Articles Posted in Wage and Hour

MercuryNews.com of San Jose, CA recently reported that three executives and a foreman of a heating, ventilation, and air conditioning installation company in Hollister, CA are facing felony charges of forcing employees to return more than $170,000 in salary from public projects in Santa Clara County.

The charges against the men include taking and receiving the wages of a worker, falsely reporting wages paid on a public works payroll reporting form, violations of workers’ compensation insurance premium fraud, and making a false or fraudulent statement to discourage a worker from claiming benefits or pursuing a workers’ compensation claim.

Company executives would issue a paycheck to workers based on the hourly wage for public works projects, but then demand that the workers return about 75 percent of the paycheck. When a contractor is awarded a public works contract, the contractor must certify that they are paying employees the prevailing wage. The kickback scheme netted more than $170,000 for the company executives.

A recent report from the National Council on Compensation Insurance (NCCI) shows that workers’ comp costs for injured workers aged 65 and older are generally lower than younger employees because older employees are paid less.

Although workers aged 65 and older make up a small share of employment and injury and illness cases – below 5 percent – the number of workers 65 and older has increased by nearly 50 percent since the late 1980s. The report estimates that the number of older workers is likely to increase due to the state of the economy. Many older employees must postpone their retirements and continue to work in the face of depleted life savings and reduced home values.

The report highlighted the following findings:

Employees of seven of Philadelphia’s largest health systems are suing their employers, claiming they were not compensated for working through unpaid lunch breaks.

The seven health systems include the University of Pennsylvania Health System, the Jefferson Health System, Temple University Health System, Mercy Health System, Albert Einstein Healthcare Network, Abington Memorial Hospital, and Aria Health System.

In an article on philly.com, Mercy Health System said in a statement, “We remain committed to fair and lawful pay practices and plan to defend ourselves vigorously in any lawsuit.”

Suits were filed in federal and state courts. According to federal and state law, hourly workers are required to be paid for all the time that they are working. The hospitals use a computerized payroll system that automatically deducts an unpaid half-hour lunch break. Hourly employees, including nurses, technicians, and janitors, who are too busy to take lunch, are not paid unless they ask for compensation.

Hospital employees choose to work through breaks because they are reluctant to leave their coworkers shorthanded. Others are afraid to push for their pay for fear of losing their jobs in this economy.

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As the U.S. economy struggles to survive, states across the nation are looking at all available avenues for bringing in revenue. In an article on the Maine Public Broadcasting Network (www.mpbn.net), it is estimated that the state of Maine is losing more than $40 million dollars a year in tax revenues from “employee misclassification”: a way for employers to categorize employees as independent contractors so that they can avoid providing benefits and paying state and local taxes. This has prompted the creation of a state task force to address the growing problem of employee misclassification in Maine.

The task force, created by Maine Gov. John Baldacci, has heard the same stories repeated by a number of workers who have been taken advantage of by employers:

“This guy owed me so much money. We lost – I was renting a house, I have two kids. I’m on assisted living now to this day – it wouldn’t have happened if it wasn’t for people like him.”

“This is hundreds and hundreds of people that this is happening to every day. And people depend on this money. When somebody says, ‘I’m going to pay you this money’ and then they don’t, well, what are you supposed to do?”
The problem is most evident in the construction industry. The article noted that a 2005 study by Harvard University found that one in seven construction employers in Maine misclassified workers as independent contractors.

One worker was prompted by his boss to sign a release saying that he had been paid for his work – even though he had not. John Leavitt, business manager for the New England Carpenters Union in Maine, said this was just another example of how some contractors feel they can exploit their workers.

But employee misclassification affects not just the construction industry, but other types of businesses, as well. The state task force hopes to find a way to ensure all businesses are compliant with existing laws.

