The number of workers taking their employers to court over unfair pay is skyrocketing.

Wage-and-hour lawsuits shot up 432 percent over the past 20 years, according to an analysis of data from the Federal Judicial Center by the law firm Sayfarth and Shaw. In just the last year, the number of wage-and-hour suits jumped 10 percent, the analysis found.

The law firm concludes the recent spike in lawsuits could be the result of the economy picking up steam, an increase in the number of lawyers looking to bring such cases and heightened awareness and sensitivity to wage and hour issues on the part of workers thanks to “social media.”

However, worker advocates paint a different picture. The boost in lawsuits over the past two decades indicates that workers have had to turn to the courts to ensure they’re paid fairly because the Department of Labor hasn’t had the resources to make sure employers are complying with the law, according to Cathy Ruckelshaus, the legal co-director for the National Employment Law Project.

Wage-and-hour suits involve a dispute over how much money a company owes an employee and generally fall into three categories, according to Think Progress: Hourly employees claiming they weren’t paid for all the hours they worked, salaried workers claiming they’re owed overtime and employees working for the tipped minimum wage claiming they didn’t make enough in tips to bring their pay to the minimum wage.

The economic downturn may also be partly to blame for the uptick in lawsuits recent years, as employers were able to squeeze more out of their workers, who were concerned with keeping their jobs in an environment of high unemployment. S&P 500 companies made an average of $420,000 per employee in 2011, a full ninth more than in 2007, according to an April 2012 report from the Wall Street Journal.

“When the recession first hit, employers felt even more emboldened to violate the law because there was high unemployment and we rely on workers to complain,” Ruckelshaus said.

Indeed, companies ranging from Bank of America, to Walmart to Taco Bell were hit with lawsuits claiming they owed employees money during the recession and recovery. Still, Ruckelshaus says the boost in lawsuits could be good news for workers because it sends a message to employers that they have to comply with the law or face the consequences.

“The ideal is that employers make decisions that don’t violate the law because they figure ‘we better not do this because we’re going to get caught,’” she said.

Posted in Wage & Hour | Comments Off

Enrollment in the federal health insurance marketplace climbed steadily in January, according to data released Wednesday by the Health and Human Services Department. In January, an additional 89,500 Texans selected a health plan on the marketplace created by the Affordable Care Act, the department said.

“Today’s enrollment figures are more proof that Texans are ready and willing to push past the barriers that Gov. [Rick] Perry has put in the way of the new healthcare law,” said Ginny Goldman, executive director of the Texas Organizing Project, which is assisting enrollment efforts.

As of Feb. 1, the total number of Texans who have enrolled in health plans jumped to 207,500 from 118,000 at the end of 2013. Nationwide, enrollment grew to 3.3 million, a 53 percent increase over the previous three months.

“These encouraging trends show that more Americans are enrolling every day, and finding quality, affordable coverage in the Marketplace,” Health and Human Services Secretary Kathleen Sebelius said in a statement.

President Barack Obama’s signature law requires most Texans to have health insurance by March 31. The state’s Republican-dominated Legislature, which staunchly opposes the law, declined to establish a state-based insurance marketplace, so the federal government set one up.

The Texas Department of Insurance also issued state regulations that added training and other requirements for “navigators” hired by recipients of federal grants to help people enroll in health coverage.

Texas has the nation’s highest rate of people without health insurance, at 24.6 percent, according to census data. About 48 million Americans — including more than 6 million Texans — were uninsured in 2011 and 2012.

California and New York, which established state insurance marketplaces, have enrolled 728,100 and 211,300 people, respectively. Florida, which has enrolled 296,900 people, is the only state participating in the federal marketplace with greater enrollment than Texas.

Local government officials and community-based organizations in Texas are working together to incorporate new rules, pool resources and educate uninsured residents on how to use the federal law.

Texas has been a priority state for enrollment efforts, said Julie Bataille, spokeswoman for the Centers for Medicaid and Medicare Services.

“A lot of the activities that we’re doing in Texas, in particular — understandably — are focused on reaching citizens who speak both English and Spanish,” she said.

John Davidson, a health policy analyst at the conservative Texas Public Policy Foundation, said enrollment is strikingly low, given the number of uninsured Texans.

