Ikea’s Voluntary Pay Raise Experiment Deemed a Success

This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)
This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)

June  25, 2015– In March of 2015 this forum reported that regardless of the contentious minimum wage battles that have been plaguing the City, State, and Federal governments this year that some major corporate employers were voluntarily implementing pay increases for their hourly workers. (http://newyorkovertimelaw.com/blog/10-companies-that-have-vowed-to-raise-their-minimum-wage/)  Ikea, the furniture giant,  was one of the employers on that list.  The preliminary results of their voluntary wage experiment have been examined and what they reveal is dramatic and enlightening.

Ikea’s Chief Financial Officer, Rob Olson, has announced that as a result of the positive consequences of their voluntary wage increases that they intend to implement a second round of such wage hikes.   Ikea’s pay increase structure was based upon the relative cost of living in the various jurisdictions where it maintained stores.  Stores where the cost of living was the highest implemented more aggressive increases, creating greater financial parity among its U.S. Employees.

Olson made the announcement after summarizing what Ikea saw as the noticeable benefits to their company following the  implementation of the increase.   The first was a dramatic decrease in employee turnover from prior to the increase.  This factor alone reduced the company’s spending on the recruitment and training of new employees, whereby, balancing the cost increases of higher salaries.  Perhaps less tangible but, maybe, more significant was what Olson cited as the ability to recruit more qualified candidates for open positions.   The increase resulted in a noticeable increase in the hiring of more qualified applicants, which resulted in better employees, according to Olson.

So, while others debate the positive and negative consequences of wage increases and their impact on corporate employers Ikea seems to have settled the question as to whether major employers can sustain the impact of wage increases for their lowest earners.  They, clearly, can.

To view the entire article: http://www.huffingtonpost.com/2015/06/24/ikea-minimum-wage_n_7648804.html

The Minimum Wage Battle Heats Up In NY

Credit Chang W. Lee/The New York Times
Credit Chang W. Lee/The New York Times

June 18, 2015– The Minimum wage battle heated up this week in New York as Fast Food workers filled an auditorium on New York University’s campus to testify before a panel appointed by Governor Andrew Cuomo to examine the wage issue.  This hearing comes on the heals of last week’s historic increase in Los Angeles to $15 per hour for their minimum wage. ( See http://newyorkovertimelaw.com/blog/los-angeles-becomes-largest-city-to-enact-15-wage-law/)

At the hearing more than 30 Fast Food and other workers testified about their inability to survive, live, and afford housing on the wages they earn under the current economic scheme.   They, boldly, are seeking an increase from $8.75 per hour to $15 per hour in order to offset the economic disparity between their wages and their cost of living.

NYC’s Mayor, Bill De Blasio, and Governor Andrew Cuomo have been vocal advocates of this historic increase for the 180,000 Fast Food workers residing and working in New York State.  Despite the opposition of major employers over the alleged adverse economic impact of these significant wage changes it is expected that increases will be announced shortly.  The Los Angeles increase seems to have been the momentum shift these East Coast workers were looking for.

To read the entire NY Times Article:

http://www.nytimes.com/2015/06/16/nyregion/board-hears-support-for-raising-food-workers-minimum-wage.html?_r=1

Los Angeles Becomes Largest City to Enact $15 Wage Law

“Los Angeles - Feb 9, 2014: View Of Hollywood Boulevard In Sunset” by David Castillo Dominici
“Los Angeles – Feb 9, 2014: View Of Hollywood Boulevard In Sunset” by David Castillo Dominici

June 11, 2015-While the nation debates the issue and large companies promise some movement on their minimum wage floor, the City of Los Angeles has acted, and acted swiftly.   Wednesday night, by an overwhelming majority, the City Council voted to increase the City minimum wage to $15 per hour.  While the measure still needs to be signed into law by Los Angeles mayor, Eric Garcetti, he has already indicated that he will do so without hesitation.

This increase makes the minimum wage in Los Angeles double the Federal Standard and on parity with only a few jurisdictions.   The size and visibility of the city make the increase historic.  Mayor Garcetti and Mayor De Blasio of New York City have have both been vocal advocates of this change, yet, New York City’s leader has not managed to garner enough support to accomplish this goal.   It remains to be seen if this change on the West Coast will prompt a similar response in the East.

While labor advocates have applauded the action, many large employers have renounced it as crippling to their profitability during a time when the economy is still fragile.  Overtures are already being made to engage in massive lay-offs or corporate relocations.  The impact on these employers may not be as significant as these companies would have the public believe as the increase phases in over the course of several years, with provisions to extend the commencement time for smaller employers.

While the impact of the increase is being debated labor advocates and businesses will be keenly focused on signs of the impact on the Los Angeles economy and how it relates to the rest of the national employment picture.

