Tuesday, April 17, 2007

Two Key Maryland Cases End Today

1. The Fourth Circuit's "black monkeys" case narrowed Title VII's anti-retaliation protection for employees working in Maryland. The Court held that by reporting to your boss that your co-worker called African-Americans "black monkeys" and "black apes," you are not opposing discrimination in the workplace (and therefore not entitled to Title VII's anti-retaliation protections). The Court reasoned that because a single discriminatory outburst does not violate Title VII, opposing such an outburst is not entitled to protection. See here, here, here, and here. Today, the Supreme Court declined to review the Fourth Circuit's decision in Jordan v. Alternative Resources Corp.

2. Attorney General Douglas Gansler today announced he would not seek Supreme Court review of the Fourth Circuit's decision holding that the Maryland's Wal-Mart law is preempted by ERISA. The Wal-Mart law, summarized here, would have required the company to spend at least 8% of its total wages on health insurance.

Restaurant Workers Among the Most Abused.

In fiscal year 2006, the Department of Labor collected nearly $50.6 million in back wages for approximately 86,700 workers in "low-wage industries." What industry made up the bulk of the violations? The restaurant industry.

Although the statistics are drawn from the entire nation, I know it is no different in Maryland since this firm (and several of my colleagues) have pursued claims on behalf of servers, kitchen workers, and custodial employees.

Friday, April 13, 2007

Are You Really an Independent Contractor?

Monday is tax day. Is the individual responsible for payroll taxes or is the employer? Is the individual entitled to overtime for working more than 40 hours in a week. It may depend on whether the individual is an independent contractor or an employee. How can you tell?

One place to start is Maryland's unemployment law. That law provides a narrow (perhaps the narrowest) definition of an independent contractor. The law states an individual is an independent contractor if:

(1) the individual who performs the work is free from control and direction over
its performance both in fact and under the contract;

(2) the individual customarily is engaged in an independent business or occupation of the same nature as that involved in the work; and

(3) the work is: (i) outside of the usual course of business of the person for whom the work is performed; or (ii) performed outside of any place of business of the person for whom the work is performed. (emphasis added)

The Court of Appeals interpreted the statute in DLLR v. Fox. There the Court held that hygienists (and other professionals) were employed by the agency that placed them in temporary positions in the Baltimore area. Why? The hygienists were not "free from control" by the agency. The agency "controlled" the hygienists' placement and pay rate. (As a result the agency had to pay back unemployment tax premiums for hygienists).

Again, the Maryland unemployment law independent contractor test is one of the most restrictive. The IRS and common law tests are slightly different. But, if your employer controls your work and sets your pay you may well be an employee entitled to unemployment benefits.

Do you believe you have been misclassified as an independent contractor? Contact me.

Wednesday, April 11, 2007

True or False: Maryland Law Does Not Require Employers to Give Breaks to their Adult Employees.

[UPDATE: Starting March 1, 2011, certain retail employee will be entitled to breaks.]

True. According to the Maryland Department of Labor: "There is no law requiring an employer to provide breaks, including lunch breaks, unless the employee is under the age of 18."

But if an employer gives you a "break" you must be completely relieved of your duties for at least twenty minutes. Otherwise you are working and should be compensated for this "break" time. See this post.

Monday, April 09, 2007

Medex v. McCabe and Accrued Vacation

The Maryland Court of Appeals seminal wage payment and collection law decision is Medex v. McCabe. The rule of Medex is:

If an employee earns compensation he or she is entitled to it and an employer cannot arbitrarily require an employee to forfeit those wages.

The Court of Appeals reinforced Medex's holding in a severance case, Stevenson v. BB&T. The Court distinguished between severance an employee earns and severance an employer gives the employee for something other than his or her labor (such as in exchange for a covenant not to compete or in exchange for a waiver of claims). Earned severance is subject to the Wage Payment and Collection Law; unearned severance is not subject to the Wage Payment and Collection Law. (Coverage matters because the Wage Payment and Collection Law allows an employee to recover up to triple the amount owed and his or her attorney's fees.)

Is the law any different for vacation pay. I think not. Medex nearly says as much. The Court citing a series of out of state decisions comes to the conclusion:

[A]n employee’s right to compensation vests when the employee
does everything required to earn the wages

If an employer allows employee to accrue or earn vacation based the time they work such vacation "vests."

Note the idea of vesting vacation pay exists in other states, most notably California.

Friday, April 06, 2007

A Tail of Two Wage Bills.

Legislators introduced two interesting wage bills in this General Assembly session. One "living wage bill" raises the minimum wages for employees working for state-government contractors. The other bill seeks to limit executive compensation to a maximum of thirty times a company's lowest paid worker. (Thanks to Trevor Rosen at the Maryland Law Blog for pointing me to the executive compensation bill)

A vote on a living wage bill is expected today. According to the Daily Record:

The House of Delegates is expected to vote Friday on House Bill 430, which would make Maryland the first state to require companies with state contracts to pay the living wage. The wage would apply to workers on contracts worth $100,000 or more and would be set at $11.30 an hour for contracts performed in Baltimore City and Montgomery, Prince George’s, Howard, Anne Arundel and Baltimore counties. State contracts in the remaining counties would require workers to be paid $8.50 an hour.

The executive compensation bill appears unlikely to make it out of Committee.

Monday, April 02, 2007

Employers May Not Have their Hand in Restaurant Workers' Tip Pool

Employers can pay restaurant workers the "sub minimum wage" ($3.08 per hour in Maryland) because servers and waiters can make up the difference earning tips. Employers call this the "tip credit" against the minimum wage.

Employers may pool all tips and distribute them equitably to those employees who are in the business of providing service to the customers. This is called a tip pool.

But can the House keep any tips? Absolutely not. If the employer keeps the tips then it is not entitled to the tip credit. In such case the serves would have valid claims for the full minimum wage.