Workers' Rights for Workforce Development Total Time: 1 Hour, 30

UNIT 3 – Wage and Hour Laws and Protection UNIT 3 Photograph by Robert L. Simpson Workers’ Rights for Workforce Development

Total Time: 1 hour, 30 minutes Wage and Hour Laws & Protection

I worked at a cleaning company where I would work for another person who was the one who had the contract. I only worked for her on weekends. One time I told her I couldn’t work and when I returned to work she told me that she no longer needed me and never paid me the last week I had worked. I felt abused, as this person only paid me what she wanted and when she wanted and only gave me work when it was convenient for her. I was without work whenever she wanted and she never paid me the $90 she owed me. – Job-seeking client, February 2015 Copyright UIUC Labor Education Program, 2015 3-1 Workers’ Rights for Workforce Development

WORKERS’ RIGHTS FOR WORKFORCE DEVELOPMENT

Purpose Publication Date This curriculum is based on learning in social, cooperative and This Workers’ Rights for Workforce Development active ways, with students’ questions and concerns as the center Curriculum is current as of December 1, 2015. focus. The teacher is a facilitator who inspires students to analyze, look for equality, find history, and speak in a strong and informed Preferred Citation voice. Our goal is to help you, as workforce development staff, Authors: Alison Dickson, Sue Davenport, and engage your students in learning that they have rights and that Marsha Love. there are resources accessible to them for help in protecting Workers’ Rights for Workforce Development: A those rights. They are not alone and there is strength in numbers. Practical Guide For Instructors and Job Seekers - Workers and their struggles are making headline news every day Illinois Edition. 1st edition. – from the Fight for $15 to striking school teachers to efforts to Chicago: Labor Education Program, School of extend overtime provisions to more Americans. Assistance can Labor and Employment Relations, University of come from fellow workers, unions and worker centers, lawyers and Illinois at Urbana-Champaign, 2015. government agencies at local, state and federal/national levels. As a wide range of organizations, both private and public, engage Trainings in workforce development activities, this curriculum is flexible and Contact us about leading training sessions intended to be adapted to different kinds of programs, clients and at your organization or agency. local environments. Within an organization, job roles may vary, Contact Information but we believe that learning workers’ rights is useful for all direct service staff. As service staff learn more about workers’ rights, Alison Dickson they will see how their own work - as case managers, instructors, Instructor, Labor Education Program business service representatives - can be more effective with clients School of Labor and Employment Relations if they include workers’ rights. University of Illinois at Urbana-Champaign (312) 996-2624 Disclaimer [email protected] The information contained within this curriculum is provided on an “as is” basis for general educational purposes only; it should not be construed in any way as giving business, legal, or other advice. Individuals who use this information for any reasons other than for general educational purposes do so at their own risk. All warranties of any kind, express or implied, including fitness for a particular purpose, are disclaimed. Neither the University of Illinois, nor any of its units, programs, employees, agents or individual trustees, shall be held liable for any improper or incorrect use of the information contained within this curriculum. Also, none of these entities shall be liable for any direct, indirect, incidental, special, exemplary, or consequential damages however caused and on any theory of liability, whether in contract, strict liability, or tort arising in any way out of the use of the information contained within this curriculum. Reference herein to any specific commercial products, process, or service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by the University of Illinois.

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PURPOSES FOR PARTICIPANTS • Know current minimum wages and exemptions • Become familiar with local and national campaigns to raise wages • Learn sources state by state information on minimum wage and tipped wages • Know provisions surrounding overtime laws • Know what classifies as paid work • Tell difference between legal and illegal deductions • Identify common methods of wage theft

ACTIVITIES 3-1. Who sets the wages? What influences how much you are paid? (10 min) Brainstorm and discuss to consensus 3-2. Minimum wages: Fight for 15 – Low-wage workers campaign for higher wages (15 min) Video and discussion 3-3. Overtime/Exemptions by law (15 min) Law, Q&A, discussion of personal experience 3-4. Paychecks: How to make sure you got what you earned (20 min) Comparison of sample complete/good paycheck and incomplete/bad paycheck 3-5. Wage theft role-plays (30 min or more) Brainstorm wage theft situations, role play wage theft, discussion HANDOUTS 3-1. The Union Difference – Weekly Earnings, 2014 3-2. Agricultural Workers 3-3. IDOL Poster 3-4. USDOL Minimum Wages by State, 2014-15 3-5. City of Chicago Minimum Wage Ordinance 3-6. Minimum Wage Mythbusters 3-7. Minimum Wage Buys Less Today Than in 1950 3-8. Aren’t You Tipped Off? 3-9. Overtime Exemptions – Federal and Illinois 3-10a. Understand your Paycheck! 3-10b. Bad Paycheck – What’s Wrong Here? 3-11. Limits on Businesses Using Payroll Cards to Pay Workers 3-12. Wage Payments and Collection Act (WPCA)

