It Is About Time!

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For years, powerful lobbyist for corporate America have successfully impeded government intervention with regard to wide-spread violations of state and federal wage protection laws. Well, times have changed. Yesterday, Senator Sherrod Brown and Representative Lynn Woolsey introduced the Employee Misclassification Protection Act which is aimed at helping millions of workers who are misclassified by their employers as independent contractors, often as an excuse to avoid paying federal and state payroll taxes. This scheme allows unscrupulous employers’ to cut cost by as much as 30 percent—and gives them an unfair advantage over law-abiding competitors, driving down labor standards for all workers.

For workers affected by this practice—construction workers, hospitality workers, broadcast technicians, stage hands, musicians, home health care workers and day laborers, among many others—this bill offers a pathway to receiving labor protections that most Americans take for granted, like being paid the minimum wage and receiving overtime pay after 40 hours of work, or workers’ compensation when they are hurt on the job. Workers wrongly classified as independent contractors also are denied pension or and health benefits, and are told they aren’t protected by civil rights laws.

The bill would require employers to classify workers as employees, using a well-defined test that has existed since 1947, and it establishes a penalty for failing to do so. It applies common sense to the workplace, requiring that employers tell workers if they have been classified as independent contractors and how they can challenge that classification. The bill also protects workers who do challenge misclassification from retaliation.

Workers should be paid what the law says they are due. Misclassification has cost workers untold millions in wages and has cost the federal and state governments many millions in unpaid income, Social Security, unemployment and workers compensation taxes and premiums. New York City construction industry losses in payroll taxes and social insurance premiums due to misclassification are estimated at $170 million a year. In Ohio, the attorney general estimates annual costs from worker misclassification may be $100 million for unemployment insurance, more than $510 million in workers compensation premiums and almost $180 million in forgone state income tax revenues. Misclassification, he says, cost cities and villages more than $100 million in local income tax revenues in 2006, and cost school districts $7.8 million in 2008. Many other states report a similar impact. In fact, the Internal Revenue Service reported that in 1984, almost 20 percent of construction industry employers misclassified workers; a number that has surely grown.

This bill is a step in the right direction to protect workers, make sure that the country’s labor standards are upheld and place all employers on a level playing field. We look forward to working with Senator Brown and Representative Woolsey and their colleagues on this important piece of legislation. It is a crucial component in our ongoing campaign to ensure that all jobs are good jobs.

Eric L. Young, is a seasoned trial lawyer who specializes in wage and hour litigation and whistleblower litigation. Mr. Young can be contacted at 800-590-4116 or eyoung@young-lawgroup.com.

Uber Settles 2 Driver Misclassification Lawsuits for $100 Million

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Uber, the San Francisco startup that offers a popular international ride-hailing app, will continue to use independent contractors as drivers after settling class-action lawsuits arguing that the drivers were actually employees rather than independent contractors. The lawsuits for drivers in California and Massachusetts were highly publicized disputes in the ongoing battle between employers and workers over their labor rights in the new economy.

Wage Proposals Could Benefit Philly Workers

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There are a few different wage proposals at various levels of the government which we thought we would call attention to at the conclusion of a work week of beautiful weather here in Philadelphia. Philadelphia, Pennsylvania and the Federal Governments are considering wage proposals to increase the minimum wage, stop wage theft and help unemployed workers get back to a job.

Amazon Working Conditions Just As Bad for Delivery Drivers

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Recent news headlines have focused on the “unsafe” and “grueling” working conditions that employees labor under in Amazon warehouses across the globe. While the media focuses its attention on the warehouses, delivery drivers working for Amazon are now stepping forward to have their stories told as well. 

Amazon is famed for its lightning fast delivery times, with customers often receiving orders within the same day. These tight delivery schedules make for stressful and often hazardous working conditions that endanger drivers. 

 

Amazon Drivers Are Overworked and Underpaid

Amazon delivery drivers are reporting working ten to fourteen hours in a shift. This is in part because drivers are not allowed to return any packages from their routes, meaning drivers can make over 160 stops per shift. 

While the pay rate seems decent enough, with drivers starting at $15 an hour, this rate is actually far less than the average starting wage for other delivery drivers. For example, UPS drivers are represented by the Teamsters Union that starts their wages at $21 an hour, up to $40 an hour or more for more experienced drivers. 

