Screwed News

HR Exec Got Fired for Following the Labor Law

According to the Federal Labor Standards Act (FLSA), it’s illegal for an employer to retaliate against an employee for doing her job, but that’s what happened to Michelle Kavanaugh. So she sued.

As an HR director in Illinois, Kavanaugh blew the whistle on her employer, CDS Office Systems Inc. when its executives refused to do the right thing when she raised concerns over the how the company classified employees as either exempt or nonexempt. The former classification reflects management responsibilities and means that those workers are exempt from receiving overtime pay. Nonexempt employee hours are tracked, and they are entitled to overtime pay, per the FLSA.

In June 2012, two IT technicians at the company had objected to their exempt status. They claimed they were entitled to overtime pay. Kavanaugh looked into the matter, investigating both FLSA overtime classification issues and the nature of the technicians’ job duties, which included installing customer workstations and servers.

Kavanaugh concluded that they were not exempt employees, were improperly classified and deserved to be paid overtime for any hours they worked in excess of 40 each week. When she reported the results of her inquiry, her boss told her to make the issue “go away.”

She told him that she couldn’t because “the law is what the law is and as an employer we have to follow it.” He repeated his requested, she repeated her answer.

Not long after, she was terminated. The reason her bosses gave her was a reduction in force/job consolidation.

As if. Kavanaugh’s lawsuit alleges that her termination violated the FLSA’s anti-retaliation provisions, Illinois common law and the Illinois Whistleblower Act.

Read the whole story on

Strip Club Dances Around Job Status Law

Last month, an exotic dancer filed a lawsuit against T’s Lounge, claiming that the strip club misclassified her job status as independent contractor. She contends she is an employee.

The difference is huge, when it comes to job benefits and protections. The Federal Labor Standards Act grants employees minimum wage and overtime pay, for example, and requires employers to cover them for workers’ compensation and employment taxes.

The dancer, Lorraine Calway, says that she was misclassified as an independent contractor for six years, and says that other dancers also have been cheated for the same reason.

As independent contractors, T’s Lounge dancers are paid only what customers tip (“fee for service”); they receive no wages from the business. An eight-hour shift, the lawsuit claims, sometimes resulted in compensation for Calway of nothing to $50.

As a strip club, T’s Lounge is not unusual in its pay policy. Recent court rulings have supported other dancers’ claim of misclassification. A federal court in New York ruled that a cabaret for years had been improperly classifying its dancers as independent contractors while treating them as closely supervised employees. Another federal court agreed that dancers for a nightclub in Atlanta also were employees, not independent contractors.

The difference between classifications hinges on how much freedom and control the worker has regarding such things as setting hours, equipment/costumes, attending meetings, etc.

Calway’s lawsuit specifies the control the club has over the dancers that supports their status as employees. They’re required to pay fees each shift to the house, the disc jockey and the bouncers. They’re required to wear high heels. They’re fined for being late or leaving early. They’re not permitted meal or rest breaks or time to sit. Their schedules and conduct are defined by the club.

If successful, Calway’s lawsuit could award her three years’ of back wages, and invite other dancers to make similar claims.

Read the whole story on The Palm Beach Post.

Nashville Company Forced to Change Its Job Classification Tune

The Tennessee Department of Labor is hopeful that a $300,000 fine for misclassifying construction workers is a deterrent to other employers who are considering breaking that law.

The penalty, which was imposed last month, reflected a statewide effort to stop employers from illegally classifying full-time employees as contract workers. It’s the largest such penalty so far, and state Labor Department officials say the practice is widespread in the construction industry.

Workers who aren’t classified as employees miss out on the benefits and protections of that status, including overtime pay and coverage for work-related injuries.

The guilty company, TJ Drywall of Nashville, was earning $2 million a year but paying only 5% of what regulators said it owed for workers’ compensation and unemployment insurance premiums. Employers don’t pay those premiums for contract workers, only employees.

Another construction business voluntarily reclassified its “contract” workers when it became aware of the huge amount levied against TJ Drywall. The fine money goes toward hiring more investigators to root out companies that misclassify employees.

Said one state labor official, “It upsets me when somebody who is following the rules – paying their insurance, paying their taxes like they’re supposed to. And they’re trying to compete with people who aren’t withholding any of that or paying for any of the benefits for somebody who is in fact an employee.”

