Tag Archives: Minimum wage

Post-Election Employment Implications in Illinois, Indiana, Missouri and Wisconsin

Contributed by Steven Jados, Rebecca Dobbs Bush, Suzanne Newcomb, and Brian Wacker November 7, 2018

47062864 - man putting a ballot into a voting box - usaWith the dust mostly settled after election night, we can now look at the impact the election will have on employment laws in Illinois, Indiana, Missouri and Wisconsin, and at the federal level.

Illinois: The major story in Illinois is the election of J.B. Pritzker as governor.  In short, his election is likely to usher in greater infrastructure spending—including an increase in prevailing wage jobs—and more aggressive enforcement efforts by state agencies charged with regulating employers and protecting employees. Beyond that, minimum wage increases, expansions to employee protections under the Illinois Human Rights Act, and more legislation favorable to employees are likely to receive strong consideration in the General Assembly in the near future.

Indiana: We do not expect to see any significant state-level changes in Indiana. Republicans maintained their supermajority in both chambers of the Indiana Statehouse and swept every statewide race on the ballot. Republican Eric Holcomb (elected to his first four year term in 2016) will continue as Indiana’s Governor.

Missouri: In Missouri, the elected status quo kept. Governor Mike Parsons, serving out former Governor Eric Greitens’ term, was not on the ballot. In the Legislature, Republicans maintained their supermajority status in both the Missouri State Senate and House of Representatives. In the Senate, the Republicans maintained their 24 to 10 seat lead over Democrats with no seats changing hands. In the House, preliminary results show that each party flipped three seats from the other, maintaining the Republicans’ dominant 116 to 47 seat advantage.

Missouri voters did, however, approve Proposition B, a minimum wage increase measure by a 62% to 38% margin. The measure increases the state’s current $7.85 minimum wage incrementally over the next five years to: $8.60 in 2019, $9.45 in 2020, $10.30 in 2021, $11.15 in 2022 and $12.00 in 2023. After 2023, the minimum wage will automatically increase or decrease based on Consumer Price Index for Urban Wage Earners and Clerical Workers. The measure also increases the penalty for employers paying employees less than minimum wages. Affected workers can now recover the full amount of the wage rate and an additional amount equal to twice the unpaid wages as liquidated damages.

Wisconsin: In 2011, Governor Walker drew national attention to Wisconsin when he revealed his plan to eradicate collective bargaining for most public workers. Since 2013, the governor and the legislature in Wisconsin have been dominated by Republicans. Scott Walker’s loss to Tony Evers, marks the end of that complete control. And based upon a law signed last year by Governor Walker, the margin of loss, while extremely narrow, is not narrow enough to demand a recount.

Evers campaigned on promises to cut income taxes by 10 percent for people making less than $100,000 and for families making less than $150,000. Evers has also stated that it is his goal to eliminate the limitations on unions (known as Act 10). However, with the legislature remaining primarily Republican, such a goal will likely remain out of reach.

Change does not happen overnight and a Republican legislature will slow any initiatives of Democrat, Tony Evers. However, the loss of a 5 year complete Republican majority of government will certainly have an effect on Wisconsin businesses.

Federal: At the federal level, little is likely to change over the next two years with respect to the Executive and Legislative branches of government. As long as Republicans remain in the White House, the composition and direction of the National Labor Relations Board (NLRB) is unlikely to shift dramatically from its current course. The Equal Employment Opportunity Commission (EEOC), Department of Labor (DOL), and other agencies charged with regulation and enforcement of employment-related laws are also likely to continue to operate much as they have for the last two years—albeit with less-aggressive enforcement initiatives directed at businesses and, perhaps, smaller budgets. The prospect of significant employment-related legislation—whether protective of employees or businesses—seems quite unlikely for the foreseeable future given that Democrats control the U.S. House of Representatives, and Republicans control the Senate. However, there is some talk that family paid medical leave and an infrastructure bill may receive bipartisan support. We shall see. Of course, Republicans are likely to continue to use their Senate majority to fill judicial vacancies with conservative judges.

Although gridlock is likely in the federal government, we expect plenty of employment-law related activity at the state level, particularly in Illinois, and we will continue to apprise you of new developments as they arise.

 

Save the Date! February 16th Webinar – The New Administration: Impact on the Workplace Examined

How do your company’s policies and procedures comply with the views of our new administration? Please join us as we discuss how you can best prepare for any likely impacts on your business.