To read the entire story:

http://americasmarkets.usatoday.com/2015/06/10/10-an-hour-minimum-wage-passed-in-la/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=usatodaycommoney-topstories

McDonald’s Workers Stage Protests In Spite of Voluntary Pay Increases

The center of the wage controversy
The center of the wage controversy

May 7, 2015–  Earlier this year McDonald’s Corporation announced it would be voluntarily raising its base pay to $9.90 an hour.   This figure exceeds the current Federal and State minimum wage requirements.  While the fast food giant’s compensation also exceeds the base pay for numbers of large employers throughout the United States it is far below the increase sought by a vocal band of fast food workers that call themselves Fight For 15.

Fight For 15 is an emerging band of increasingly organized fast food workers seeking a base pay of $15 an hour as their minimum wage.  These workers make it clear that it is more than a matter of principle for them.   It is economics.   The group, through its video and literary campaign, have spotlighted full-time employees with several years of employment with McDonald’s, and similarly situated companies, that are unable to meet the most basic of household expenses.   Many of these full-time employees are on government assistance because their full-time pay does not exceed the established poverty line.   Fight For 15 is looking to dispel the notion that being on government assistance and lacking work ethic are synonymous concepts.  They argue they are just being undervalued and underpaid.

McDonald’s workers have announced their intention to stage a protest at the May 21st Annual Shareholder’s meeting to highlight the economic plight of the workers.  They intend to present a petition signed by, over, 1 million Americans calling for the pay raises they are seeking.  This would not be the first such protest by the group.

Meanwhile, McDonald’s is in the midst of increasing economic pressure from rising food costs, diminishing sales, and competition.  Announcements have been made to close a number of locations and to undergo a revitalization of the company into a more “progressive” burger company.  New CEO Steve Easterbrook has made verbal commitments to address training, pay, and benefits on an ongoing basis; however, with 420,000 workers nationwide he has been unwilling to commit to a, more than, $6 per hour increase per worker.  The economic impact of this dramatic increase on the company is unclear.

Workers and employers across the country are carefully watching the McDonald’s saga unfold. The impact of the changes, or resistance thereto, for such a large employer and industry leader will likely resonate far beyond the purview of the Golden Arches.

 

Domino’s Pizza Latest Franchise To Settle Wage Claims

images

April 15, 2015– Five owners of a total of 29 Domino’s Pizza stores across New York State have agreed to pay a combined $970,000 in restitution to workers to settle labor violation complaints, Attorney General  Scheiderman’s office reported Tuesday.

The violations, in general, involved minimum wage and tip rules and allegations that the subject stores failed to properly reimburse delivery workers who used their own cars or bicycles for deliveries, according to the state’s official news release

The settlements follow similar cases last year involving another 26 stores statewide.

From the Official Press Release:  NEW YORK – Attorney General Eric T. Schneiderman today announced settlements totaling $970,000 with four current Domino’s Pizza franchisees, who together own 29 stores across New York State, as well as with one former franchisee who owned 6 stores. With stores located in Cortland, Dutchess, Erie, Genesee, Monroe, Nassau, New York, Onondaga, Ontario, Orange, Rockland, Suffolk, and Westchester counties, the franchisees admitted to a number of labor violations, including minimum wage, overtime or other basic labor law protections. In light of today’s agreements – which follow similar settlements last year with the owners of 26 other Domino’s stores statewide – Attorney General Schneiderman also called on the Domino’s Pizza corporation and Chief Executive Officer Patrick Doyle to exercise increased oversight of Domino’s franchisees’ pay practices.

For the entire transcript visit: http://www.ag.ny.gov/press-release/ag-schneiderman-announces-settlements-five-domino’s-pizza-franchisees-violating

Pregnant Workers Win Supreme Court Victory

Young Woman Pregnant Sitting On Arm Chairs In Home Living Room W Stock Photo Photo by khunaspix.  Image ID: 100253535
Young Woman Pregnant Sitting On Arm Chairs In Home Living Room
Photo by khunaspix.
Image ID: 100253535

March 26, 2015– WASHINGTON — In a victory for pregnant women in the workplace, the Supreme Court ruled Wednesday in favor of a worker who sued shipping giant UPS for pregnancy discrimination, sending her lawsuit back to a lower court where she had previously lost.

The case, Young v. United Parcel Service, hinged on whether or not UPS was justified in putting Peggy Young on unpaid leave after she became pregnant, even though other workers were commonly offered “light duty” for on-the-job injuries or to satisfy requirements under the American with Disabilities Act. The justices ruled 6-3 in favor of keeping Young’s lawsuit alive, with Chief Justice John Roberts and Justice Samuel Alito joining the traditionally liberal members of the court….

