The “Real” Price of Nails and Blueberries for Workers

Last Sunday, The New York Times uncovered how consumers can unknowingly play a part in wage theft of exploited workers. Reporter Sarah Maslin Nir was having her nails done one day and asked the salon worker what her schedule is like. The manicurists stated that she works 24 hours a day, with naps, 6 days a week and not paid minimum wage. Maslin’s research uncovered that the price of nails in New York City was far less than the national average and began to connect the dots between exploited immigrants and the real price of a manicure.

Federal Law requires that employees be paid minimum wage[1] for all hours worked.[2] However, sometimes employers pay employees using more elaborate forms such as a “piece rate” or a “salary”. This can lead to issues for employees where the “piece rate” falls below the state or federal minimum wage. For example, overtime is calculated at time-and-a-half the “regular rate”. The regular rate must include all compensation, other than overtime compensation. See: Hisle v. Todd Pac. Shipyards, 151 Wn.2d 853, 862-63, 93 P.3d 108 (2004). This is then divided by the total hours worked during the workweek, so that the pay can be expressed as an hourly rate on which the 50% overtime premium can be calculated. Alternatively, employees can be paid a “salary”, but when divided by the number of hours the employee works and the per hour rate falls below the minimum wage, an illegal practice occurs.

The New York Times' article highlights how the price of many consumer goods or services do not reflect the real price of the good or service. For example, the Washington Supreme Court is likely to issue their ruling on if or how fruit pickers in Eastern Washington should be paid for rest breaks. Washington’s law requires a 10 minute rest break for each four hours worked under WAC 296-126-092(4), however Sakuma Farms employees paid per basket or bushel complain of never receiving pay for their rest. A new ruling that mandates this pay may have a financial impact to farmers and consumers alike, where the price of blueberries rises to the real price.

[1] The 2015 Federal Minimum Wage is $7.25.

[2] “Work” is not defined by the Washington Minimum Wage Act or the Fair Labor Standards Act, and is defined through case law as that which is pursued predominantly for the employer’s benefit, even though it confers a benefit on the employee. See, e.g.: Tennessee Coal, Iron & Railroad Co. v. Muscoda Local 123, 321 U.S. 590, 598, 64 S. Ct. 698 (1944) (defining work as “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business”).

Paseo, The Workers, and The Sandwich Caught In-Between

Yesterday, hungry customers of beloved Paseo Restaurant in Seattle were met with a simple sign on restaurant doors reading

“Due to unfortunate circumstances, we are closing our doors. We appreciate all the support and loyalty you have shown us over the years. We will miss you. Thank you, The Paseo Crew.”

Paseo’s two restaurants in Fremont and Ballard, serving its famous cuban sandwich, have received national acclaim for its cheap eats cuisine and is a favorite among Seattleites.

However, local media, including the Puget Sound Business Journal, The Seattle Times, and The Stranger have reported on the possible reasons for the closing, namely, a lawsuit filed by four Paseo workers for unpaid overtime, rest-break violations, and alleged racial discrimination on September 14, 2014 in King County Superior Court (No. 14-2-24553-0 SEA). The complaint mainly alleges that employees were paid straight time wages for hours worked over 40 hours and not paid the additional 50% premium amounting to time-and-a-half. Non-exempt employees working over 40 hours per week, generally must be paid time-and-a-half their hourly rate under RCW 49.46.130.

As an attorney who regularly represents employees failing to receive wages and denied rest breaks inconsistent with the Washington Minimum Wage Act, Industrial Welfare Act and Federal Labor Standards Act, the Paseo workers’ claims, if true, are not uncommon in the restaurant industry.[1]

Workers who allege unpaid wages or denied rest breaks may file a claim at the Department of Labor & Industries or hire a private attorney. The "Dept. of L&I" may issue penalties and pressure businesses with threats to their licenses while private attorneys may seek recovery of the wages through the court system. Attorneys generally work on a contingency fee basis or recover attorneys’ fees from the other side if successful. This allows for low-wage workers to seek the services of a private attorney without the expense of hiring a lawyer by the hour.

Seattle has stepped-up efforts to address wage theft concerns by proposing new minimum-wage investigators in the Mayor’s new budget. The City of Tacoma is also making efforts to address wage theft by holding a Wage Theft Workshop for employees on November 20, 2014. For more information about the seminar, visit the City of Tacoma Human Rights Commission.

[1] See As Bad You Think It is, It’s Worse: Wage Theft Comes to America by Les Leopold published in the HUFFINGTON POST on November 11, 2014.

Sorry Kid, No Overtime for Movie Projectionists

Last week, the #1 article from Sunday's edition of The New York Times was an Op-Ed piece highlighting the antiquated Federal Labor Laws that exclude millions of workers from receiving potential overtime.

Movie Projectionists are excluded from overtime under RCW 49.46.130“Sorry kid,” movie projectionists are excluded from overtime under RCW 49.46.130

Under Federal law, employees holding perceived white-collar positions like supervisor, manager, even vice president may be exempt from overtime requirements, even though their gross hourly rate is less than $12 an hour. Even in Washington State, a forum recognized for its strong labor laws, there contains noted exceptions for “administrative” and “executive” positions. As a result, an hourly manager at McDonald's may not be entitled to overtime and other protections under the Washington State Minimum Wage Act “MWA”. Parallel exclusions under the Federal Labor Standards Act (“FLSA”) include country elevator workers, newspaper delivery persons, sugar processing employees, and radio station employees. Yes, even movie projectionists are exempt from the 40-hour overtime requirements. These and other provisions of the WMA are ripe to be updated to reflect the dramatic changes to today’s workforce.