when a decision is released," the unsigned Supreme Court opinion stated. There was no dissent.

The 9th Circuit Court now must decide whether to issue a new judgement with the 10 previous judges, or replace Reinhardt's position and issue a new ruling (either with or without rehearing the case).

Reinhardt's replacement will be nominated by President Donald Trump and must be approved by the Senate.

Bill would require companies to pay for employees' govt aid

2018-Sep-05  (Updated: 2018-Sep-10)By: Barry Shatzman

A proposed law would require large companies to reimburse the government for government aid their employees receive.

If an employee is paid less than the Federal Poverty Level, that person often requires programs such as food stamps and Section 8 housing.

Those programs effectively make up the difference between what an employer pays and what a worker needs to survive. Except that difference - rather than being paid by the employer - now is paid with public money.

That difference is the impetus for minimum wage laws - to relieve taxpayers of essentially subsidizing companies that pay less than a livable wage.

This bill would accomplish essentially the same - by not requiring a specific minimum wage but shifting the burden of providing a livable income from taxpayers to the employer. It is aimed at large companies with more than 500 employees - especially those with the most employees receiving public assistance.

Court: Government workers can't be forced to support union

2018-Jun-27  (Updated: 2018-Jun-30)By: Barry Shatzman

The Supreme Court has ruled that government employees cannot be compelled to pay labor unions that negotiate on their behalf.

In addition to representing employees, unions participate in politics - typically supporting policies that benefit workers. If an employee does not want to support that activity, they have the right to not join the union. Even still, they've been required to pay an agency fee that covers the union's cost of collectively bargaining and representing the employee in disputes.

The court ruling changes that - allowing employees to pay nothing.

In his majority opinion, Justice Samuel Alito wrote that even wage negotiations are political because they affect a government's budget. Therefore, he argued, requiring someone to pay agency fees violates the U.S. Constitution's First Amendment.

In dissent, Justice Elena Kagan wrote that previous court decisions have differentiated terms of employment from free speech.

"The First Amendment was meant for better things. It was meant not to undermine but to protect democratic governance - including over the role of public-sector unions," Kagan added.

Court says legal system not guaranteed for workers

2018-May-21  (Updated: 2018-May-25)By: Barry Shatzman

The Supreme Court has ruled that employees are not guaranteed the right to file class action lawsuits even if their employer violates wage and hour laws.

With the decision, if the employee signed an employment contract containing an arbitration clause, then the company can require disputes be settled using arbitration. If the contract states that disputes must be resolved individually, then class actions cannot be used.

This was a conflict between two old laws.

The case involves employees who claimed they were illegally underpaid. They filed class action lawsuits against the companies - which claimed the employees must arbitrate each case individually.

At the core of it is a conflict between two laws that were enacted before most people reading this were born.

The 1925 Federal Arbitration Act (FAA) requires that arbitration clauses in contracts be enforced.

The 1935 National Labor Relations Act (NLRA) guarantees employees the right to engage in collective bargaining and other "concerted activities".

In his majority opinion, Justice Neil Gorsuch stated that those concerted activities do not include class actions, and that the arbitration law requires courts to enforce arbitration agreements.

In dissenting, Justice Ruth Bader Ginsburg stated that she considered arbitration in employment contracts illegal because, rather than being voluntary negotiated agreements, the company sets the terms and workers must sign them in order to take the job.

This affects non-union workers

Workers affected are those who aren't in a labor union and who signed employment contracts with arbitration clauses that prohibit class actions.

Workers (mostly low-income) lose 3 times a much in wage theft as people do from all robberies, according to the Economic Policy Institute.

Ginsburg said in her dissent that the government's ability to enforce these violations is limited, and that "government agencies must rely on private parties to take a lead role in enforcing wage and hours laws."

She wrote, "If employers can stave off collective employment litigation aimed at obtaining redress for wage and hours infractions, the enforcement gap is almost certain to widen. Expenses entailed in mounting individual claims will often far outweigh potential recoveries."

Gorsuch, in his majority opinion, concurred that arbitration as a policy to address these problems is a legitimate discussion, but the court only can address the law.

"The respective merits of class actions and private arbitration as means of enforcing the law are questions constitutionally entrusted not to the courts to decide but to the policy-makers in the political branches," he wrote.