(Reposted from The Huffington Post 3/25/2015)

http://www.huffingtonpost.com/2015/03/25/supreme-court-ups-pregancy_n_6940752.html?1427304988

Pres. Obama and Gov. Cuomo Fight to Raise Wages

January 22, 2015– In Tuesday Night’s State of the Union address, President Obama made increasing the Federal Minimum Wage a central theme of his economic platform. While this proposal is not new to the President’s agenda, he used a recovering economy and the signs of an increasing Presidential public approval rating to bolster his opportunity to be more vocal on the issue.

While individual states always have the ability to deviate more favorably to employees from the Federal government’s wage standard, the President highlighted the moral responsibility of the Federal Government in setting a heightened National baseline on wages.  He was unequivocal in the expression of his belief that wage increases are essential to improving the fabric of the American workplace and the life of the American worker.

To a Republican controlled Congress, the President challenged “To everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full time and support a family on less that $15,000 a year, go try it. If not, vote to give millions of the hardest working people in America a raise.” While this dramatic challenge may have resonated with the American people, it may be more rhetoric than policy as the, now Republican majority in the Congress, has vehemently refused to take up any measure increasing the Minimum Wage above the 2009 rate of $7.25 per hour.

The President also focused on other workplace related issues, which he was looking for Congress to take a leadership role in establishing national policy on, including paid sick leave, paternity leave, and universal day care. Once again, under the current make-up of Congress, passage of such legislation is also unlikely.

Meanwhile, in New York State, Governor Andrew Cuomo proposed a significant increase in the state’s current $8.75 per hour minimum wage to $10.50 per hour by 2016, outside of NYC. In a surprising change of position from his stance of late last year, the Governor also proposed a NYC differential of $1.00 per hour in NYC’s minimum wage, or $11.50 per hour by 2016. These increases would make NYC and NYS among the highest minimum wage jurisdictions in the country. Earlier this month, 21 other states implemented minimum wages hikes.

(see http://newyorkovertimelaw.com/blog/21-states-raise-minimum-wage-federal/)

In making his proposal the Governor focused less on the obligation of NYS citizens to support each other, or on the moral obligations of the NYS legislature, but more on New York keeping pace with the healthier state of the economy, “The world has changed. The market is strong and I believe the market, this market, at this rate of strength, can deal with this.” While the proposed wage promulgated by the Governor is far below his original proposal of $13 per hour, it is also unlikely to see clear passage with a New York State Senate in equal opposition as the US. Congress to such a measure.

While a substantial increases in the Federal and New York State minimum wage seem unlikely under the current political climate, the issue is of significant and consequential concern to a financially devastated American workforce. What it will take to transform this powerful political rhetoric into actual implemented legislation is unclear; however, it seems unlikely that these Executive standard bearers are, summarily, willing to concede the issue to their Republican opposition.

Minimum Wage Freeze Cost American Workers $8.64 Trillion Since 2009

December 4, 2014–  Now that the mid-term elections have come and gone without any action being taken to raise the Federal minimum wage, it is unclear when, or if, any National legislation will be forthcoming. Throughout the current election season populist candidates were touting, seemingly revolutionary increases to the Federal minimum wage, with numbers, as high as, $15 per hour being debated.  Surprisingly, many of these pro-labor candidates were defeated in their election, or re-election, bids for office leaving the probability of immediate action abandoned. The complexion of the incoming Congress has already indicated its early opposition to major changes in this area.

So how does this inaction on the Federal Minimum wage issue impact the American workforce. According to the Center for Economic Policy and Research: “Congressional failure to raise the minimum wage is costing America’s working families and the economy overall. With millions of workers losing billions in pay since 2009 — and hundreds of billions of dollars since the high water mark for the minimum wage in 1968 — it’s no wonder families are falling farther behind and income inequality has exploded even as corporate profits and CEO compensation soar.”

The figure calculated by the CEPR, as of last Monday, is a staggering $6.84 trillion dollar in cumulative losses in wages to the American worker since 2009, as a result of the failure to increase the minimum wage.   Advocates for the increase argue that no legislative gridlock has damaged American workers more, and, possibly, the Amercan Economy.

While opponents of dramatic wage increases sound the alarms of corporate closures, outsourcing, and, general, economic calamity as a result of doubling the minimum wage they have failed to make, even, the slightest movement towards having this figure even, remotely, keep up with the cost of living. Meanwhile, as all indications are that certain segments of the economy are poised for a fiscal rebound from the depths of the Great Recession, the unemployed and underemployed are finding that having a job and working the maximum number of hours they are physically able to withstand is doing little to improve their chances at capturing even a glimpse of the American Dream that their parents told them so much about.