Join us for the next installment of our quarterly labor and employment series on Thursday, February 16 at 12:00PM CT to learn about what workplace changes you can expect under the new administration.

Topics to be discussed include:

  • The Affordable Care Act
  • Minimum Wage
  • National Labor Relations Board developments
  • Department of Labor changes
  • Executive Orders
  • Supreme Court and other judicial vacancies

This program is available via webinar. You can register here.

Update: New Rules Clarify the Minimum Wages for Tipped Employees, Overtime and Complaints Under the Chicago Minimum Wage Ordinance Going Into Effect July 1, 2015

Contributed by Sara Zorich and Michael Wong

The City of Chicago just issued new rules clarifying the Chicago Minimum Wage Ordinance with respect to the minimum wage for tipped employees, overtime calculations for tipped and non-tipped employees, and complaints against employers.

The Minimum Wage and Tip Credit for Tipped Employees
The Rules clarify that the minimum wage for tipped employees is $10.00 and that Section 1-24-030(a)(1) sets forth the minimum wage minus tip credit that tipped employees may be paid.Wage

As of July 1, 2015, the minimum wage minus tip credit is $5.45, or the state minimum wage of $8.25, minus the state tip credit of $3.30 (40% of $8.25), plus $.50 provided by the Ordinance. Thus, under the Ordinance’s current minimum wage of $10.00, the current tip credit for employers under the Ordinance is $4.55 (i.e. $10.00 minus $5.45).

Chicago’s minimum wage for tipped employees is calculated based on the State and/or Federal minimum wage and tip credits. So, if either the State or Federal minimum wage is increased or the tip credits are decreased, it will impact the Chicago minimum wage for tipped employees. For example, if Illinois increases the state minimum wage to $9.00 and decreased the state tip credit to 30%, the new Chicago minimum wage for tipped employees would be $6.80, or the state minimum wage of $9.00, minus the state tip credit of $2.70 (30% of $9.00), plus the $.50 provided by the Ordinance.

Overtime
Unless an employee is exempt from overtime under the Illinois Minimum Wage Law (IMWL), employers subject to the Chicago Ordinance must pay employees overtime of 1.5 times the City’s minimum wage. This means that on July 1st, the Chicago’s minimum overtime wage will be $15.00 per hour (i.e. $10.00 times 1.5).

Under the Ordinance, tipped employees must be paid an overtime hourly wage of 1.5 times the City’s minimum wage, minus the City’s tip credit. Under Chicago’s current minimum wage of $10.00, the minimum overtime wage for tipped employees will be $10.45 per hour (i.e. $10.00 times 1.5, minus Chicago’s tip credit of $4.55 [$10.00 minus $5.45]).

Again, it is important to remember that the Chicago minimum wage for tipped employees is tied to the State and/or Federal minimum wage and tip credit. Thus, if Illinois increased the minimum wage to $9.00 and decreased the tip credit to 30%, the new Chicago minimum wage for tipped employees would be $6.80 and the overtime hourly wage for tipped employees change to $11.80 per hour (i.e. $10.00 times 1.5, minus the City’s tip credit of $3.20 [$10.00 minus $6.80]).

More importantly, much like state law, under the Ordinance employers must be able to show that the employee’s wages plus tips equal Chicago’s minimum wage (which is currently $10.00 and $15.00 for overtime), or else the employer is required to pay the shortfall so that the employee’s wages plus tips equals the minimum wage.

For example, if a tipped employee works 50 hours in a particular week and makes $200 in tips, the employer would be required to pay the employee an additional $27.50 on the employee’s paycheck:

(40 hours of straight-time at $5.45 = $218.00) + (10 hours of overtime at $10.45 = $104.50) + (Tips Received = $200.00) = (Sub-Total = $522.50)

  • Under the Ordinance, the minimum wage owed for 50 hours would equal 40 hours times the minimum straight-time wage of $10 ($400) and 10 hours times the minimum overtime wage of $15 ($150), for a total of $550.
  • Under this scenario, the employer would be required to pay the employee an additional $27.50 on the tipped employee’s paycheck, since the amount received in wages and tips by the employee of $522.50 is $27.50 less than the $550 required to be paid.