Court: Equal pay for women can't depend on past pay

2018-Apr-11By: Barry Shatzman

Employers can't pay women less than men based on salary history, a federal appeals court has ruled.

Since 1963, the Equal Pay Act has required that men and women receive equal pay for equal work. But the law allows for differences "based on any other factor other than sex," making enforcement tricky.

The case concerned a female math consultant who was hired by a school district at a lower pay level than a male counterpart. The school district's policy was to base pay levels on previous salary. It claimed it was allowed to do that because of the catchall clause in the law.

The court's opinion

In his majority opinion, Justice Stephen Reinhardt wrote that the law was created to address the historical pay disparity between men and women. Therefore, allowing previous salary to be used, would...

...allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum - (which) would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.

Reinhardt also argued that the catchall clause came at the end of other conditions - all of which were related to qualifications. "It follows that the more general exception should be limited to legitimate, job-related reasons as well," he wrote.

Other justices, while concurring, argued that the catchall clause could include salary history, "but only if an employee's past pay is not itself a reflection of sex discrimination."

Four states (California, Delaware, Massachusetts, and Oregon) prohibit a prospective employer from asking applicants about their previous salary.

Labor rule would change who owns tips

2017-Dec-05  (Updated: 2018-Jan-05)By: Barry Shatzman

If you work in a restaurant, who owns the tips you receive?

In general, you do. The restaurant may require you to pool your tips with other workers who normally are tipped. But a 2011 Obama administration regulation prohibited restaurants from requiring you to share them with other employees who aren't normally tipped. Or with the restaurant owners.

The Trump administration has proposed a change to this protection - one that would allow the restaurant to allocate your tips any way it chooses.

The restaurant may decide to pool tips among all of its workers - including cooks and dishwashers who do not interact with customers and currently are not entitled to a portion of the tips. Or the restaurant legally could choose to keep the tips itself.

There is a catch. Restaurants are required to pay employees such as servers and bussers only half of the Federal Minimum Wage, as long as the other half is made up for by tips. It's a rule referred to as the tip credit. The new rule still would prohibit restaurants from taking tips away from employees it uses the tip credit for.

A restaurant could, however, decide to pay those employees the full minimum wage, and then be allowed to control all of their tips. While this would hurt servers who make more than the minimum wage due to their tips. It also would affect customers, as less of their tips would go to the person who provided their service.

Update: The public comment period has been extended to Feb. 5, 2018

Bill would allow workers to take time off rather than overtime

2017-May-02  (Updated: 2017-May-08)By: Barry Shatzman

The House of Representatives has passed a bill that would allow employees of private sector companies choose extra time off rather than overtime pay.

The Fair Labor Standards Act (FLSA) specifies that overtime pay be paid to employees who work more than 40 hours in a week.

The House of Representatives has passed a bill that would allow workers to choose an equivalent amount of paid time off instead of the immediate pay. The employee can request the payment at any time (the company would have 30 days to reimburse the worker). Any compensatory time not used in a particular year would revert to being paid.

That means the bill effectively allows a company to hold onto an employees earned compensation for up to a year longer (with the employee's consent).

However, there is little practical benefit to workers. Someone working overtime (and getting paid for it immediately) already can request unpaid leave for any needed time off. This bill offers no scheduling advantage to employees who would choose to receive compensatory time as opposed to pay.

The primary effect of the bill would be to allow a company to earn interest on the money that legally belongs to the worker.

A larger downside for the worker, however, is risk. If the company declares bankruptcy and does not have enough money to pay all of its workers, workers with accrued overtime could lose the pay they otherwise would already have had.

The bill still must pass the Senate and be signed by the president in order to become law.

Trump signs bill to revoke Fair Pay & Safe Workplaces order

2017-Mar-27  (Updated: 2017-Apr-19)By: Barry Shatzman

A 2016 Executive Order by then-President Barack Obama would have held large government contractors accountable for workplace violations.

President Trump has signed a bill nullifying the order.

The Fair Pay and Safe Workplaces would have required companies with more than $500,000 worth of government business to disclose wage, safety, and environmental law violations over the prior three years.

