“Nickel And Dimed”: The Very Real Scourge Of Wage Theft
Last week, the owner of a chain of Papa John’s was ordered to pay $800,000 in back pay to workers he’d shortchanged by rounding down to the nearest hour on their time cards and failing to pay overtime properly. “I didn’t realize if you work 10 hours per day, you are supposed to pay overtime for two hours,” the owner, Emmanuel Onuaguluchi, told the New York Post.
A couple hours of overtime there may not seem like a lot of money, but those amounts could mean everything to workers struggling to get by on minimum wage and, as the judgment shows, it all adds up over the years. This latest judgment is part of a big push by New York’s attorney general, Eric Schneiderman, who has also sued local McDonald’s and Domino’s franchises.
Cases of wage theft—or, at least, the cases officials are pursuing—have been up in California and across the country, too, according to The New York Times. Business interests told the Times that politicians like Schneider are just pursuing these cases to curry favor with unions, but the unions aren’t really behind the legal actions.
If restaurants and other companies in the service industry—where workers are paid by the hour, have hours that change from week-to-week, and are especially vulnerable to wage theft—are complaining that the wage theft cases are coming from people who, in general, want to be paid more, they’re right. The fight for higher minimum wages across the country has highlighted the problems low-wage workers face in their workplaces, and wage theft is one of the most common ways they’re denied even the measly current minimum wage of $7.25 an hour.
Wage theft is old, but before now workers might have been too scared to complain or go to an attorney on their own. “I think one reason why it’s coming up more now is that it’s tied to a real organizing campaign where fast food workers are demanding and protesting,” says Tsedeye Gebreselassie, a senior staff attorney for the National Employment Law Project, which is not directly involved in any of these cases.
By law, companies have to pay their employees minimum wage, and overtime pay should kick in once an employee works past an eight-hour shift in a day. Five years ago, in a survey funded by the Russell Sage Foundation and conducted by researchers from the National Employment Law Project, UCLA, Cornell University, and the University of Illinois, Chicago, a quarter of low-wage employees reported they hadn’t been paid the minimum wage in the prior week, and three-quarters said they were denied overtime.
As someone who has spent the past three years reporting from low-income communities across the country and grew up in working-class family in a poor part of Arkansas, I hear stories of wage theft all the time. Onuaguluchi’s view about overtime is common—I’ve known people who have worked in fast-food restaurants and routinely pulled several double shifts in a week, but as long as their hours did not total more than 80 in a two-week pay period their bosses did not pay overtime.
I’ve also heard of bosses who don’t pay correctly, and paychecks come with hours missing. Those mistakes are harder for workers to figure out than you would think because they need to keep records on exactly when they worked and how many hours it was, and compare it to what their paychecks say when they arrive a week or two later. But at the end of the day, these cases are relatively easy to prove because records of time sheets will show how many hours each employee worked and whether they were paid properly. Rounding down, as Onuaguluchi did, would be evident.
Many stories about wage theft, though, offer more insidious examples that are harder to fight. I know of people who’ve had to run errands on behalf of their workplaces before they even show up for work, and are expected to arrive every morning with said errand completed. I know people who’ve had to clock out for breaks they can’t take. Sometimes, workers are expected to have a certain amount of work done before they clock in at the official start of their shifts, or are asked to or expected to finish a task once they’re already gone, according to their time sheets. It would be harder to tackle cases like that in court because these practices might not be codified or routine, but the basic idea is that bosses at companies like this don’t rank their employees’ time as valuable.
In fairness, the direct bosses like Onuaguluchi are often squeezed themselves. While three-quarters of these kinds of stores are owned by franchisees who own multiple units and are often making quite a profit, their profits rely on running their operations as cheaply as possible. The small-business man or woman who owns one or two might struggle to pay their employees properly, although I have little sympathy for those who break the law. That’s because franchise fees are expensive: even a franchise fee considered relatively affordable, like 7/11, takes $31,000 to start up. McDonald’s requires $45,000 and that the owners have $300,000 in cash or other funds available to them.