“In a state with more than 6 million uninsured, you would expect more than 207,546 people would have bothered to sign up after four months of open enrollment,” he said in an email. “This suggests that many Texans do not think the exchange’s plans are all that good of a deal after all.”

In an Associated Press analysis of enrollment figures, Texas was rated subpar. AP reported that the state had met 53 percent of its goal.

But Phillip Martin, deputy director of the left-leaning Progress Texas, said it took Texas four years, from 2006 to 2010, to achieve a similar enrollment spike on its own — 232,000 children — in the Children’s Health Insurance Plan.

“In the past, it took years to see the kind of health coverage expansion in Texas we’ve seen in the last few months thanks to the Affordable Care Act,” he said in an email.

The federal data do not indicate how many of those who enrolled were previously uninsured or how many have paid premiums on health plans selected on the marketplace.

Instead, the department’s figures break down enrollment by gender, age, type of health plan selected and whether individuals received financial assistance.

In Texas, most of those who have enrolled, 56 percent, are female. Seventy-three percent of the 163,800 Texans who received financial assistance, or tax credits, to help pay premiums bought a middle-tier silver plan.

Meanwhile, 37 percent of the 43,600 who did not receive tax credits bought lower-tier bronze plans. Twenty-five percent bought a silver plan.

While critics have raised concerns that the greater number of women enrolling in plans could raise premiums for everyone, Bataille said that’s not a concern for the department.

“We believe that we have work to do so that every American, young or old, who wants to enroll in quality, affordable coverage will be able to do that,” she said.

Among the Texas enrollees, 27 percent are ages 18 to 34, and 49 percent are ages 45 to 64. By comparison, 25 percent of enrollees nationally are 18 to 34, and 54 percent are 45 to 64.

Healthcare experts have said the number of young Americans who enroll could affect the quality of the insurance risk pool and, inevitably, premium prices for everyone.

“That does not bode well for exchange premiums in 2015,” Davidson said, “which will rise sharply if there is a disproportionate number of older enrollees.”


Posted in Affordable Care Act (ACA) | Comments Off

The Senate and House remain far apart on the best way to overhaul the nation’s broken immigration system. Common ground is seen, though, on the topic of a federal electronic employment-verification system. Major penalties would be enforced for those who employ undocumented immigrants.

All employees, including U.S. citizens, will be subject to e-verify when applying for a job to ensure that they are legally eligible to work here.

Is Employee E-Verify A New Thing?

No. E-verify programs have been around for a while, though on a voluntary basis. Some federally contracted employers are required to implement the checks, and Arizona has a state law mandating businesses within their borders utilize the service.

E-Verify Fines

Under the current law, employers who knowingly hire undocumented immigrants are fined $375 per worker for their first offense, and $4,300 per worker for their third offense. That seems minuscule compared to the Senate-passed bill, which proposes $3,500 to $7,000 per worker for the first violation and $10,000 to $25,000 for the third violation.

A few items need to be agreed upon, though. The Senate and House disagree over the implementation time, with the Senate proposing the DHS take four years to restructure and improve the system, while the House dictates two years. The House bill pushes for a private contractor to run the show, while the Senate asks for federal employees.

A mandatory e-verify would affect all employers. PayDayPro is on top of the changing landscape involving the Affordable Care Act, E-Verify, and so much more.

Posted in Human Resources | Comments Off

When the recession hit the United States, the IRS uncovered an illicit widespread practice – the misclassification of workers as ‘independent contractors’ to avoid paying insurance, taxes, fair wages, and overtime.

In 2010, 23 states had already passed legislation against the misclassification of employees. This year, that number moved up to 30.

Why is this practice becoming so common amongst employers?

Well, an employer can save on average $3,710 annually in employment taxes for each worker earning a salary of $43,007, according to a June 14 report from the Treasury Inspector General for Tax Administration. That’s a tempting savings. Furthermore, the statistics resulting from a 2000 study of nine states by the federal government revealed that one third of employers misclassified employees, up from 15% in 1984.

The misclassification can result in fines, penalties, and back-taxes.