Read the whole story on

Cops Get Back Pay for Department’s Wardrobe Violation

It took four years, but 26 police officers finally settled their lawsuit with the town of Orchard Park in western New York to recover pay for time they worked but for which they weren’t credited, and other violations of the Fair Labor Standards Act (FLSA).

The heart of their complaint was that donning all their gear to work a shift, then removing it later, took about 15 minutes, and their hourly pay did not include that time. After several years, those minutes add up to real money.

The equipment required to work a shift includes a gun belt, night stick, handcuffs, ammunition pouches, hat and bulletproof vest. Today, the time it takes to don and doff all that stuff is included in a regular shift.

The officers also claimed they spent time writing reports for which they also weren’t compensated.

Orchard Park agreed to pay the officers $72,000. Their individual amounts range from $100 to as much as $3,300, depending on how long they served in the department.

Read the whole story in the Orchard Park Bee.

Sports Store Confused ‘Players’ With ‘Managers’

When a business identifies an employee as a manager, he or she is classified as exempt; exempt, that is, from the wage and hour/overtime pay provisions of the Federal Labor Standards Act. But if the job duties turn out to be those of a nonexempt, or nonmanagement, employee, the business is in violation of the law.

Jason Vasil, a former assistant manager of a Dunham’s Sports store in Pennsylvania believes that’s what happened to him and many others who worked for the Michigan-based chain, so he is seeking class-action status for his lawsuit.

Unlike most management employees, Dunham’s assistant managers did not interview, hire, fire, conduct performance reviews or determine pay raises. Vasil says people with that title spent about 80% of their time running cash registers, assisting customers, stocking shelves, unloading trucks and performing light maintenance and janitorial duties.

That kind of work is not managerial, and it isn’t exempt from hourly pay, and the overtime that can accrue.

Vasil claims he regularly worked more than 40 hours a week, and often more than 50. He was paid a salary instead of an hourly wage for which he would have earned overtime.

In addition, Vasil says Dunham’s used assistant managers to establish new store locations, which required some of them to drive six to 20 hours from their own stores, working as many as 15 hours a day for as many as five days. No one received overtime, according to the lawsuit.

“The defendant utilized assistant store managers to perform this work as a way to reduce labor costs associated with the grand opening of a new store location,” it alleges.

Read the whole story by the Associated Press.

Reporter’s Questions Spur Settlement for Restaurant Workers

As of the end of August last year, 17,191 cases involving claims of wage theft were being handled by New York’s Labor Department, 1½ times as many as were pending at the beginning of 2008. One of them belonged to Solomon Perez and his co-workers.

Perez delivers food for an Indian restaurant in New York City. His wage is $5.25 an hour, plus tips. But he claims the restaurant takes 10% of the tips from online orders. Before this job, he was a dishwasher at another restaurant owned by the same people. His pay for a six-day work week of 60 to 70 hours was $360.

The low compensation for both jobs is a violation of New York and federal labor laws.

In 2010, Perez and two other workers filed a complaint with the state for wage theft. Six months later, the restaurant closed, and the Department of Labor told the workers not to worry, that the case was going well. They checked in every few months for an update and finally were told their case couldn’t be resolved.

A few weeks ago, New York Gov. Andrew M. Cuomo promised to support an increase in the state’s minimum wage to $10.10 an hour from $8, and said he agreed that places where it was more expensive to live, like New York City, could set the local wage higher.

But it doesn’t matter what you’re paid if employers can take advantage of a huge, desperate labor pool by paying you less than $6 an hour.

Only after inquiries by the media did the governor’s office announce earlier this month that a settlement had been reached with the owners of the two restaurants that employed Perez. Reportedly, a total of $225,000 will be paid to 19 workers including damages for delays in the investigation.

Read the whole story in the New York Times.

Disabled Workers Had Hypocritical Boss

Paying employees less than what they are entitled to is not only illegal but immoral, and when those workers are disabled, the offense is particularly repugnant.

That was the situation for nine disabled workers at a now-defunct San Francisco company that hired them to perform assembly and packaging work. A U.S. Department of Labor (DOL)  investigation has resulted in the employees receiving $43,000 in back wages they should have gotten over the course of the year they were cheated.

The company, Disabled Employees Rehabilitation Inc. also must pay $9,900 in penalties.

