Posts Tagged ‘labor laws’

Young workers + injuries + labor law violations = huge penalties

Monday, July 9th, 2012

Every summer, we beat the drum about the moral mandate of keeping young workers safe. But as with many things, the morale mandate all too often speaks to employers in a soft voice while money shouts in a big voice. So if “doing the right thing” isn’t enough of a reason to keep kids safe, there’s also a big economic incentive in the form of penalty avoidance for employers to toe the line when it comes to safety and strict adherence to youth labor laws: if a young worker is injured, the employer may be subject to steep additional penalties if labor law violations are present. These penalties are “uninsurable” – that is, they will be out-of-pocket for the employer since the insurer is not on the hook for penalties related to an employer’s labor law violations.
In Denmark v. Industrial Manufacturing Specialists, Inc., the Alabama Court of Civil Appeals recently upheld double compensation for an injured 16 year old worker due to the employer’s child labor laws violations. The youth was a part-time worker who was working with a coworker to load a 1,300-pound metal bar stock onto a table so that it could be cut by a band saw when the load fell on the youth, crushing him and causing internal injuries and a fractured ankle. Even though the youth was not actually engaged in the prohibited activity (use of the band saw), “The court found a nexus between the task the worker was performing at the time of the accident and the manufacturer’s violation of the child labor laws. Therefore, the worker was entitled to double compensation for his injury.”
Before employing minors, it is essential to know and obey child labor laws, particularly in regards to prohibited work. Employers who fail in this charge may wind up paying double compensation and/or fines if an injury occurs. There are federal laws governing the employment of minors in both non-farm work and in agricultural work, but employers need to know the governing state law because the Department of Labor states that, “Where state law differs from federal law on child labor, the law with the more rigorous standard applies.”
Laws cover such matters as minimum age, prohibited work by age cohort, whether work permits are needed, and restrictions on the hours of work allowed. Here are some compliance resources for employers. As with most laws, ignorance of the law is not a defense.

Federal Laws – Hiring Youth & Compliance Assistance
The U.S. Department of Labor’s Wage and Hour Division (WHD) administers and enforces the federal child labor laws. Generally speaking, the Fair Labor Standards Act (FLSA) sets the minimum age for employment (14 years for non-agricultural jobs), restricts the hours youth under the age of 16 may work, and prohibits youth under the age of 18 from being employed in hazardous occupations. In addition, the FLSA establishes subminimum wage standards for certain employees who are less than 20 years of age, full-time students, student learners, apprentices, and workers with disabilities. Employers generally must have authorization from WHD in order to pay sub-minimum wage rates.

Among the FLSA penalties, DOL says that:

Employers are subject to a civil money penalty of up to $11,000 per worker for each violation of the child labor provisions. In addition, employers are subject to a civil money penalty of $50,000 for each violation occurring after May 21, 2008 that causes the death or serious injury of any minor employee – such penalty may be doubled, up to $100,000, when the violations are determined to be willful or repeated.

See more at the Deparment of Labor’s Youth & Labor topic page
State Laws
Many states offer double compensation or other penalties related to an injured youth when there are labor violations. In some instances, penalties can be imposed even when the labor violations aren’t directly related to the injury.
Selected State Child Labor Standards Affecting Minors Under 18 in Non-farm Employment as of January 1, 2012
State Child Labor Laws Applicable to Agricultural Employment
Links to state labor offices
Compliance with labor laws is only one part of the employer’s responsibility: the other is ensuring a safe environment. Young workers are green workers who don’t have the experience, judgement, and work hardening that older workers have. That heightens their risk of injury. It’s important to provide task-specific training with an emphasis on safety. We also encourage the idea of pairing a young worker up with a more experienced mentor. The article Preventing Young Worker Fatalities offers a good list of tips. Also, see our prior posts about young workers for more tips.

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Posted in Safety & Health | No Comments »

Study reveals widespread labor law violations for low-wage workers

Tuesday, September 8th, 2009

According to the Department of Labor’s site on the history of Labor Day, the holiday is a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. But for low wage workers, there isn’t much to celebrate this holiday. A 2008 study of 4,387 workers in low wage jobs in Chicago, Los Angeles and New York – Broken Laws, Unprotected Workers (pdf) – revealed widespread violations of basic wage and labor laws. These violations affected all worker, regardless of legal status, race, or gender. The study found numerous violations of minimum wage and overtime laws; workers who log hours without being paid for their time; workers who are denied earned breaks and meal time; charges illegally deducted from worker pay; retaliation by employers for complaints; and denial of workers’ compensation benefits, including encouraging employees to commit fraud.
Nearly two-thirds of all workers surveyed had experienced a wage violation in the week prior to being interviewed. About one in four had been paid less than the minimum wage the week before being surveyed; about one in seven had worked off the clock; about three in four who had worked overtime were not paid the proper amount.
Stating that the workers’ comp system is not functioning in the low-wage labor market, the report’s executive summary noted the following:

