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

How Raising the Minimum Wage Can Impact Workers

April 23, 2015-2015 has been marked by political and media debate over the relative benefits and pitfalls of significant raises in the current minimum wage law.  While politicians on the Federal and state level propose and debate legislation on this important topic many major corporate employers have begun to undertake voluntary increases, ranging from negligible to substantial.  As 2015 proceeds the outcome of this legislation, these voluntary increases, and their economic impact will continue to be an issue of national discussion and analysis on both sides of the argument.

Dave Jamieson, of the Huffington Post, wrote a thoughtful article entitled “How Raising The Minimum Wage To $15 Changed These Workers’ Lives” which considers one position on the impact of raising the minimum wage for workers:

SEATAC, Wash. — In late 2013, voters in this airport town outside Seattle narrowly approved a groundbreaking measure setting a minimum wage of $15 per hour for certain workers. When the new law went into effect last year, Sammi Babakrkhil got a whopping 57 percent raise.

A valet attendant and shuttle driver at a parking company called MasterPark, Babakrkhil saw his base wage jump from $9.55 per hour, before tips, up to $15. Having scraped by in America since immigrating from Afghanistan 11 years ago, he suddenly faced the pleasant predicament as his co-workers: What to do with the windfall?

To read the remainder of the article: http://www.huffingtonpost.com/2015/04/22/life-on-a-15-minimum-wage_n_7107792.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications

Domino’s Pizza Latest Franchise To Settle Wage Claims

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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

NY Workers Have The Worst Commute in the Nation

Photo by Feelart  Stock photo - Image ID: 100219097
Photo by Feelart
Stock photo – Image ID: 100219097

March 19, 2015-(From The Gothamist) We already had an inkling that commuting in NYC was probably a bit worse than in other cities, but a new study really seals the deal. Comptroller Scott Stringer has released a study comparing New Yorkers’ commuting times to 29 other major America cities, only to find that we have the worst working week commute in the country by far. As Elvis Costello once said, I know it don’t thrill you, I hope it don’t kill you.

Read the entire story at: http://gothamist.com/2015/03/18/ny_commute.php

Papa John’s Drivers Win Wage Claims Against Franchisee

(Huffington Post)
(Huffington Post)

March 12, 2014–  When customers of Papa John’s Pizza Franchise, in New York City, were charged a mandatory $1.50 “service fee” they were, falsely, led to believe this was a tip for the delivery driver; however, it was kept, entirely, by the franchisee employer.  At least, this was among the allegations of the New York State Attorney General when he filed an employment lawsuit against the owner of five Papa John’s locations last year.

Last week, a New York State Supreme Court Judge agreed with the Attorney General when she ordered Papa John’s to pay, up to, six years in back wages, overtime, interest, and damages to these delivery drivers.  The court found that, in addition to keeping the “service charges”, the Defendant had utilized the delivery drivers to do numerous employee related tasks during their down time and, therefore, should have been compensated as employees. The court indicated that the tasks assigned were outside of the purview of what a delivery driver is expected to do.  The compensation and damage award is expected to exceed the sum of $2 million.

While the franchisee in this case has indicated an inability to satisfy the judgment, the drivers’ lawyers are considering whether the law will allow the franchisor, Papa John’s Corporate, to be held liable for the actions of the franchisee.  Last year similar labor cases held the McDonald’s Corporate liable for certain, egregious employment actions of their franchisees.

Cases like this will, undoubtedly, have both store owners and Corporate Franchisors examining their daily, routine labor practices with an eye on the possibility of future litigation.

To read more see: http://rhrealitycheck.org/article/2015/02/09/papa-johns-ordered-pay-almost-800000-wage-theft-case/

10 Companies That Have Vowed To Raise Their Minimum Wage

(SAUL LOEB/AFP/Getty Images)
(SAUL LOEB/AFP/Getty Images)

March 5, 2015– As Congress and many State legislatures are busy debating the merits of increases in the minimum wage for working families, at least 10 major corporate employers have committed to voluntarily raise their employees’ baseline pay from the Federal minimum standard.  Some skeptics might argue that this commitment stems from large scale protests by employees that are working full time jobs but are still unable to survive economically without the aid of public assistance.

The companies, however, have expressed the desire to improve their customer experience through making employees feel more invested in the corporate culture and the success of the organization as a whole.  They see wage empowerment as a tool to achieving that goal.

Regardless of the reasons behind the decision, the impact will be to increase the wages, and discretionary income, of a significant number of U.S. workers because of the sizable market share of each of the companies involved.