PREPARATION • Prepare flip chart paper forActivity 3-1 to post ideas about who sets wages and what influences pay. • Prepare flip chart paper forActivity 3-2 to post answers about minimum wage jobs and pay. • Prepare flip chart paper forActivity 3-4 to post payroll card discussion points. • Have video clips ready: • Activity 3-2. Low Pay is Not Ok https://www.youtube.com/watch?v=oy9JsppEJR8 • Activity 3-4. Watch Ida King www.youtube.com/watch?v=VdEUWK8VdAo

MATERIALS Flip chart paper Markers, pens Laptop with Internet access LED projector Photocopied handouts Index cards Tape USDOL calendars or other blank calendar pages RESOURCES NPR, Subminimum Wages For The Disabled: Godsend Or Exploitation? April 23, 2014. http://www.npr.org/2014/04/23/305854409/ subminimum-wages-for-the-disabled-godsend- or-exploitation Economic Policy Institute, It’s Time to Raise the Minimum Wage. April 23, 2015. http:// www.epi.org/publication/its-time-to-raise-the- minimum-wage/

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NEW WORDS Covered – Persons to whom a law applies. Exempt – Persons who are not covered by a particular law. Ex., the FLSA does not apply to managers with the right to hire and fire, professionals, or independent contractors. Fair Labor Standards Act (FLSA) – In 1938, Congress passed the Fair Labor Standards Act (FLSA) to establish minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, state, and local governments. The law effectively established an 8-hour work day and a 40-hour work week. Long Duties Test: An employee who meets the salary level tests (s/ he is paid more than $23,600 per year, or $455 a week) is exempt from overtime pay only if s/he also performs exempt job duties. These FLSA exemptions are limited to employees who perform relatively high-level work. There are three typical categories of exempt job duties, called “executive,” “professional,” and “administrative.” See http://www.flsa.com/coverage.html for more explanations of exempt job duties. Minimum wage – The lowest amount per hour an employer can pay a worker. The federal minimum wage is $7.25. Minimum wage levels vary by state, county, city, and even by occupation. Local and state governments have passed their own minimum wage laws. Overtime – Hours worked beyond the weekly limit, 40 hours, which are paid at one and a half times the regular hourly rate. If the hourly wage is $10/hour, the overtime wage would be $10 + $5 or $15/ hour. Most hourly employees are considered non-exempt employees under the Fair Labor Standards guidelines and must be paid at one and a half time the regular hourly rate for all hours worked over 40 in a given week. Wage – Amount of money paid to a worker per hour, day, per piece, or annually. Wage theft – Actions by an employer or employer’s representative to steal/keep earnings of a worker. Examples of wage theft include: not being paid for all of the hours worked; not being paid the legal minimum wage; not being paid overtime; illegal paycheck deductions including being charged for health and safety protective gear; not being paid benefits or time-off owed; not being compensated for costs associated with injuries or illnesses suffered on the job; and being misclassified as an independent contractor.

Copyright UIUC Labor Education Program, 2015 3-5 Workers’ Rights for Workforce Development Activity Who sets wages? What influences how much you are paid? (15 min) Brainstorm and come to consensus 3-1 Instructor asks the two questions above: • Who sets wages? • What influences how much you are paid? Write people’s answers on flip chart paper. See if any of the following points are missing. If so, add them. Answer any questions. Owners: Company owner sets wages. Wants to maximize profit. Needs to attract necessary skills. Company may have concerns about turnover, scarcity of qualified workers, competitors. Basic labor laws set limits and guidelines for wages. Historical conditions influence today’s wages. For example, farmworkers’ wages were not included in the Fair Labor Standards Act (FLSA) in 1938. To this day farmworkers have a difficult time organizing for higher wages, safe working conditions and the right to organize without retaliation. Workers: • Want to maximize wages and benefits. • May have to file complaint and seek help to get full wages they are entitled to. • Unions and workers’ organizations lead campaigns for higher wages. • Workers can increase their value by increasing skills and experience. (Photograph by Herald Post • Workers can trade off lower-entry pay in order to get experience/foot in the door for later promotion and wage increase.