Posted in Payroll | Comments Off

“Long-Term Unemployed.” It’s a phrase that’s become quite common over the last several months. President Obama made it a focal point of Tuesday’s State of the Union Address, and this Friday, CEOs from some of the country’s largest corporations will be signing a pledge to avoid discrimination against those who are considered long-term unemployed. Let’s take a moment to look at what’s going on and what can be done to improve the situation.
Officially, anyone out of work for more than 27 weeks is considered to be long-term unemployed. According to the Bureau of Labor and Statistics, that’s 3.9 million Americans! While everyone’s story is different, the recent economic downturn caused many otherwise productive and qualified workers to lose their jobs due to layoffs, closures and other reasons beyond their control. To complicate things further, about half of the long term unemployed are over 50 years old. The AARP states that it takes nearly twice as long for applicants over 50 to land a job versus their younger counterparts. In addition, various studies have shown that employers are much less likely to consider a candidate with a large employment gap when another applicant with similar, or even fewer relevant skills has a more recent work history. Since many employers are ignoring unemployed candidates, the problem is simply getting worse and more discouraging for those affected.
So, what can be done? In addition to large businesses like AT&T and Xerox who are pledging to consider unemployed workers in their hiring process, all companies should reexamine their practices when it comes to recruiting and selection. While hiring managers have been traditionally trained to scrutinize and condemn gaps in employment, the recession forced many people into gaps that were no fault of their own. It’s always a good idea to inquire about spotty employment history in an interview, but it would be unwise to put too much stock in it; especially if layoffs or other non-performance reasons are involved. Also, don’t be afraid to bring in candidates who you feel might be overqualified. There’s a good chance that their skill set is exactly what you’re looking for, and after the interview, you may find that they are a perfect fit.
One last thing to keep in mind when considering a long-term unemployed candidate: Who is going to work harder to impress a new employer than someone who has just spent several months searching for someone to give them a chance? Overall, the long-term unemployed represent a very skilled, qualified and motivated group of candidates for any business looking to grow and they should not be ignored.

Posted in Human Resources | Comments Off


Have you ever gone out to eat with a large group of friends and noticed that when the bill arrives, the tip has already been included?  As a former restaurant worker, I can tell you the first number that comes to mind when you hear ‘group of 8 or more’ is 18.  In Massachusetts, 18% is the maximum tip employees can automatically add to restaurant tabs of 8 people or more.  Currently, automatic gratuities, as well as normal tips, are to be claimed as income by each individual employee.  The IRS defines a gratuity as an amount that must be determined by the consumer (not the restaurant).

However, new policy set in place by the IRS has caused restaurant chains to rethink their current automatic gratuity policies.  Beginning January 1, 2014 automatic gratuities will be considered regular wages, and therefor will be subject to payroll tax withholding.  Not only could this be potentially detrimental to the workers income, but this will also require more paperwork and added costs from the employer.

Another hurdle that would need to be cleared due to this new policy is how employers would monitor over-time pay.  Hourly wages would vary day to day, based upon how many large parties (and automatic gratuities) each employee had that day, making it nearly impossible to manage over-time hours.

While tipping is NOT mandatory in this country, it is expected in most service industries.  Many restaurant workers shy away from automatic gratuities because they tend to receive more than 18% as a tip.  According to a study done by Zagat, the average American tips 19.1%, which is up from the average 10 years ago which was 18.3%.  One way restaurant employers are successfully navigating this dilemma is by printing a ‘suggested tip’ amount on the bottom of a customer’s bill.  This makes the customer conscious of what an appropriate tip would be, while avoiding additional tax issues by adding the gratuity automatically.

Undoubtedly, there will be both positive and negative feedback as a result of this ruling.  However, during a time when employers are already being forced to focus on compliance issues due to the Affordable Care Act, any additional tax requirements may prove to be quite the payroll headache.

Posted in Payroll | Comments Off

On Monday February 10 2014, the Treasury released final regulations related to the employer mandate provisions of the Affordable Care Act that provide clarification and extend transition relief for non-calendar year plans. They also provide a two-year phase-in for large employers to offer coverage to 95% of all full-time employees and a one-year delay for employers with more than 50, but fewer than 100, full-time employees.  This change will allow these employers an extension to January 1 2016 to fully comply with ACA.

Posted in Affordable Care Act (ACA) | Comments Off
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