The companies include:

1.  Walmart

2.  T.J. Maxx

3.  Starbucks

4.  Ikea

5.  Gap, Inc.

6.  Costco

7.  In-N-Out Burger

8.  Shake Shack

9.  Ben N. Jerry’s

10. Whole Foods

 

To read more please visit: http://www.huffingtonpost.com/2015/02/26/companies-minimum-wage_n_6754070.html

First Analysis of Minimum Wage Increases Show Economic Promise

February 19, 2015–  Much of the debate surrounding an increase in the Minimum Wage is whether, or not, it will positively impact the U.S. economy. The initial analysis of the impact of the increases in over 20 states, which was written about in this column last month*, appears to indicate it has had a positive impact on the overall economic picture, albeit small.

Economists reported an, overall, increase in Labor force wages by .045%, in January, partially due to the substantial commitment of a number of states to these hourly wage increases. Morgan Stanley reported that 1.5% of the workforce was impacted by the increases in 21 states.  While this percentage is, actually, substantial it did not have a greater positive result on the economy because the increases in wages, themselves, were not substantial enough to have an impact when spread out over the entire wage pool.

Further commentary by leading economists seems to indicate that the economy was also helped by a continued increase in the number of laborers in the workforce. The Department of Labor reported the biggest three (3) month increase in 17 years, possibly, ending a trend towards months of alternating progress and set backs. There were no indications, whatsoever, that in the markets where wages were increased that the increases in hourly wage lead to layoffs, contractions, decreased profitability, or corporate re-locations as compared to jurisdictions with lower hourly wages.

There does seem to be a building forward momentum in the economy and the job sector. This increase in opportunities will continue to thin the unemployment ranks and should have a natural inclination to raise wages in the marketplace as competition heats up. The lurking danger is that as new higher paying Managerial opportunities are created they will have the tendency to demonstrate net increases in the wage pool figures and these increases may be used by opponents of mandated minimum wage increases as justification that such legislation is not needed.

What is needed as the economy continues to evolve and emerge from the Great Recession is an isolated, detailed analysis of workers and wages at the minimum wage level. By applying this analysis the most needy sectors of the workforce will not suffer from having their stagnation masked by members of the workforce on the more affluent segment of the labor force.

Yet to see an increase in your pay rate after the minimum wage increase? If you are making less than the state minimum wage in New York, contact the wage attorneys at Neil H. Greenberg and Associates for a consultation at 866-546-4752.

*To view the article written in this column last month, click here.

21 States Raise The Minimum Wage Above the Federal

January 8, 2014– The start of 2015 marked the commencement of an unprecedented number of U.S. states rolling out increases in their state minimum wage laws.   21 states in total, plus the addition of the District of Columbia, began the New Year with increases in the minimum wage that were the result of referendums of the November’s mid term elections, and state legislation.   All of these jurisdictions exceeded the Federal Standard of $7.25 per hour, which has been in effect since 2009.   While the Obama Administration has not been able to accomplish a national increase in the wage standard, these multi-state increases bring the total number of states whose minimum wage figure exceeds the Federal Government’s to 29, indicating a majority of jurisdictions do find the current Federal standard to be out of date.   While these states may agree that the Federal standard is out dated they do not have a uniform approach to remedying the issue, with a disparity of $2.75 per hour between the lowest and highest of the new state standards.

Below is a list of the States with January 1, 2015 minimum wage increases.

STATE 2014 WAGE 2015 WAGE
Alaska $7.75 $8.75
Arizona $7.90 $8.04
Arkansas $6.25 $7.75
Colorado $8.00 $8.23
Connecticut $8.70 $9.15
Florida $7.93 $8.05
Hawaii $7.25 $7.75
Maryland $7.25 $8.00
Massachusetts $8.00 $9.00
Missouri $7.50 $7.65
Montana $7.90 $8.05
Nebraska $7.25 $8.00
New Jersey $8.25 $8.38
New York $8.00 $8.75
Ohio $7.25 $8.10
Oregon $9.10 $9.25
Rhode Island $8.00 $9.00
South Dakota $7.25 $8.50
Vermont $8.73 $9.15
Washington $8.05 $9.47
West Virginia $7.25 $8.00
Washington D.C. $8.50 $10.50 (JULY 2015)

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. 

FedEx Ground Drivers-Employees or Independent Contractors

November 13, 2014–  “Five days a week for 10 years, Agostino Scalercio left his house before 6 a.m., drove to a depot to pick up a truck, and worked a 10-hour shift delivering packages in San Diego. He first worked for Roadway Package System, a national delivery company whose founders included former United Parcel Service (UPS) managers, and continued driving trucks when FedEx (FDX) bought RPS in 1998. FedEx Ground assigned Scalercio a service area. The company, he says, had strict standards about delivery times, the drivers’ grooming, truck maintenance, and deadlines for handing in paperwork, and deducted money from his pay to cover the cost of his uniform, truck washings, and the scanner used to log shipments……”

(For the rest of Josh Eldelson’s article from BusinessWeek.com click the link below.)

 

http://www.businessweek.com/articles/2014-10-16/fedex-ground-says-its-drivers-arent-employees-dot-the-courts-will-decide