Record Keeping for Tipped Employees
The Rules specifically state that employers must keep records of wages and tips for all tipped employees for at least three (3) years and that the records must include the following:

  1. An identifying symbol on payroll records indicating if an employee’s wages include tips;
  2. A report received from and signed by each tipped employee that state the tips received during each work day;
  3. A report that shows the amount by which the wage of each tipped employee was increased by his or her tips, as calculated by the employer;
  4. A record of the hours worked each work day in which each tipped employee received tips and the total daily or weekly straight-time and overtime earnings for such hours; and
  5. A record of the hours worked each work day in which each tipped employee receives no tips, and the total daily or weekly straight-time and overtime payment made by the employer.

Complaints and Investigations
Employers should note that there is no set time period in the Ordinance that employees must file a complaint with the City’s Department of Business Affairs and Consumer Protection (BACP) or a civil action. The Rules do provide that the BACP may choose not to accept a complaint filed more than one (1) year after the disputed wages were due. However, the ability or inability of an employee to file a complaint with the BACP, does not limit their ability to file a civil action.

It is important for employers to keep good records and be aware of the potential for complaints, as once a complaint is filed with the BACP and a copy of the complaint is sent to the employer, you will have 14 days to respond. Additionally, the BACP may request specific documents or records from employers, including copies of any checks or payments made to the employee. Indeed, under the Rules failing to respond to a complaint or provide requested documents could result in the BACP issuing administrative notices of violations seeking fines of $500-$1,000, license suspension or revocation and/or restitution for employees and/or former employees.

Copies of the new rules and FAQs issued by the City may be found here:

As previously noted, Chicago’s Ordinance goes into effect July 1st. While the rules and guidance from the City of Chicago continue to develop, employers will be required to comply with the Ordinance. As such, it is important to contact your legal counsel with any questions to make sure you are in compliance due to the penalties allowed under the Ordinance.

REMINDER – Chicago Minimum Wage Ordinance Requires Notices and Wage Increases Starting July 1st!

Contributed by Michael Wong and Sara Zorich

This Wednesday, July 1, 2015, Chicago’s Minimum Wage Ordinance (Chicago Municipal Code §1-24) goes into effect, increasing the minimum wage to $10.00 per hour for non-tipped employees and $5.45 for tipped employees.

IMPORTANT NOTICE REQUIREMENTS: All employers that maintain a business facility within the geographic boundaries of  Chicago AND/OR are subject to one or more of the license requirements in Title 4 of the Municipal Code of Chicago are covered by Chicago’s Minimum Wage Ordinance and MUST do the following starting July 1st:

  1. Post Chicago’s Minimum Wage Poster by July 1st! (Click here for a Copy of the Poster)
  2. Include a copy of Chicago’s Minimum Wage Poster with the first paycheck issued after July 1st to each employee that is subject to the Ordinance (i.e. works at least 2 hours in Chicago, or at some point may work at least 2 hours in Chicago)!
  3. Include a copy of Chicago’s Minimum Wage Poster with the first paycheck of any employee hired after July 1st!

From our prior Chicago Minimum Wage Ordinance Post, here are points that you need to know about the Chicago Minimum Wage Ordinance:

  1. Covered Employers: Any individual, partnership, association, corporation, limited liability company, business trust, or any person or group of persons that has at least one employee and (1) maintains a business facility within the geographic boundaries of Chicago AND/OR (2) is subject to one or more of the license requirements in Title 4 of the Municipal Code of Chicago.
  2. Covered Employees: Any employee who works for at least 2 hours in any two-week period within Chicago’s geographic boundaries, including driving through Chicago during work (e.g., that delivery driver that takes Route 94 from Evanston to Gary and gets stuck in rush hour traffic is covered!).
  3. Hours subject to Chicago’s Minimum Wage: Chicago’s Minimum Wage only has to be paid for hours worked by the employee when he or she is physically present within the geographic boundaries of Chicago. This includes time spent driving during working hours, but does not include time commuting between home and work.
  4. Non-Tipped Employees’ Hourly Rate: Chicago’s Minimum Wage for non-tipped employees starting July 1, 2015 will be $10.00/hour, and increase as follows: July 1, 2016 to $10.50/hour; July 1, 2017 to $11.00/hour; July 1, 2018 to $12.00/hour; July 1, 2019 to $13.00/hour; and each July 1st thereafter, Chicago’s Minimum Wage will increase by an amount announced by the Commissioner of Business Affairs and Consumer Protection (and, of course, if the CCMW is less than the Illinois or Federal minimum wage, then the highest wage rate applies).
  5. Tipped Employees’ Hourly Rate: Chicago’s Minimum Wage for tipped employees starting July 1, 2015 will be the greater of the Federal or Illinois minimum wage for tipped employees plus $0.50/hour, and increase as follows: July 1, 2016 by an additional $0.50 ($1.00 total); and each July 1st thereafter, Chicago’s Minimum Wage will increase by an amount announced by the Commissioner.
  6. Penalties & Damages: A fine of $500.00 to $1,000.00 per day for each offense that is not corrected. Potential license suspension or revocations and an order to pay restitution to underpaid employees. Additionally, employees can pursue a private cause of action to recover THREE times the underpayment, attorney fees and costs.
  7. Union/CBA Issues: There is no grandfathering for current “in-force” collective bargaining agreements! This means that, depending on the provisions of a current CBA, there could be an automatic increase in all employees’ wages (i.e., if only the lowest paid employee’s rates are defined and each other level is based a percentage higher), or the union could even demand to re-open bargaining mid-contract.  We anticipate that there will be substantial controversies over this.