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What’s the difference between a wage and a salary? A wage is an hourly pay rate. A salary is an annual pay rate for full-time work. Who protects workers’ wages? Fair Labor Standards Act and U.S. Department of Labor The U.S. Congress passed the Fair Labor Standards Act (1938) as part of President Franklin D. Roosevelt’s New Deal legislation to combat the Great Depression. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full- time and part-time workers in the private sector and in federal, state, and local governments. While the FLSA does set basic minimum wage and overtime pay standards and regulates the employment of minors, there are a number of employment practices that the FLSA does not regulate. For example, the FLSA does not require: • Vacation, holiday, severance, or sick pay • Meal or rest periods, holidays off, or vacations • Premium pay for weekend or holiday work • Pay raises or fringe benefits • A discharge notice, reason for discharge, or immediate payment of final wages to terminated employees http://www.dol.gov/whd/regs/compliance/hrg.htm You must be paid for all the time you work (but you might not get paid for all the time you’re at the workplace) It is illegal for employers to require unpaid work or free labor at the beginning, end or during the day. They also cannot require unpaid work in first days/weeks on the job in which you are learning the job. Amazon.com workers brought a suit charging that Amazon.com violates FLSA by not paying warehouse employees for time spent in security check line as they as they leave after their shift. Employees charged that the security check could take up to 25 minutes. A district court ruled in favor of the employees. Amazon appealed to the U. S. Supreme Court; the judges ruled in favor of Amazon.com, (Integrity Staffing Solutions v. Busk, December 2014), as reported in The Washington Post, a newspaper owned by Jeffrey Bezos, owner of Amazon.com.

http://www.washingtonpost.com/politics/courts_law/supreme-court- rules-amazon-doesnt-have-to-pay-for-after-hours-time-in-security- lines/2014/12/09/05c67c0c-7fb9-11e4-81fd-8c4814dfa9d7_story.html Wal-Mart employees introduced a dress code for employees (blue or white collared shirts, khaki pants or skirts and a Wal-Mart vest). Wal- Mart supplied the vest. Because this is not, legally, a uniform, Wal-Mart does not have to provide the tops and pants/skirts; employees must buy them. Employees protested the extra expense. http://www.huffingtonpost.com/2014/09/09/walmart-dress- code_n_5792224.html Paid work time includes: • Driving from your employer’s office to the worksite if you are required to arrive at the office before being sent to your assigned worksite • Putting on and taking off necessary safety equipment (“donning and doffing”) • Taking a break of less than 15 minutes • Training Other influences on wages Trainer makes these key points about current influences on wages: • Laws regulate and protect workers’ rights to minimum wage, tips, and eligibility for overtime and rights to final paycheck. 3-8 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection

• History – For over 100 years Chicago has been home to movements for the 8-hour day, child labor laws, and worker health and safety. • Inequality and discrimination hits many groups: Women earn 2/3 of what men earn. • Workforce trends: Increase of low wage service sector jobs (like retail, hospitality, food service and healthcare jobs). Increase of part-time jobs. Decline in union membership. New organizing is increasing, ex. Fight for 15, Warehouse Workers for Justice and workers’ centers. • Other kinds of protests by employees and shoppers, ex. walkout and boycott. Pass out Handout 3-1. The Union Difference – Weekly Earnings, 2014. Compare wages for different racial and ethnic groups. Exemptions from the FLSA Important groups of workers were left out of the Fair Labor Standards Act in 1938. This was done primarily as a favor to Southern Senators who would not pass the national bill if jobs held mostly by black workers in the South (domestic workers and farmworkers) were protected by the law. States followed by enacting their own wage laws. See Handout 3-2. Agricultural Workers. Today, workers that are exempt, or not covered, by the FLSA include: • Executive (power to hire and fire), administrative, creative and professional positions • Employees in computer related occupations • Employees of retail establishments paid on a commission basis • Farmworkers and other agricultural employees • Automobile salesmen • Truck drivers transporting goods in

commerce Photograph by Claudius Prober • Loaders of trucks transporting goods in commerce • Independent contractors

