signment task:
Article:
Linkedin Corp. has paid $3,346, 195 in overtime back wages and $2,509,646 in liquidated damages to 359 former and current employees working at company branches in California, Illinois, Nebraska, and New York. An investigation by the U.S. Department of Labor's Wage and Hour Division found that Linkedin was in violation of the overtime and record-keeping provisions of the FLSA. Linked failed to record, account, and pay for all hours worked in a workweek, investigators found. The FLSA does not allow unpaid "off the clock" hours for employees covered by (nonexempt from) the FLSA. Linkedin agreed to pay all the overtime back wages due and take proactive steps to prevent repeat violations. Philadelphia sports bar and restaurant chain Chickie's & Pete's and its owner, Peter Carrocchi, Jr. have signed a consent judgment agreeing to pay 1,159 current and former employees at nine locations more than $6.8 million in back wages, plus damages (a $50,000 civil penalty) for improperly taking tips from servers and violating federal minimum wage, overtime, and record-keeping requirements. The proposed consent judgment has been filed in the U.S. District Court for the Eastern District of
Pennsylvania and is subject to the review and approval by the court. Under the Fair Labor Standards Act, tips are the property of the employee who receives them; however, restaurant operators can benefit by claiming a credit based on the tips toward their obligation to pay those employees the full minimum wage. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference during the pay period. An employer that claims a tip credit is required to pay a tipped employee only $2.13 an hour (unchanged since 1991) in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. Investigators from the Wage and Hour Division found that the company required servers to contribute a portion of their tips to an improper "tip pool," or tip-sharing arrangement, which was approximately between 2 and 4 percent of the server's daily table sales. The owner illegally retained approximately 60 percent of the tip pool. This amount had come to be known as "Pete's Tax" and was required to be paid to the manager in cash at the end of each shift. Additionally, servers and bartenders were paid only a flat rate of $15 per shift at all locations except for Chickie's and Pete's airport establishment an amount that was not sufficient in all cases to even cover the minimum cash wage of $2.13 per hour that must be paid to a tipped employee when an employer claims a tip credit under federal law. Additionally, the employer failed to pay the required overtime wages to these employees when they worked in excess of 40 hours in a week. Investigators also determined that employees were not paid for time spent in mandatory meetings and training, and were improperly required to pay for uniforms. Under the provisions of the consent judgment the company will pay minimum wage and overtime back wages and is required to return the improperly retained tips to the servers, as well as pay liquidated damages. In addition, the company has agreed to enhanced compliance, including: External compliance monitoring for an 18-month period; Internal compliance monitoring for an additional 18-month period; Training for all employees on their rights under the FLSA; Providing a statement to any employee required to contribute to a tip pool detailing the amounts that were contributed by the employee, the job categories of workers included in the tip pool and the specific percentage each category receives; Peter Carrocchi, Jr., the owner, will write an article for a restaurant trade publication that addresses an employer's obligations under the FLSA; Chickie's & Pete's and Carrocchi are to be permanently enjoined and restrained from violating the provisions of the FLSA in the future.
Gerhart& Newman (2020) suggests that higher minimum wages results in the risk of reducing employment opportunities. Please read Exhibit 17.5 Wage and Hour Division Investigation Examples.
How is the employer addressing minimum wage, hours worked and provisions of the Federal Labor Standards Act (FLSA). What are the major issues?