Companies like these also require other licensing fees to be paid, and sometimes franchisees even pay rent because the parent company owns the physical location of the store.
So, people like Schneiderman have promised to go after Papa John’s, and other big companies that franchise stores as well. What Papa John’s and their ilk say is that they’re not responsible for the ways their franchisees pay people. Yet they intensely manage their brands, which often includes monitoring time sheets that franchisees send in, quality control tests that could influence hiring and firing decisions, and other fine-grained aspects of their operations. Even more directly, attorneys could argue that these companies charge their franchisees so much in fees that they know, or should know, that the only way for them to make a profit is to shortchange their employees.
In July, the National Labor Relations Board ruled McDonald’s was a joint employer in a similar case, and that pay complaints could be made against them. If suits against the parent companies succeed, it might actually start to end the practice of robbing low-income workers of the little money they have. “At the end of the day, you want to recover the unpaid wages, but you also want to correct the behavior,” Gebreselassie says. “One of the best ways to do that is to reach to the corporate parent.”
By: Monica Potts, The Daily Beast, February 15, 2015
“Where Employees Are Treated With Contempt”: Obama Blasts Staples, And Reveals Larger Partisan Divide Over Workplace
Another big interview with President Obama came out today, this one from Buzzfeed, and this section, in which Obama slammed Staples for limiting employee hours, supposedly in response to Obamacare, is creating a bit of buzz:
BEN SMITH: If I can move on to the Affordable Care Act. We reported yesterday that the office supply store Staples is — I’m sure this is an issue you’ve heard about before — is telling its workers that it will fire them if they work more than 25 hours a week. A manager had told a worker we talked to that “Obama’s responsible for this policy,” and they’re putting these notices on the wall of their break room saying that. I wonder what you’d say to the CEO of Staples, Ronald Sargent, about that policy?
OBAMA: What I would say is that millions of people are benefiting from the Affordable Care Act. Satisfaction is high. The typical premium is less than 100 bucks.
SMITH: But this is a specific consequence…
OBAMA: No, I’m gonna answer the question. And that there is no reason for an employer who is not currently providing health care to their workers to discourage them from either getting health insurance on the job or being able to avail themselves of the Affordable Care Act. I haven’t looked at Staples stock lately or what the compensation of the CEO is, but I suspect that they could well afford to treat their workers favorably and give them some basic financial security, and if they can’t, then they should be willing to allow those workers to get the Affordable Care Act without cutting wages.
This is the same argument that I’ve made with respect to something like paid sick leave. We have 43 million Americans who, if they get sick or their child gets sick, are looking at either losing their paycheck or going to the job sick or leaving their child at home sick. It’s one thing when you’ve got a mom-and-pop store who can’t afford to provide paid sick leave or health insurance or minimum wage to workers — even though a large percentage of those small businesses do it because they know it’s the right thing to do — but when I hear large corporations that make billions of dollars in profits trying to blame our interest in providing health insurance as an excuse for cutting back workers’ wages, shame on them.
Obama obviously didn’t know any details of the Staples situation when he was asked the question, but Buzzfeed reported Monday that the company is becoming particularly aggressive in making sure its part-time workers don’t work more than 25 hours a week, now that an Affordable Care Act provision mandating that large companies offer health insurance to employees working over 30 hours is in effect. Staples says that the policy is years old and has nothing to do with health insurance; the employees Buzzfeed talked to say it’s being enforced with renewed vigor.
Regardless of those details, this is another example of the fundamental difference between the approach to workplace issues Obama is trying to move Democrats toward, and the ways that Republicans are pushing back. As I argued a few weeks ago when Obama raised the issue of paid sick leave — which the United States is alone among highly developed countries in not mandating — Republicans essentially want to help people get to the employer’s door, while Democrats want to go inside with the worker and help make the workplace more humane.