Labor History Notes THE 8-HOUR WORKDAY “8 hours for work, 8 hours for rest, 8 hours for what we will.” - Song from the 8-hour day movement*

How old is the 8-hour workday? responded to hunger marches, rent strikes, eviction protests and union organizing drives As far back as the early 1800s, American workers by passing national labor laws. The National organized and fought for a shorter workweek and Labor Relations Act (NLRA 1935) and the Fair workday. Working in mines and factories for 10-16 Labor Standards Act (FLSA 1938) established hours a day six days a week exhausted and sickened the rights of workers to organize unions, children, women and men. bargain collectively, earn a minimum wage, earn In 1886 labor unions struck in Chicago, a major overtime pay (time and a half) for work over 40 industrial center, for an 8-hour day. Business and hours a week, and ended most child labor. government retaliated. Eight men were framed and 2 executed, for an explosion in Haymarket Square Excluded workers during the 8-hour day demonstrations, but the 8-hour However, the new labor laws did not cover movement could not be stopped. Federal government all workers. The two largest groups not workers won an 8-hour day in the 1869. Over the covered were farmworkers and domestic labor. next 50 years, constant union organizing and strikes President Roosevelt made a deal with Southern pressed some states to pass 8-hour workday laws. Congressmen to exclude labor and domestic Unions in specific industries, such as mining and labor. Southern states, formerly slave states, still printing, won 8-hour days for their workers. depended on Black people as farmworkers and domestic labor. Southern Congressmen agreed During the Great Depression in the 1930’s, Congress

Mary Brogger, Haymarket Memorial, 2004. 175 N. Desplaines, Chicago. Source: Flickr user, ArtFan70

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Labor History Notes THE 8-HOUR WORKDAY

to support new union rights, higher wages and better working conditions, as long as the laws did not cover farmworkers and domestic labor. It took decades before farm and domestic workers were successful in earning the minimum wage. In 2015 domestic workers who care for elderly and people with disabilities also finally earned the right to overtime pay. Other domestic workers, such as house cleaners, do not yet have that right. Farmworkers are still fighting for overtime pay and other protections. Farm workers who work on small farms (less than seven workers) are still not covered under the FLSA. “Oh, you can’t scare me, I’m stickin’ to the union, I’m stickin’ to the union, till the day I die.” (from “Union Maid,” a song by Woody Guthrie)

Sources: *Estelle Carol, Rhoda Grossman and Bob Simpson, Chicago Comic Book Project, The Incredible Shrinking American Dream. An Source: Flickr user, Tobias Higbie. “The Dawn of a New Day”, cover, The Messenger, September Illustrated People’s History of the United States 1926. Two allegorical figures: a male labeled (1981) p.64 “the Brotherhood” (of Sleeping Car Porters) US Dept. of Labor and a female labeled “Education” hammer the chains of low wages, prejudice, and the Pullman http://www.dol.gov/whd/homecare/agencies- company union. The hammers are labeled what-are-requirements.htm “Truth” and “Union.” Farmworker Justice https://www.farmworkerjustice.org/advocacy- and-programs/us-labor-law-farmworkers

Handout 3-1. THE UNION DIFFERENCE – WEEKLY EARNINGS, 2014

Source: http://www.aflcio.org/Learn-About-Unions/What-Unions-Do/The-Union-Difference

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Handout 3-2. AGRICULTURAL WORKERS

Source: http://www.aflcio.org/Issues/Civil-and-Workplace-Rights/Your-Rights-at-Work

Copyright UIUC Labor Education Program, 2015 3-13 Workers’ Rights for Workforce Development Activity The minimum wage: Fight for 15 – low-wage workers campaign for higher wages 3-2 (15 min) Video and discussion Pre-video discussion questions Instructor asks participants questions below and charts their answers about wages and reasons for leaving. Who has worked a minimum wage job? What were you paid? If you left that job, why did you leave it? Show video https://www.youtube.com/watch?v=oy9JsppEJR8 Local-national-international demonstrations, Obama and others support higher minimum wage. (LowPayIsNotOkay.org) (5 min) Discussion questions Instructor asks participants: • What risks are minimum wage workers taking when they demonstrate and organize? • Why are they willing? • What are the results of this organizing? Ask participants if they know anyone who has been part of a campaign for raising the minimum wage. Ask them to share what they know happened. Ask class to read the headlines below about continuing increases in minimum wages at big retailers.