To avoid a filibuster by Senate Democrats, the bill was passed using the Congressional Review Act.

House bill would make Right-to-Work the national law

2017-Feb-01  (Updated: 2017-Feb-21)By: Rob Dennis

Reps. Steve King and Joe Wilson have introduced a national Right-to-Work bill in the House of Representatives.

Despite the name, right-to-work laws do not guarantee employment. Instead, they make it illegal for contracts to require employees to pay dues to a union, even though they still receive higher wages negotiated by the union.

Right-to-work laws weaken organized labor - ultimately lowering wages and benefits as well as limiting workers' rights. They are largely supported by corporations and anti-union activists.

About half of U.S. states currently have right-to-work laws. This bill would introduce a similar law nationwide.

King and Wilson are former members of the American Legislative Exchange Council (ALEC), which has long pursued right-to-work legislation at the state level. Wisconsin and Indiana, among others, have passed right-to-work laws similar or identical to ALEC model legislation.

King has introduced a similar bill in several prior Congressional sessions.

House votes to delay overtime protection

2016-Sep-27  (Updated: 2016-Oct-19)By: Barry Shatzman

In May, the Department of Labor (DOL) issued a rule that would expand overtime protection for more than 4 million workers by Dec. 1.

In September, the House of Representatives passed a bill that would delay the expanded minimum wage protection for six months.

The delay almost certainly will fail - the White House already has said that President Obama would veto the bill even if the Senate passes it.

However, the timing of the bill is significant because of the upcoming presidential election. A delay to June 1 would mean that the 4 million workers would not receive the new protection until the new administration is in office. This bill passed entirely with the support of Republicans. If a Republican is elected president and the House and Senate remain with Republican majorities, the regulation could be repealed without ever having taken effect.

More workers to get overtime pay

2016-May-18By: Barry Shatzman

If you work more than 40 hours in a week but haven't been eligible for overtime pay, you might find yourself with a bigger paycheck by the end of this year.

Since 2004, overtime pay is legally guaranteed only to workers earning less than $23,660 per year. But starting in December, the threshold will increase to $47,892. That will add 4 million workers who must be paid overtime if they work more than 40 hours in a week.

The threshold will adjusted every three years to account for changing wages.

Major retailers are increasing their minimum wages

2015-Feb-19  (Updated: 2015-Mar-19)By: Barry Shatzman

Major retail stores have announced they are increasing the minimum wage they will pay employees.

In February, Walmart announced it would pay all of its employees at least $9 per hour. Target announced the same in March.

The stores already pay most of their employees more than the federal minimum wage of $7.25 per hour. Part of the reason for that is several states set their minimum wage higher.

For a list of the minimum wage in each state, visit the website for the National Conference of State Legislatures.

For more on Walmart's increase of its minimum wage, read the CNN Money story.
For more on Target's increase of its minimum wage, read the BBC News story.

Labor Department plans for minimum wage increase

2014-Jun-17By: Barry Shatzman

A regulation proposed by the Department of Labor (DOL) would implement President Obama's Executive Order increasing the minimum wage for workers employed under a federal government contract.

For more information about this Notice of Proposed Rulemaking, see the Department of Labor announcement.

President demands higher minimum wage for federal contractors

2014-Feb-12By: Barry Shatzman

Companies who contract with the federal government will be required to pay their employees at least $10.10 per hour starting in 2015, according to an executive order issued by President Obama on Feb. 12.

The minimum wage for these workers would increase each year, based on the Consumer Price Index.

Workers on these contracts who are paid partially through tips would see their minimum hourly wages increase to $4.90 per hour, increasing each year until it reaches 70 percent of the regular minimum wage.

The executive order applies to new contracts only. It does not apply to existing contracts.

Click here to read the executive order.

Senate proposes increasing minimum wage to $10.10

2013-Mar-05By: Barry Shatzman

A new bill would gradually increase the federal minimum wage to $10.10 per hour over the next two years. Every year after that the minimum wage would be increased based on the Consumer Price Index.

Though the minimum would not apply to workers who receive most of their income as tips, those workers also would see their minimum wage raised until it stabilizes at 70 percent of the regular minimum wage.

For more, see our description of the Fair Minimum Wage Act

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