    Of the workers in our sample who experienced a serious injury on the job, only 8 percent filed a workers’ compensation claim.
  • When workers told their employer about the injury, 50 percent experienced an illegal employer reaction — including firing the worker, calling immigration authorities, or instructing the worker not to file for workers’ compensation.
  • About half of workers injured on the job had to pay their bills out-of-pocket (33 percent) or use their health insurance to cover the expenses (22 percent). Workers’ compensation insurance paid medical expenses for only 6 percent of the injured workers in our sample.

The economic toll
Study authors call these violations wage theft and paint a grim picture of the economic toll that these violations impose on the workers and on the communities at large. The average worker lost $51 from an average weekly earnings of $339, or about 15%. Assuming a full-time, full-year work schedule, we estimate that these workers lost an average of $2,634 annually due to workplace violations, out of total earnings of $17,616.
Survey authors estimated that approximately 1,114,074 workers in the three cities combined experience least one pay-based violation per week. Extrapolating from this figure, front-line workers in low-wage industries in Chicago, Los Angeles and New York City lose more than $56.4 million per week as a result of employment and labor law violations.

When impacted workers and their families struggle in poverty and constant economic insecurity, the strength and resiliency of local communities suffer. When unscrupulous employers violate the law, responsible employers are forced into unfair competition, setting off a race to the bottom that threatens to bring down standards throughout the labor market. And when significant numbers of workers are underpaid, tax revenues are lost.

The report recommends three principles that should drive the development of a new policy agenda to protect the rights of workers:

  • Strengthen government enforcement of employment and labor laws
  • Update legal standards for the 21st century labor market
  • Establish equal status for immigrants in the workplace

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Posted in Research | 3 Comments »

The End of Civil Discourse?

Monday, August 10th, 2009

We live, alas, in interesting times. As the health care debate spirals downward, the fault lines in our culture become more and more evident. On one side, anti-reformers stack town meetings to prevent any meaningful dialogue from taking place. These folks are even trying to intimidate unions. What am I missing here? Who is supposed to intimidate whom? On both sides of this momentous debate, pockets are being stuffed with special interest money. This makes the ultimate outcome – whether status quo or some degree of reform – highly suspect. The notion of genuine debate and civil discourse have disappeared altogether.
Which leads us back for a moment to the lingering conflict between UPS and FedEx. Back in December, we blogged FedEx’s unusual charter:

FedEx began 35 years ago as an airline. As such, it fell under the Railway Labor Act of 1926, which made unionization of public and commercial transport companies extremely difficult. By contrast, UPS began as a trucking company and was subject to the National Labor Relations Act from day one. UPS is unionized: they pay workers more than FedEx, they provide better benefits.

It would be to UPS’s advantage to remove their fierce competitor from the Railway Labor Act and force them to operate under the NLRA. That requires an act of congress, so it’s no surprise that UPS has been aggressively lobbying congress for this change. They say they want to level the playing field.
Level playing fields are fine. The devil is in the details: how do you accomplish your goal? Apparently, by playing unfairly. UPS has been accused of forcing union members to write to their congressmen, urging passage of legislation to eliminate the FedEx exemption. The letters bombarding congress appear to express the views of individual UPS drivers. In fact, many are based upon prescribed forms. We read in the Washington Post:

Officials with UPS and the International Brotherhood of Teamsters, which represents 240,000 UPS drivers, acknowledge that the company has paid for workers’ time to pen many of the letters and has supplied the envelopes, paper and stamps needed to mail thousands of them to Congress. UPS spokesman Malcolm Berkley said the effort was “totally voluntary, and any allegations to the contrary are ridiculous.”

But Internet sites dedicated to UPS-related discussions feature dozens of accounts from anonymous employees who in recent weeks have said they were forced to write the letters or felt they would be punished for not doing so. Such tactics could run afoul of both labor laws and lobbying disclosure requirements, according to legal experts.

So it appears that UPS may be violating labor laws in order to force FedEx to operate under labor laws. Were you expecting anything different?
Images
In one of Norman Rockwell’s many iconic images, a humbly dressed man stands up in a town meeting to express his opinion. The painting is entitled “Freedom of Speech.” We could certainly argue the degree to which such freedoms ever existed. But it’s all too clear that Rockwell’s image bears no relation to what is occurring today. If he were to depict our present situation, we would see an enraged citizen shouting down his local congressman. This individual would waive an inflammatory poster complete with Nazi symbols. In his pocket, we might glimpse the bus ticket that brought him into town. In the corner we might see an innocent mother, huddling to protect her child from the pending violence.
We are currently facing many complex issues, ranging from FedEx’s status as an employer to the health care options for every American. There are pros and cons to every path. No one really knows how to get from point A to point B. Indeed, we may not even agree on what point B is. But when civil discourse deteriorates into the ravings of the mob, we all lose. If winning is defined by who shouts the loudest, who cheats the most effectively, who succeeds in intimidating the oppostion, there will be no victory for anyone.