“Walmart Gives 500,000 Workers A Raise” Photograph by Elvert Barnes Huffington Post, February 19, 2015 http://www.huffingtonpost.com/2015/02/19/walmart- wage-raise_n_6712316.html Walmart announced it will raise the baseline wage of its current store employees to $10 per hour, bringing pay hikes to an estimated 500,000 workers…The decision follows similar moves by other major retailers such as Gap and IKEA, but the sheer size of Walmart

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A Walmart Supercenter in Albany. Photo: Wikipedia.

sets the company apart. The Arkansas-based retailer is the largest private- sector employer in the U.S., with an estimated 1.4 million employees, and it is largely seen as a trend-setter in the retail industry. “The profit motive behind Wal-Mart’s minimum wage hike” The Washington Post, February 19, 2015 http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/19/the- profit-motive-behind-walmarts-minimum-wage-hike/ It’s getting out ahead of laws that could force it to raise wages anyway -- and tamping down a union drive that would cause bigger problems down the road. “T.J. Maxx, Marshall’s to hike minimum wage for workers” CNN Money, February 25, 2015 http://money.cnn.com/2015/02/25/news/companies/tj-maxx-minimum-wage/ The owner of T.J. Maxx, Marshall’s and Home Goods is raising wages for its workers to at least $10 an hour sometime next year…The raises essentially match Wal-Mart’s plans to hike wages, which was announced last week. “Target Will Raise Minimum Wage to $9 Per Hour” Time, March 18, 2015 http://time.com/3749952/target-minimum-wage-nine-dollars/ “How McDonald’s and Wal-Mart Became Welfare Queens” Bloomberg News, November 13, 2013 http://www.bloombergview.com/articles/2013-11-13/how-mcdonald-s-and- wal-mart-became-welfare-queens

…the new welfare queens are even bigger, richer and less deserving of taxpayer support. The two biggest welfare queens in America today are Wal-Mart and McDonald’s. “Report: Walmart Workers Cost Taxpayers $6.2 Billion In Public Assistance” Forbes, April 15, 2014 http://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart- workers-cost-taxpayers-6-2-billion-in-public-assistance/ Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.

What is a minimum wage law? A law that regulates wages and minimum wages. The Fair Labor Standards Act (1938) set the federal minimum wage, which has been increased several times since 1938. The most recent increase was to $7.25 in 2009. Twenty-nine states and Washington D.C. have increased their minimum wage above the federal minimum wage. The Illinois minimum wage is $8.25 per hour. Employers in Illinois must pay the Illinois minimum wage, as it is greater. Employers are required to display a poster showing the current minimum wage. Photograph by Solidarity Center

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Handout 3-3. IDOL POSTER

Handout 3-4.(page 1) USDOL MINIMUM WAGES BY STATE, 2014-15 (Effective Date: 02/24/2015)

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Handout 3-4. (page 2) USDOL MINIMUM WAGES BY STATE, 2014-15

• The state minimum wage rate requirements, that is the same as the federal minimum or lack thereof, are generally controlled by wage requirement. The remaining 5 states legislative activities within the individual states. do not have an established minimum wage • Four states - Alaska, Arkansas, Nebraska and requirement. South Dakota - approved minimum wage • The District of Columbia has the highest increases through ballot measures in the 2014 minimum wage at $9.50/hour. The states election. of Georgia and Wyoming have the lowest • Federal minimum wage law supersedes minimum wage ($5.15/hour) of the 45 states state minimum wage laws where the federal that have a minimum wage requirement. minimum wage is greater than the state • Note: There are 10 states (AZ, CO, FL, minimum wage. In those states where the MO, MT, NJ, NV, OH, OR, and WA) that state minimum wage is greater than the have minimum wages that are linked to a federal minimum wage, the state minimum consumer price index. As a result of this wage prevails. linkage, the minimum wages in these states • There are 2 states than have a minimum are normally increased each year, generally wage set lower than the federal minimum around January 1st. The exception is Nevada, wage. There are 29 states plus DC with which adjusts in the month of July each year. minimum wage rates set higher than the Effective January 1, 2015, 9 of the 10 states federal minimum wage. There are 14 states increased their respective minimum wages. that have a minimum wage requirement The exception was Nevada.