The company’s Facebook page said it was founded in 1948 to provide “a positive, nurturing and healthy environment for the physically and intellectually disabled adults to learn skills, feel empowered and be productive.”

Apparently, such an environment does not include fair wages for their productivity.

According to the DOL, the products they assembled and packaged included iPhone wallets and cases, toys, first aid kits and soap.

Federal labor regulations permit some employees with a physical or mental disability to be paid less than the federal minimum wage, but their employers must be certified that they are following stringent regulations. Disabled Employees Rehabilitation was not certified.

“This should not have happened, and the fact that it was being done under the cloak of an organization presenting itself as having a charitable purpose just makes all these violations all the more shameful,” said the DOL.

Read the whole story in The San Francisco Appeal.


College Founder Teaches Poor Labor Lesson

A horrifying case of exploitation involving not only forced labor but the threat of retaliation has resulted in a federal grand jury indictment against the president and founder of Cathedral Bible College in South Carolina.

Reginald Wayne Miller is accused of forcing two foreign students at the college to work with only sparse pay from 2012 until this year. The students also were subject to unbearable living conditions.

Investigators with Homeland Security claim that Miller forced them to work, sometimes more than 40 hours a week, on campus and at his residence, for as little as $25 per week. If they objected or failed to follow his orders, he threatened to cancel their visas and deport them to their home countries.

Just because someone is foreign, student or otherwise, does not excuse an employer from U.S. wage and hour laws.

During their investigation, the feds said at least eight Cathedral Bible College students reported that the classes offered at the college “were not real,” and that the main focus of the school is having students work full-time hours.

Living conditions at the college reportedly were deplorable — long intervals without any hot water, heat or air conditioning. The food was past its sell-by date, minimal and lacking in nutrition.

Read the whole story on The Sun News.

Restaurants Leave a Bad Taste in Employees’ Mouths

In the last couple of years, the U.S. Department of Labor (DOL) sure has been busy in south Florida. Since its “strategic enforcement initiative” was launched in 2012, it has found 152 restaurants in violation of  labor law.

Among the offenders, according to the DOL, five Frenchy’s and two Vallarta’s Mexican restaurants had “significant” violations, namely, withholding tips from wait staff, failing to pay overtime and taking the fees out of employees’ pay when customers used credit cards.

The initiative resulted in the scores of restaurants agreeing to pay more than 1,500 employees back wages of $861,000. Additional penalties brought the tab for breaking the law to more than $1 million. The restaurants also agreed to follow the rules in the future.

But we have a feeling the DOL will need to remain vigilant. One story source told a reporter that a local restaurant recently offered him $6 per hour to wash dishes; the minimum wage is $7.25.

“I went to high school in New Tampa and I have a lot of friends who worked at restaurants,” he said, and “they all told me the same thing.”

Read the whole story on and the Tampa Bay Business Journal.

Construction Workers Build Case Against Contractor

When the Connecticut state Department of Labor ordered three contractors to stop working on a shopping center project because they had violated rules, another labor issue arose as well: union workers protesting that what they say should have been their jobs are going to outsiders.

According to Connecticut Labor Commissioner Sharon Palmer, the employers who were issued the stop work orders did not provide their workers with “the proper workplace protections that are the right of every working person.” But the carpenters union wasn’t objecting to illegal practices that left workers without required insurance coverage, it was unhappy that one of the suspended contractors, Georgia-based G&F Group LLC, had brought in workers from outside Connecticut rather than hiring locally.

“Connecticut contractors, unionized or not, cannot compete for work when something like this happens,” an organizer said.

The other two contractors told to stop work were Alvin Quality Masonry and Industrial Technical Services. They were found by state labor department inspectors not to have workers’ compensation or unemployment insurance coverage for their employees.

Palmer said the employers were “taking unfair advantage of their employees and also cheating the state by not paying the proper taxes or providing unemployment insurance and workers’ compensation. This is an unacceptable way to do business in Connecticut because our workers are not protected should they get hurt on the job or become unemployed. …”

Companies on the receiving end of a stop-work order in Connecticut may not resume work until they prove that all deficiencies have been corrected. They are fined $300 for each day they operate in violation.

But what concerns the union isn’t the money draining from employers’ pockets, but from their own.

Read the whole story on the New Haven Register.