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Posted in Best Practices, Business, health care | 6 Comments »

Annals of Fraud: Trifecta for Bay Area GC

Friday, May 29th, 2009

In the world of workers comp, there is no lack of opportunity for fraud. We’ve seen doctors rip off the system by billing for services that were either never provided or not needed. We’ve seen employees fake injuries (relatively rare) or malinger on comp long after injuries have healed. We’ve seen insurance agents pocket money intended for insurance premiums. We’ve seen insurance adjusters embezzle claims funds. We’ve seen state comp bureaus (Ohio) engage in fraud. And we’ve seen employers rip of the system in a number of ingenious ways.
Which brings us to the saga of NBC Contractors (presumably no relation to the television network), a California general contractor. Three owners of the company – Monica Mui Ung, 49, of Alamo; Joey Ruan, 31, of San Leandro; and Tin Wai Wu, 28, of Millbrae – have been charged with 48 counts of insurance fraud, labor code violations and tax fraud. Bail was set at $535,000 for each of them. (You can check out their bare-bones website here.)
With Ung listed as the (minority, female) owner, NBC Contractors qualified for preferential treatment on public projects. Between 2003 and 2007 they successfully bid on 27 public works projects, including El Cerrito City Hall and Piedmont Elementary School.
Cheater’s Delight
According the indictment, NBC used a trifecta of cost cutting measures:
1. They underpaid workers comp premiums a total of $1.45 million, by misclassifying their workers into lower risk occupations and by under-stating payrolls
2. They violated fair labor standards, by failing to pay for overtime or sick leave, impacting 19 workers a total of $3.6 million
3. They underpaid payroll taxes on workers, depriving state and federal government of tax revenues
With these (criminal) “cost savings,” NBC was able to underbid their competitors. These business practices cheated a lot of people: NBC’s own workers, their insurance carrier, their competitors, and all law-abiding businesses who played by the rules. We can only hope that the quality of their work was up to standards, which would at least keep their customers off of the long list of parties directly injured by their actions.

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Posted in Business, fraud | 1 Comment »

Cool tools

Thursday, February 28th, 2008

From time to time, we like to share a mixed bag of useful tools ranging from health and safety resources to productivity enhancers. Here are our latest finds:
Compliance – State labor legislation enacted in 2007 – the Monthly Labor Review’s 29-page PDF offers a summary of major labor changes on a state-by-state basis, including minimum wage, immigration initiatives, child labor, worker privacy, and many other legal matters.
Trucking – Safe Stat is a safety resource for trucking, transportation and fleet safety. It’s a Department of Transportation site that includes such features as SafeStat, Crash Profile, Program Measures, and Current Analysis Results.
California – PD Rater bills itself as “a free benefits calculator for California.
Georgia – Georgia Tech’s OSHA 21D Consultation Program provides a free, confidential, on-site consultation service for small companies (fewer than 500 employees) in Georgia that need assistance in occupational safety and health.
Spanish – Georgia Tech’s OSH program also offers construction safety information in Spanish: Seguridad en la Construcción. The program includes posters, fliers and PowerPoint presentations. Other Spanish safety programs are also available.
Annoyances – Do you ever make a quick call and find yourself stuck in a nightmare automated loop and you can’t access the service you called for? Grrr. Here are two services that might help. Get Human is a company-specific database of phone numbers that will bypass the robots and get you directly to a human customer service rep. Sometimes they provide a direct number and in other cases, they give you the magic formula code numbers that will get you through. I’ve used this service a few times and it works. Someone also recently pointed me to an alternative service along the same lines, except it will do most of the work for you. Bringo! allows you to choose a company that you’d like to call from a list, you enter your number, and Bringo will call you back and connect you after they get through the phone tree and reach a human.
Travel productivity – If you travel a lot for work, FlightStats might be a lifesaver. The site allows you to track lights in real time, check on airport delays and wait time, and a links to a variety of other flight-related tools.
Search – Google has more search tools and web tools than you probably realized, some tucked away in various corners of Google that you may not have occasion to visit. Simply Google lets you access all Google’s tools one page without having to poke around to find them.

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Posted in Tools & Resources | 1 Comment »