 

The Amazon Mentor App Leads to Invasive Oversight for Drivers

When drivers start their shift, they first log into the Amazon “Mentor” app. The Mentor app provides information on where to leave packages, access codes to apartment buildings, and dictates every step of the drivers day. The app tracks and measures driving behaviors such as speeding, harsh braking, or making phone calls, and gives the drivers a score based on these behaviors. 

Since the Mentor app is constantly monitoring the drivers every move, it also alerts their supervisors if they deviate or stop along the route even briefly. When a van stops for longer than three minutes, a dispatcher will call the driver and ask why. This constant oversight creates a stressful environment for drivers when dropping off packages or simply trying to take a lunch or restroom break.

 

No Bathroom Breaks for Delivery Drivers

With the Mentor app constantly monitoring drivers, every stop has to be accounted for. That leaves most drivers with no time to use the restroom on their ten hour shifts. Drivers need to use public restrooms such as ones inside grocery stores, so if their route does not include an area that has such a location, drivers have to make a long detour that could cost them their job. Because of these strict measures, drivers report using empty water bottles in their vehicles instead of stopping to use the restroom.

 

Amazon Hires Contractors To Prevent Workers From Organizing

Amazon has consistently stated that they are not responsible for these working conditions because the drivers are not actually Amazon employees. That’s because Amazon uses contractors for delivery services, a move that allows them to duck responsibility, while also helping to prevent workers from organizing for better conditions. 

The Teamsters Union has been working with Amazon drivers and the delivery service providers that hire them in an attempt to curtail these exploitative practices, with the director of the Teamsters Amazon project stating, “This sort of model is problematic for the entire (delivery) industry”. 

 

Do Amazon Delivery Drivers Get Overtime?

Although drivers are being asked to work long hours with few breaks, they are still only paid flat day rates for their work with no additional pay for overtime hours. This has led to multiple class-action lawsuits being filed against the company in over ten states. 

Amazon recently agreed to pay out over $8.2 million in a class-action lawsuit alleging that they were engaging in wage-theft by refusing to properly compensate drivers. The lawsuit claims that Amazon failed to pay the minimum wage, and denied compensation for rest breaks or overtime. Amazon has also been fined $6.4 million by California regulators for similar wage-theft violations, though Amazon has stated it is appealing the fine. 

 

Workers Deserve Protections

While Amazon founder Jeff Bezos disputes Elon Musk for the title of world’s richest person, the drivers who keep his company running are struggling to pay rent, while working under increasingly stressful and unsafe conditions. 

The team at McEldrew Young Purtell Merritt have decades of experience fighting for workers, and are following these developments closely. If you work as a delivery driver for Amazon and have been subject to unfair working conditions, contact us today at 1-866-333-7715 or online via our form.  

 

 

Hot Issue: Independent Contractor Misclassifications

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Independent contractors may wish to have an employment lawyer examine the appropriateness of their company’s claim that they are not an employee in light of two recent events in California.

The California Labor Commission has ruled that a San Francisco driver for the popular on demand taxi-alternative app Uber is an employee and not an independent contractor. The company now owes the individual unpaid expenses during her two months as a driver. A state agency in Florida has previously ruled that Uber drivers are employees as well. There are lawsuits (as well as protests) over on this issue in other states.

FedEx has also settled a longstanding California lawsuit brought by its Ground and Home Delivery drivers about their misclassification as independent contractors for $228 million. The court must still approve the settlement. The settlement only deals with drivers in California, and it is still too early to say whether FedEx will settle or continue to defend that lawsuits in other states on this issue.

By labeling their work force as independent contractors, companies can shift expenses such as Social Security and tax withholding on to their workforce. This has proven especially popular among early technology startups, such as Uber, as they try to create a marketplace of on-demand service fulfillment.

This area could also be one for whistleblowers to report to the federal government as well, since misclassification can result in unpaid taxes to the Internal Revenue Service.

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Employment Class Action Settlements Set Record in 2015 Amidst Tidal Wave of FLSA Lawsuits

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Settlements in all types of workplace class actions in 2015 reached an all-time high of $2.48 billion according to the 12th Annual Workplace Class Action Litigation Report published by Seyfarth Shaw, a law firm representing employers in the defense of workplace lawsuits. The report identifies and analyzes key trends and settlements from 2015 in workplace litigation, including lawsuits under the FLSA, ADEA, ERISA, Title VII and various other laws.