Source: http://www.dol.gov/whd/minwage/america.htm#Consolidated Photograph by Faungg

Chicago Minimum Wage Cities can also create a minimum wage. Chicago has increased the local minimum wage on a payment schedule over time. In Chicago, the minimum wage per hour is:

*The ordinance provides that the minimum wage will not increase when the unemployment rate in Chicago for the preceding year, as calculated by the Illinois Department of Employment Security, was equal to or greater than 8.5 percent. The ordinance also provides that if the CPI increases by more than 2.5 percent in any year, the minimum wage increase shall be capped at 2.5 percent.

What are the consequences of raising the minimum wage? Those in favor would say that with more income, low-paid workers would be able to provide for their families better (food, clothing, rent, transportation, and health care.) They would contribute to the economy by spending their greater income and benefits at stores and service providers. Opposition to raising vthe minimum wage Who opposes raising minimum wages? Many employers and their organizations, like the Chamber of Commerce and industry-specific groups, like the National Restaurant Association seek allies in state and national government for keeping minimum wages low. “Worker wages: Wendy’s vs. Wal-Mart vs. Costco” CNN Money, August 6, 2013 http://money.cnn.com/2013/08/06/news/economy/costco-fast-food-strikes/ Can a company pay its workers well and also make money? Many aren’t quite hitting the right balance. Hundreds of dissatisfied workers at major American companies like Wal-Mart (WMT), McDonald’s (MCD) and Wendy’s (WEN) have joined protests nationwide in the past year demanding higher wages and better benefits. 3-20 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection

One company that hasn’t had to deal with such strikes is Costco. The no-frills warehouse chain pays its hourly workers an average of just over $20 an hour, compared to just under $13 at competitor Wal-Mart. Even President Obama praised Costco in a recent speech about helping the middle class. The recession has been good for companies that targeted budget-minded customers. Sales at Costco (COST) have grown an average of 13% annually since 2009, while profits have risen 15%. Its stock price has more than doubled since 2009. During the same period, discount retailer Wal-Mart’s sales grew an average of 4.5% each year, profits rose 7%, and its stock price increased 70%. Costco seems to be investing some of those profits back into its employees. Minimum Wage Mythbusters. The U.S. Department of Labor published a useful reply to common arguments against increasing the minimum wage. Pass out Handout 3-6. Minimum Wage Mythbusters by the US Department of Labor. Ask class to read over one or two pages of the handout Minimum Wage Mythbusters. Ask people to share one argument they find convincing. Ask for any questions. • Is the minimum wage worth today what it was in 1950? • Does increasing the minimum wage increase or decrease the number of jobs? • Is it likely to increase the price of cup of coffee or food in the grocery store? • Is a higher minimum wage good or bad for business? Photo by David Tan

How much does the minimum wage buy? Does it keep up with inflation? Pass out Handout 3-7. Minimum Wage Buys Less Today Than in 1950. Ask class to explain the illustration. Summarize: Essentially, the minimum wage is not indexed to the cost of living, so it does not rise as the cost of living rises. (For example, by law, Social Security does rise with the cost of living.) Today’s minimum wage can buy less than in 1950, 65 years ago. Tipped minimum wage Tipped workers, like restaurant workers, often have more difficulty getting paid what they earn. The national tipped wage has been $2.13 per hour since 1991. Some states’ tipped wages are higher. Tipped workers are supposed to receive enough in tips, together with their tipped minimum wage, to make at least their state’s minimum wage. For example, • Illinois: $4.95 min tipped wage + $3.30 tips = $8.25 min wage • Chicago 2015: $5.45 min tipped wage + $4.55 tips = $10.00 min wage (July 1, 2015) • Chicago 2016: $5.95 min tipped wage + $4.55 tips = $10.50 min wage Tips. Situations for tipped workers vary from one restaurant or bar to another. Tips put on credit cards may not get to the waitress/waiter. Tips left on the table may be put in a common bowl for the boss to divide among the workers. Often waiters’ tips are supposed to be shared with busboys, but busboys may be ignored. The boss may give workers less in tips than they are owed. The boss may even steal the tips and take them for himself. By law, bosses and managers cannot receive any tips. Pass out and ask people to review Handout 3-8. Aren’t You Tipped Off? Seven states have passed laws to eliminate the tipped minimum wage and add food service workers to those covered by state minimum wage laws. New York is now the site of a concerted campaign, One Fair Wage, by Restaurant Opportunities Centers (ROC) United, to eliminate the tipped wage and make the minimum wage the same for all workers. A new report* finds up to 90 percent of women working restaurant jobs that depend on tips have experienced workplace sexual harassment. More than 70 percent of tipped workers are women, and female restaurant workers are especially vulnerable to harassment in states where tipped workers earn a federal minimum wage of $2.13 per hour.