Up Up and Away the Minimum Wage Rate Goes?

Contributed by Julie Proscia

On November 4, 2014, five states — Illinois, Alaska, Arkansas, Nebraska, and South Dakota — as well as a handful of cities and counties, will all vote on various binding and non-binding initiatives that contemplate raising the minimum wage.  These state and local initiatives arise after a failed attempt to bring the issue on the federal level earlier this year, and are important to watch in an ever borderless commerce system.

The state roundup of Minimum Wage Initiatives is as follows:Ballot Box

Illinois

The Illinois Minimum Wage Increase Question, which is on the November 4, 2014 ballot, is an advisory question and is NON-binding. The measure asks voters whether or not they support increasing the hourly minimum wage rate from the current rate of $8.25 per hour to $10.00 per hour by January 1, 2015. Although the result of the question is not binding, supporters are hoping to use an affirmative vote to increase momentum for subsequent legislation.

Arkansas

The Arkansas Minimum Wage Initiative is on the November 4, 2014 ballot as an initiated state statute. After much litigation, the Arkansas State Supreme Court denied a Little Rock businessman’s effort to block the ballot question and the initiative will be voted on. If successful, the Arkansas state minimum wage rate would increase from $6.25 to $7.50 per hour on January 1, 2015; to $8.00 per hour on January 1, 2016; and to $8.50 per hour on January 1, 2017. Employers in Arkansas that do more than $500,000 in business per year are currently required to pay at least the federal minimum wage rate of $7.25 per hour.

Alaska

The Alaska Minimum Wage Initiative is on the November 4, 2014 ballot.  If successful, it would increase the state’s minimum wage rate from $7.75 per hour to $8.75 per hour beginning January 1, 2015, and the rate will increase again to $9.75 per hour on January 1, 2016. After 2016, the rate would be adjusted either based on inflation, or remain $1.00 higher than the federal minimum wage, whichever amount is greater.

Nebraska

The Nebraska Minimum Wage Initiative is on the November 4, 2014 ballot as an initiated state statute. If successful, the measure would increase the state’s minimum wage rate from $7.25 per hour to $8.00 per hour on January 1, 2015, and from $8.00 per hour to $9.00 per hour on January 1, 2016.

South Dakota

The South Dakota Minimum Wage Initiative is also on the November 4, 2014 ballot as an initiated state statute. If successful, the measure would increase the minimum wage from $7.25 per hour to $8.50 per hour beginning on January 1, 2015. Thereinafter, an increase in the minimum wage rate would occur each year based on inflation.

Although midterm elections are typically not as exciting as presidential years, the November 4, 2014 election has the potential to impact numerous employers in multiple states throughout the country and is definitely one to watch. We will keep you posted!

A LOT Is Happening In Your State Employment Laws!

Contributed by Heather Bailey

ArizonaMinimum wage raises to $7.90 per hour on January 1, 2014.

CaliforniaEffective January 1, 2014, employers may no longer ask applicants or employees about any sealed conviction records, unless they get the individual’s consent first to use. Generally, it is best to stay away from any such sealed records when making any employment determinations.  Also effective this same date, employers may not discriminate against veterans or those with a military status.