The Staples story illustrates the environment of so many contemporary American workplaces, where employees are treated with contempt and suspicion while being told how much they’re loved. The original Buzzfeed story contains a Staples memo threatening part-time employees with discipline up to termination if they clock in for more than 25 hours in a week. The memo ends with, “I appreciate and value you.” I’m sure that warmed the workers’ hearts.
There may be some part-time workers who find that in response to the ACA’s insurance mandate, their employers try to limit their hours in the way Staples is doing. That’s why Republicans want to change the mandate’s definition of full-time employment from 30 to 40 hours. But we should be clear about what would happen if Republicans got their way. Some number of people like those at Staples might be able to work a few more hours (though if Staples is telling the truth, it wouldn’t matter for their part-timers, because they’re adamant about keeping them below 25 hours regardless). But a much larger group — full-time hourly workers — would then be in danger of losing their health coverage.
Right now if a large company (remember, this provision only applies to large companies) wanted to cut a full-time employee’s hours so they wouldn’t have to offer her health insurance, they’d have to cut her all the way down from 40 to 29 hours, which in most cases just isn’t practical. But if the law’s definition of full-time work was 40 hours, they could cut her from 40 to 39 and be able to take away her health coverage, which would be a lot easier. One hopes that few companies would want to do that, and indeed, over nine out of ten large companies were already offering insurance to full-time workers even before the Affordable Care Act. But some would, and the number of employees at risk of losing their coverage would be much higher than it is under the current 30-hour definition.
The populist stance Obama is taking here is undoubtedly good politics; Republicans will try to say that they’re the ones on the side of the part-time workers, but voters generally understand that they’re always in favor of giving employers the power to treat employers however they wish. In any case, this kind of dispute is just one more reason why we should try to move away from a system where most people get insurance through their employers. If we did that, people wouldn’t have to rely on the generosity of their bosses, and we wouldn’t have to argue about who’s part-time and who’s full-time. And neither party has a particular stake in, or ideological commitment to, the employer-based insurance system; it’s an artifact of history. Moving beyond it would be a major change, and we all know by now that when it comes to their health coverage, people fear change. But it would be better for everybody.
By: Paul Waldman, Contributing Editor, The American Prospect; Contributor, The Plum Line, The Washington Post, February 11, 2015
“Corporations Are Artificial, Too”: Modern Corporate Capitalism Is Anything But Natural
One of the reasons it’s difficult for liberals to easily and effectively win arguments about economics with conservatives is that conservatives have a very simple mantra: let the natural forces of the market do their work. Government is seen as an interloper and distorter of Darwinian forces that would otherwise ultimately let all goods and services achieve their perfect prices with maximum efficiency.
There are a number of gigantic problems with that worldview, of course. The free market refuses to pay for a wide variety of crucial infrastructure items and investments in public health and safety; consumers are at an information and power disadvantage against unscrupulous companies; and human life and dignity are unacceptably cheap on the open market.
But there’s another key lie in the conservative “natural economy” story, which is that modern corporate capitalism is anything but natural. It’s an artificial system encoded arbitrarily into law and interpreted in a specific way that tends to give maximum advantage to executive and shareholders at the expense of society. Kent Greenfield examined right here at Washington Monthly one way in which that is true: the Dodge v. Ford case that explicitly denied corporations the right to engage in more socialistic practices and demanded that they only serve the bottom line for their shareholders. The corporate veil itself another artificial legal construct, as is the notion of corporate personhood.
Our society is built on rules and regulations, all of them socially and legally built out of artifice. That is just as equally true of business as it is of government.
By: David Atkins, Political Animal Blog, The Washington Monthly, January 24, 2015
“The Poorly Financed Causes Of Little People”: In Black Lives Matter Protest, Corporate Rights Trump Free Speech
Minnesotans protesting police violence and institutional racism could face “staggering” fees and criminal charges for a protest at Mall of America, with the City of Bloomington announcing plans to force organizers to pay for the mall’s lost revenue during the exercise of their free speech rights, highlighting important questions about free speech in an era of privatized public spaces.