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* The Glass Floor: Sexual Harassment in the Restaurant Industry. Restaurant Opportunities Center United (2014). Other Sub-Minimum Wages Young Workers and New Employees In Illinois, workers under the age of 18 can be paid 50 cents less per hour, or $7.75 per hour. All hourly employees age 18 and older can be paid 50 cents less per hour during their first 90 days at a new employer. This wage is considered a “training” wage and cannot be paid to temporary or day laborers. “Learners” In Illinois, with permission from the Illinois Department of Labor, an employer can pay a “learner” $5.77 an hour (70% of the regular minimum wage), for a maximum of 6 months. With special permission, the learner subminimum can extend beyond 6 months. A learner license is obtained for specified, named employees. It’s not an all-purpose permit to pay a subminimum wage to whoever comes along. A learner license also requires an employer to show that they have “a bona fide training program,” which can’t be for “acquiring manual dexterity and high production speed in repetitive operations.” Workers with Disabilities Section 14(c) of the FLSA authorizes employers, after receiving a certificate from the DOL Wage and Hour Division, to pay special minimum wages – wages less than the Federal minimum wage – to workers who have disabilities for the work being performed. A worker who has disabilities for the job being performed is one whose earning or productive capacity is impaired by a physical or mental disability, including those relating to age or injury. Disabilities that may affect productive capacity include blindness, mental illness, intellectual disability, cerebral palsy, alcoholism and drug addiction. The following, taken by themselves, are not considered to be disabilities for purposes of paying special minimum wages: education disabilities, chronic unemployment, receipt of welfare benefits, nonattendance at school, juvenile delinquency, and correctional parole or probation. Section 14(c) does not apply unless the disability actually impairs the worker’s earning or productive capacity for the work being performed. The fact that a worker may have a disability is not in and of itself sufficient to warrant the payment of a special minimum wages. Illinois employers can obtain licenses to pay subminimum wages to “impaired” workers for up to one year. The subminimum wage for “impaired” workers can be as low as the Illinois Department of Labor approves.

Handout 3-5. CITY OF CHICAGO MINIMUM WAGE ORDINANCE

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Handout 3-6. (page 1) MINIMUM WAGE MYTHBUSTERS

Myth: Raising the minimum wage will only benefit teens. Not true: The typical minimum wage worker is not a high-school student earning weekend pocket money. In fact, 88 percent of those who would benefit from a federal minimum wage increase are age 20 or older, and 55 percent are women. Myth: Increasing the minimum wage will cause people to lose their jobs. Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016. Myth: Small business owners can’t afford to pay Association projects California restaurant sales their workers more, and therefore don’t support will outpace the U.S. average in 2014. an increase in the minimum wage. Myth: Raising the federal tipped minimum Not true: A June 2014 survey found that more wage ($2.13 per hour since 1991) would lead than 3 out of 5 small business owners support to restaurant job losses. increasing the minimum wage to $10.10. Small Not true: Employers in San Francisco must business owners believe that a higher minimum pay tipped workers the full minimum wage wage would benefit business in important ways: of $10.74 per hour – before tips. Yet, the San 58% say raising the minimum wage would Francisco restaurant industry has experienced increase consumer purchasing power. 56% positive job growth over the past few years say raising the minimum wage would help the according to the Bureau of Labor Statistics. economy. In addition, 53% agree that with a higher minimum wage, businesses would Myth: Raising the federal minimum wage benefit from lower employee turnover, increased won’t benefit workers in states where the productivity and customer satisfaction. hourly minimum rate is already higher than the federal minimum. Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt Not true: Only 23 states and the District of restaurants. Columbia currently have a minimum wage higher than the federal minimum, meaning a majority of Not true: In California, employers are required states have an hourly minimum rate at or below to pay servers the full minimum wage of $9 per the federal minimum. Increasing the federal hour - before tips. Even with a recent increase minimum wage will boost the earnings for some in the minimum wage, the National Restaurant 28 million low-wage workers nationwide. That