Moreover, computer software employees are now exempt from overtime if they make at least $40.38 per hour and their annual salary is at least $84,130.53.  As always, you want to make sure these employees are also considered exempt under the FLSA as well.  If they are not, then they remain non-exempt.

Minimum wage = $9.00 per hour effective July 1, 2014 and $10 effective January 1, 2016.

ColoradoLooks as if Minimum Wage Order 30 will be approved, raising minimum wage to $8.00 per hour and to $4.98 for tipped employees effective January 1, 2014.  Stay tuned.

FloridaMinimum wage is increased to $7.93 per hour and $4.91 for tipped employees on January 1, 2014.

Illinois:  Effective January 1, 2014, medical marijuana becomes legal for certain uses – but as employers, you don’t necessarily have to accommodate employees for this use.

Montana:  Minimum wage = $7.90 starting January 1, 2014.

New Jersey:  As of October 21, NJ now recognizes the marital status of those employees and applicants who have entered into same-sex marriages.  Also, it is pretty much a done deal that minimum wage is going to $8.25 per hour effective January 1, 2014, with yearly cost-of-living increases, once the unofficial election votes are made official.

New YorkHaving payroll problems with paying employees too much and want to recoup that money?  In NY, you can do so now.  These regulations have changed for reimbursement and should be consulted when making such pay back deductions.

OhioOH’s minimum wage reaches $7.95 per hour and $3.98 for tipped employees on January 1, 2014.

OregonEmployees’ and applicants’ marital status of same-sex marriages from other jurisdictions will now be recognized effective October 16.

Rhode IslandEffective July 15, 2014, employers can no longer be liable to employees or applicants for civil damages, demands or claims when the employer relies upon a criminal background check when making an employment decision based upon a conviction.

VermontVT’s minimum wage is going to $8.73 per hour and $4.23 for tipped employees on January 1 2014.

Washington:  Minimum wage increase to $9.32 an hour as of January 1, 2014 as well.

DOL Significantly Narrows Yet Another FLSA Exemption

Contributed by Suzanne Newcomb

In regulations set to take effect January 1, 2015, the Department of Labor eliminated the Fair Labor Standards Act (FLSA) exemption for home care providers employed through third-party agencies and significantly narrowed the exemption for those employed by households directly.  Under current law, employees who provide in-home care for those who cannot care for themselves due to age, illness or disability are largely exempt from the FLSA’s overtime and minimum wage provisions.  (Though Illinois, Wisconsin, California and handful of other states have state laws in place requiring minimum wage and overtime pay for many of these workers.  Indiana and Missouri and a majority of other states do not.)

In its Final Rule issued September 17, 2013, the DOL largely gutted the so called “companionship exemption” by significantly narrowing its definition of “companionship services.”   Under the new rule, home health care companies, staffing agencies and other employers of in-home care staff will be prohibited from claiming the exemption regardless of the duties their employees actually perform.  Households who hire an employee directly in what the DOL describes as an “elder sitter” role to provide “companionship, fellowship, or protection” may still claim the exemption but only in certain circumstances.  They too will lose the exemption if the employee provides medical services, performs services for others within the infirmed individual’s household or devotes more than 20% of work time to housekeeping, transportation or assisting the infirmed individual with daily living skills (such as eating, bathing, grooming) as opposed to providing companionship and fellowship to and/or oversight of the individual.  

What does this mean for your business?  Those in the home care industry should examine employee pay classifications, compensation structures and staffing levels.  The new rule takes effect in just over a year.  Heavily impacted employers will need that time to craft proper procedures and implement tools to accurately track and record employees’ time and duties; along with the minimum wage and overtime requirements come FLSA mandated record keeping obligations.  Some employers may choose to increase staffing levels or restructure shifts to avoid significant overtime expenditures.  Read the full text of the rule at www.dol.gov/whd/homecare/final_rule.pdf.  Further information and guidance is available at www.dol.gov/whd/homecare.

For employers outside the home care industry, this is but the latest in a trend toward narrowed exemptions to the FLSA.  All employers should review their exempt / non-exempt classifications, time keeping tools and record keeping procedures regularly to ensure they are compliant with current law and that each employee is properly classified in light to the work actually performed.  If challenged, it is the employer’s burden to prove a claimed exemption is appropriate.  Clear and accurate records are the key component in meeting this burden.  Misclassifying an employee as exempt (or failing to properly document hours worked) can be a costly mistake and make the employer on the hook for unpaid wages, overtime, taxes and penalties.