“Youth leaders of color [are] under attack,” Black Lives Matter-Minnesota said in a statement. “It’s clear that the Bloomington City government, at the behest of one of the largest centers of commerce in the country, hopes to set a precedent that will stifle dissent and instill fear into young people of color and allies who refuse to watch their brothers and sisters get gunned down in the streets with no consequences.”
Around 3,000 people flooded the mall on Saturday, December 20, to sing carols and chants following police killings of unarmed African-American men like Eric Garner, Michael Brown, Tamir Rice, and Dontre Hamilton. The protests were peaceful, and some mall workers stepped outside of their businesses and raised their hands in support. Police closed around 80 stores during the two-and-a-half hour protests, and locked down several mall entrances.
Days after the action, Bloomington City Attorney Sandra Johnson announced that she will not only seek criminal trespass and unlawful assembly charges against the protesters, but will also seek to have them pay for the mall’s lost revenue and overtime for police officers–a cost that she says will be “staggering.”
Can the Mall of America prohibit the exercise of free speech and assembly on its premises? And can it pick-and-choose who it allows to assemble? Last year, for example, the Mall allowed around 7,000 people to gather in the same rotunda to honor a young white man who died of cancer.
The First Amendment protects against government suppression of speech, but not private responses to the exercise of free speech and expression. And the Mall of America is considered private property, despite receiving hundreds of millions in public subsidies since it was built, including an additional $250 million approved last year.
For decades, courts have struggled with how to protect free speech in public forums that have grown increasingly privatized.
Mall “Born of a Union with Government,” but Not a Public Space
In many communities, town squares and downtown business districts have largely been replaced by privately-owned shopping malls, particularly in suburban areas. In Bloomington, Minnesota, for example, there is no public space that offers the same level of visibility as a protest at the Mall of America–which is why protesters chose the location on December 20.
Even traditional public spaces like parks are increasingly owned by private entities, most famously in New York’s Zuccotti Park, where Occupy Wall Street was born, and where Occupiers faced eviction after the park’s owners changed the rules.
Mall of America’s status as a public space under the Minnesota state constitution was challenged in the 1990s by anti-fur activists who wanted to protest outside Macy’s. A Minnesota trial court initially found that, thanks to the Mall’s substantial public subsidies, the Mall of America was “born of a union with government” and could only impose reasonable time, place, and manner restrictions on protest.
The Minnesota Supreme Court, though, reversed the lower court in 1998 and declared that the state constitution’s protection of free speech “does not apply to a privately owned shopping center such as the Mall of America, although developed in part with public financing.”
Suburban Malls as Public Spaces?
Initially, however, the U.S. Supreme Court viewed privately-owned suburban shopping malls through the same lens as the public town squares they were replacing.
In 1968, in an opinion authored by Justice Thurgood Marshall, the Court held that suburban shopping malls were serving the same public function as a town square, and therefore should be subject to similar constitutional constraints.
“The shopping center premises are open to the public to the same extent that as the commercial center of a normal town,” Marshall wrote in the case, which involved the Logan Valley Mall in Pennsylvania. “So far as can be determined, the main distinction in practice between use by the public of the Logan Valley Mall and of any other business district … would be that those members of the general public who sought to use the mall premises in a manner contrary to the wishes of the [owners] could be prevented from so doing.”
Subsequent decisions, however, chipped away at that “public function” doctrine, most notably in a 1972 decision authored by Justice Louis Powell.
Powell, a former corporate lawyer who had authored the Powell Memo for the U.S. Chamber of Commerce the previous year, declared in the Lloyd Corp. v. Tanner decision that a mall does not “lose its private character merely because the public is generally invited to use it for designated purposes.”