While relative inflation has been low during the period of time from 2009 to the present, one need only compare the isolated statistic of Food Inflation to the Federal minimum wage during this period to see the true impact on the American household. While wages have remained flat, according the US Department of Labor Statistics, Food Inflation has increased at a rate of 4.25% per year from 2009-2014. Combine this with dramatic, recent cuts in the Federal Food Assistance programs and it paints a picture of an underemployed, overworked, and hungry American Family.

If Ghandi was right, and “The True Measure of Any Society can found in how it treats its most vulnerable members” what does the U.S’s national lack of concern over the essential financial solvency of its most vulnerable workers say about it as a society?

 

If you, or someone you know has suffered from minimum wage issues, it is important that they immediately contact an experienced Minimum Wage Attorney.  A qualified attorney can help employees stand up for their rights and recover compensation for their lost wages. 

Amazon Workers Fight For Fair Pay?

October 16, 2014-Most of the American public is familiar with the internet marketplace known as Amazon.com.  What most people didn’t know until last week was that Amazon.com employees are required to pass through mandatory security checkpoints, after their shifts.  This mandatory protocol often delays their departure from work, by an average of,  30 minutes per day.  This procedure was put into place due to significant company financial losses, which Amazon alleges, is the result of, out of control, employee theft.  Employees, as a matter of practice, clock out from work, daily, and then line up to pass through secure check points similar to those utilized at the major airports throughout the country.

Now those same employees have filed a series of lawsuits against Amazon, claiming that the time spent administering these security procedures should be considered part of their employment. Furthermore, they are demanding they be paid up until the point that they have completed their security inspections.  They have alleged that Amazon has violated Labor Laws by requiring them to adhere to these practices, without the benefit of pay.  They are seeking back pay, as well as a change in policy.  Amazon has fired back, vigorously defending the suit on several legal grounds, but more significantly, highlighting the irony that employee behavior, as a class, necessitated the costly procedures be implemented in the first place.

At the heart of the matter will be a legal interpretation of the 1947 amendment to the Fair Labor Standards Act.  The U.S. Supreme Court will look at the facts, in question, and decide whether the security checkpoints set up by Amazon, and other major companies dealing with employee theft, constitute “integral and indispensable” components of what the workers were paid, by the employer, to do.  The classic example cited by the employees is that employers, such as butchers, are required, by law, to pay for the time their employees spend sharpening their tools, as integral to their job.   They liken the checkpoint requirement to this scenario.  In contrast, employers are not legally required to pay employees for their travel time to and from work.  Amazon relies on this premise in defense of its position that the security checkpoint is akin to the ride home.

Whose interpretation is correct?  The parties, and the public, will soon discover.  While this case involves one company, Amazon.com, the results may significant consequences on the finances of many U.S. companies.  The additional expense of increased base wages, plus the, potential, impact on overtime wages could lead to increased consumer prices, or a decrease in hiring, or, although, highly unlikely, a dismantling of the security checkpoints, entirely, as more cost prohibitive than the theft they are trying to eliminate.

If you, or someone you know, is the victim of wage violations or is owed back pay, please contact the New York Employment Attorneys at Neil H. Greenberg & Associates.  Our attorneys will help you to fight labor violations and get compensation for your work.  Call us today at 516-228-5100!

 

Raiders Cheer Minimum Wage Victory

September 11, 2014–  In June, 2014 this column spotlighted the NY Jets’ Cheerleaders’ lawsuit, filed against the Jets Team Franchise, seeking to have themselves declared team employees, entitling them to a payment of the state minimum wage rather than the, average, $3.77 per hour stipend they were, currently, earning.   This case was one of several filed, in State and Federal Courts, against NFL teams, in a league that generated $9 billion dollars of tax free income in 2013.  Now, the first in the series of those cases has settled in favor of the Cheerleaders. ( http://newyorkovertimelaw.com/blog/?p=22 )

The Oakland Raiderettes declared legal victory, last week, in a settlement in a California state court case against the Oakland Raiders.  As part of the settlement the team has agreed to classify the Cheerleaders as employees, and pay them minimum wage, expenses, as well as a settlement towards the wage arrears sought. (http://bigstory.ap.org/article/raiders-settle-cheerleader-lawsuit-125-m )

What will the impact of this settlement be on the other pending NFL cases?   Legally, the outcome of this case is non-binding on the other teams being sued; however, the expectation is that this settlement will pave the way for a broad ruling by the NFL itself, classifying all Cheerleaders as employees of the Teams they cheer for.  The irony is, win or lose,  the fees paid by the teams to the law firms defending the litigations will, likely, exceed the settlement awards to the Cheerleading Plaintiffs.

 

For more about minimum wage law in New York click here: http://newyorkovertimelaw.com/minimum-wage-law-firm-westbury-nassau-county-employment-attorney-ny.php