New York Investigates Short Notice Work Shifts at Retailers

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New York Attorney General Eric Schneiderman is investigating on-call staffing at 13 major retailers including Gap, Sears, Target and Abercrombie & Fitch. Last week, the NY AG asked the retailers to provide information on their use of on-call shifts by May 4th.

Apparently, some retailers are using scheduling software to provide just in time schedules, notifying workers less than a week in advance of their hours at the store. Others are requiring individuals to call-in prior to coming to work. The software predicts customer demand based on weather patterns and recent sales and alters schedules. If there isn’t enough demand on a particular day, it may tell managers to send workers home unexpectedly.

The practice appears to be widespread. A survey in 2011 found that 70 percent of workers didn’t know their schedules more than a week in advance. A significant number, around twenty percent, were expected to call in during the 24 hours prior to see if they would indeed be needed at work.

Legislators in both New York and California are considering further measures to rein in the practice of telling an employee that they are not needed to work less than 24 hours in advance. The New York bill would have to pay workers for a minimum of four hours if they were not given more than 24 hours of notice that they did not need to work.

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Democratic Senators Push for Living Wage By Senate Contractors

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Democratic Senators sent a letter to the Chairman of the Senate Rules Committee urging the adoption of a requirement that Senate Office building contractors pay their employees a living wage. The letter does not call for a specific amount but does object to the low wages paid food and restaurant workers that must be subsidized by taxpayer-funded benefits. The letter sent by the Senators is available on Senator Sherrod Brown’s website.

Last week, federal contract workers engaged in a one-day strike to urge President Obama to allow workers to unionize and give preference to contractors that pay $15 an hour.

The living wage movement has spread around the country and has successfully changed practices in several areas, including Seattle. Implementation of Seattle’s $15 minimum wage started this month. The law will incrementally increase the minimum wage in the city over a period of years determined by the businesses number of employees. Large employers were given three to four years and small employers (less than 500 employees) were given five to seven years.

Last year, President Obama issued Executive Order 13658 establishing a minimum wage of $10.10 for workers on Federal construction and service contracts. The order applied to new contracts and replacements for expiring contracts resulting from solicitations issued on or after Jan. 1, 2015 or contracts awarded outside this process from that date as well. The order covers four major categories of agreements, including construction contracts covered by the Davis-Bacon Act, service contracts covered by the Service Contract Act, concessions contracts, and contracts in connection with Federal property or land relating to services offer to government employees and the general public.

Last week, we discussed the possibility that living wage measures such as the one called for by the Senators and the President’s Executive Order could be the subject of qui tam lawsuits under the False Claims Act in addition to the standard case by employees for wage and hour violations. This story reinforces that belief. We expect to see more employers may decide to circumvent wage and hour laws as the minimum wage increases and that there will be more lawsuits brought by employees as well as whistleblowers.

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Living Wage Whistleblowers Could Be Next For False Claims Act

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There could be more whistleblowers under state and city False Claims Act in the coming years if recent initiatives to tie the payment of a living wage to government contracts and business subsidies takes hold in other jurisdictions.

A Hudson Yards office tower in New York City is the first in the Big Apple to strike a deal for construction tax breaks since Mayor Bill de Blasio raised the hourly wage to $13.13 and expanded the living wage law to include employees of commercial tenants on construction projects receiving more than $1 million in subsidies.

Because New York City has a whistleblower law which rewards individuals for reporting false claims against the local government, whistleblowers may be able to report companies which do not follow the terms of deals like this and earn a reward. Of course, more research would be necessary into the specific terms of the law, because tax enforcement actions are sometimes excluded from versions of the False Claims Act.

Although we have used New York City in this example, it similarly apples to the Philadelphia False Claims Act and the living wage law here. The executive order issued by Mayor Michael Nutter requires contractors receiving government contracts from the City of Philadelphia to pay a specified minimum wage to its employees working on the contract. If the individuals are paid less, the submission of a payment request is a false claim.

As with any law, there are exclusions which limit the application of the rules to certain parties and certain employees. For example, individuals in summer job programs and bona fide student internships are excluded from the coverage of the law in Philadelphia. So any particular case will require careful review by an attorney to determine whether the law applies to the individual.

In the past, minimum wage laws have typically been enforced by employees bringing collective claims for their unpaid wages. However, the Federal False Claims Act has been applied in several cases where federal contractors or subcontractors are not paying the prevailing wage required by the law.

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