A new opening for states to protect free speech in shopping malls emerged in the 1980 Pruneyard Shopping Center v. Robbins decision. In that case, the Court opened the door to states finding that their own constitutions protect free speech in shopping malls or other privately-owned public spaces. The California constitution’s broader free speech protections, for example, allow for protests and leafletting in that state’s malls.
Minnesota’s Supreme Court, though, came to a different outcome in that 1998 case involving the fur protesters. The state constitution, the justices declared, does not bar Mall of America’s owners from limiting the exercise of free speech on mall property, or choosing to allow some forms of speech but not others.
“The Poorly Financed Causes of Little People” Yield to Corporate Rights
In recent years, the First Amendment has undergone a revolution in the U.S. Supreme Court–in cases like Citizens United, Hobby Lobby, and McCutcheon–but largely in favor of expanding the “free speech rights” of corporations and the wealthy few, rather than protecting what Justice Hugo Black described in 1945 as “the poorly financed causes of little people.” When average Americans raise their voices in protest, they can still be muffled by corporate interests.
By: Brendan Fischer, The Center For Media And Democracy, December 26, 2014
“Our Democracy Is Dying”: For All Intents And Purposes, Our Government Is Merely The Handmaiden Of Corporations
In case anybody hasn’t noticed, democracy in America is dying now. This isn’t an overstatement; it’s a fact. Corporate interests dominate our politics so much at this point that our government, for all intents and purposes, is merely its handmaiden. Whatever Wall Street wants, Wall Street gets. Corporatism is the new order of the day. One political party stands for it; the other political party won’t stand against it.
The word inertia means the tendency of an object to move in whatever direction its been moving until and unless there’s the introduction of a counterforce, and the Democratic Party is simply not providing the necessary counterforce to the corporatist agenda so exalted by the Republicans. Such a possibility is undermined by Democrats with corporatist agendas of their own. Watch them trying to sideline Elizabeth Warren as I write this. It’s all gotten so terribly predictable.
Some people are pussyfooting around the word, but others are realizing it’s time to say it: we need a peaceful revolution in America. In the words of President John F. Kennedy, “Those who make peaceful revolution impossible make violent revolution inevitable.” The American people have simply got to stand up now. This isn’t the time for any of us to go mute – whether it’s those who feel there’s no point in saying anything, or those who feel there’s too big a risk in saying anything. And you know who you are.
The social revolution we need is comprised of two major categories: What we say No to, and what we say Yes to. In the American Revolution, with the Declaration of Independence we said no to what we would no longer accept (living under British rule). In ratifying the Constitution, we said yes to what we would do instead (form our own system of government). The template was genius then, and it’s genius now. Today, we need to say no to a situation in which our government is bought and paid for, and yes to a return to democracy. Nothing short of an historic, nothing namby-pamby-about-it, serious social movement will take us out of our free fall and set America back on the track to real liberty. Today, lobbyists – not the people – are in control. And that is not freedom.
The situation has shaken out – and thank you, Senators McConnell and Reid for adding to the disaster of Citizens United by upping the amount people can contribute to political parties; that really helps (not) – in such a way that nothing short of a Constitutional Amendment will stop the big money flowing into our political campaigns like poison into the veins of our democracy. The best bet now — given the resistance within both major parties to seriously taking down the dastardly “For Sale” sign posted on the front yard of our government — is for the people ourselves to call for a Constitutional Convention, state by state. And that’s what has started to happen.
If something inside you says, “That’s true,” then I hope you get active. We’re in serious straits now and things won’t get better by themselves. In denial about this? Go stand over there. Too cynical to think we can change things? Go stand over there. Too sedated to be upset yet? Go stand over there. An apologist for the system? Go stand over there. Ready to kick ass? Go to http://www.wolf-pac.com/ and express yourself big time. Work with that organization, or with any other you like. But this isn’t a time to sit on the sidelines. Our democracy is sick – it is really, really sick — and all of us are needed now to nourish it and make it well.
By: Marianne Williamson, The Blog, The Huffington Post, December 14, 2014
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