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Like any insurance coverage, reporting more workplace injuries can result in higher costs to employers for their workers’ compensation coverage. Now the results of a recent investigation by the Government Accounting Office (GAO) and the federal Occupational Safety and Health Administration suggest that employers are discouraged from reporting workplace injuries and illness because it could affect their workers’ compensation rates.

The report from the GAO, a nonpartisan government research organization, noted, “Several researchers and labor representatives said that because employers’ workers’ compensation premiums increase with higher injury and illness rates, employers may be reluctant to record injuries and illnesses.”

According to an article on the Insurance & Financial Advisor website (www.IFAwebnews.com), the report also found evidence that “businesses sometimes hire independent contractors to avoid the requirement to record workers’ injuries or illnesses because they are not required to record them for self-employed individuals.”

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On Oct. 2, FedEx Ground drivers in New York, New Jersey, and Montana delivered a complaint to FedEx Ground Package System Inc. in Moon Township, PA, regarding their classification as independent drivers rather than employees.

An article in the Memphis Business Journal reported that the complaint, filed by the State of New York’s Attorney General Andrew Cuomo, stated that “more than 1,000” FedEx delivery drivers should be reclassified as employees, citing reasons including FedEx’s control of their work schedules, the strict monitoring of their delivery process, and their inability to bargain over their operating agreements.

As a result of the misclassification, drivers in New York, New Jersey, and Montana could not receive workers’ compensation benefits and could not be protected by anti-discrimination laws, labor relation laws, and other laws that protect workers.

All employers in the Commonwealth of Pennsylvania are required by law to have insurance for workers’ compensation coverage for every employee. If an employee suffers an injury in the course of employment, workers’ compensation can provide for lost wages and medical expenses.

FedEx Ground is a division of Memphis-based FedEx Corp. FedEx has until Oct. 27 to respond to the complaint.

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As the nation braces for the coming H1N1 (swine flu) pandemic, the federal government has issued warnings to the general public, including the following tips from flu.gov:

• Cover your nose and mouth with a tissue when you cough or sneeze.
• Wash your hands often with soap and water.
• Avoid touching your eyes, nose, or mouth. Germs spread this way.

In addition, healthcare facilities and businesses are also bracing for the impact of swine flu on their workforces. The biggest issue involves the type of sick leave that companies offer employees.

In an article on CNNMoney.com, the National Partnership for Women and Families, a Washington, D.C.-based advocacy group, reported that 48% of the U.S. private-sector workforce can’t take paid leave without advance notice. However, with the Centers for Disease Control (CDC) recommending that people infected with the flu stay home for at least 24 hours after fever symptoms have disappeared, employees with limited or no sick leave are caught in the middle. If they go to work sick, they risk infecting others and spreading the flu; if they stay home to recover, they risk losing their jobs.

Even healthcare facilities are caught in the conflict. In an article on medicalnewstoday.com, the National Nurses Organizing Committee–Arizona reported that many registered nurses in surveyed facilities are not guaranteed sick time in case of swine flu infection. Also, many nurses are threatened with discipline if they fail to come to work.

According to CNNMoney.com, unions and worker advocates have stepped up efforts for local laws that require businesses to offer paid sick leave. There are now 15 states and cities that have paid sick leave bills in the works.

“This is definitely pressing because of all the projections of how the swine flu and the regular flu season will be affecting people,” said Shula Warren, chief of staff for New York City council member Gale Brewer. Brewer is responsible for introducing local legislation for a sick-leave law that would also allow New York workers to use sick time to care not only for ill children, but also for kids whose schools are closed because of swine flu fears.

If Congress takes up the Healthy Families Act, initially spearheaded by the late Sen. Ted Kennedy and now taken up by Sen. Christopher Dodd, D-Conn., it would provide up to seven paid sick days a year at all companies with 15 or more employees.

For now, the CDC recommends that employers encourage employees with flu-like symptoms or illness to stay home, operate with reduced staffing, and have employees who are at high risk of serious medical complications from infection work from home.

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