Copyright UIUC Labor Education Program, 2015 3-25 Workers’ Rights for Workforce Development Handout 3-6. (page 2) MINIMUM WAGE MYTHBUSTERS

includes workers in those states already earning above the current federal minimum. Raising the federal minimum wage is an important part of strengthening the economy. A raise for minimum wage earners will put more money in more families’ pockets, which will be spent on goods and services, stimulating economic growth locally and nationally. Myth: Younger workers don’t have to be paid the minimum wage. Not true: While there are some exceptions, employers are generally required to pay at least the federal minimum wage. Exceptions allowed include a minimum wage of $4.25 per hour for young workers under the age of 20, but only during their first 90 consecutive calendar days of employment with an employer, must make up the difference. Some states and as long as their work does not displace have minimum wage laws specific to tipped other workers. After 90 consecutive days of employees. When an employee is subject to employment or the employee reaches 20 years both the federal and state wage law, he or she of age, whichever comes first, the employee is entitled to the provisions of each law that must receive the current federal minimum provides the greater benefits. wage or the state minimum wage, whichever Myth: Only part-time workers are paid the is higher. There are programs requiring federal minimum wage. certification that allow for payment of less than the full federal minimum wage, but those Not true: About 53 percent of all minimum programs are not limited to the employment of wage earners are full-time workers, and young workers. minimum wage workers contributed almost half (46 percent) of their household’s wage and Myth: Restaurant servers don’t need to be salary income in 2011. Moreover, more than paid the minimum wage since they receive tips. 88 percent of those who would benefit from Not true: An employer can pay a tipped raising the federal minimum wage from $7.25 employee as little as $2.13 per hour in direct to $10.10 are working adults, and 55 percent wages, but only if that amount plus tips equal are working women. at least the federal minimum wage and the Myth: Increasing the minimum wage is bad for worker retains all tips and customarily and businesses. regularly receives more than $30 a month in tips. Often, an employee’s tips combined with Not true: Academic research has shown the employer’s direct wages of at least $2.13 that higher wages sharply reduce employee an hour do not equal the federal minimum turnover, which can reduce employment and hourly wage. When that occurs, the employer training costs. 3-26 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection

Handout 3-6. (page 3) MINIMUM WAGE MYTHBUSTERS

Myth: Increasing the minimum wage is bad for the economy. Not true: Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has steadily increased, even when the minimum wage has been raised. Myth: The federal minimum wage goes up automatically as prices increase.

Not true: While some states have enacted rules Photo by JJ in recent years triggering automatic increases in their minimum wages to help them keep up with inflation, the federal minimum wage does not operate in the same manner. An increase in the federal minimum wage requires approval by Congress and the president. However, in his call since February 2013 when President Obama first to gradually increase the current federal minimum called on Congress to increase the minimum wage wage to $10.10 per hour, President Obama has have consistently shown that an overwhelming also called for it to adjust automatically with majority of Americans support an increase. inflation. Eliminating the requirement of formal congressional action would likely reduce the Myth: Increasing the minimum wage will result amount of time between increases, and better help in job losses for newly hired and unskilled low-income families keep up with rising prices. workers in what some call a “last-one-hired- equals-first-one-fired” scenario. Myth: The federal minimum wage is higher today than it was when President Reagan took office. Not true: Minimum wage increases have little to no negative effect on employment as shown Not true: While the federal minimum wage in independent studies from economists across was only $3.35 per hour in 1981 and is currently the country. Academic research also has shown $7.25 per hour in real dollars, when adjusted for that higher wages sharply reduce employee inflation, the current federal minimum wage would turnover, which can reduce employment and need to be more than $8 per hour to equal its training costs. buying power of the early 1980s and more nearly $11 per hour to equal its buying power of the Myth: The minimum wage stays the same if late 1960s. That’s why President Obama is urging Congress doesn’t change it. Congress to increase the federal minimum wage Not true: Congress sets the minimum wage, and give low-wage workers a much-needed boost. but it doesn’t keep pace with inflation. Because Myth: Increasing the minimum wage lacks public the cost of living is always rising, the value of support. a new minimum wage begins to fall from the moment it is set. Not true: Raising the federal minimum wage is an issue with broad popular support. Polls conducted Source: http://www.dol.gov/minwage/mythbuster.htm

Handout 3-7. MINIMUM WAGE BUYS LESS TODAY THAN IN 1950

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Handout 3-8. AREN’T YOU TIPPED OFF? Minimum Wage for Tipped Workers by State

Source: http://www.dol.gov/minwage/infographics/20140331-tippedoff.htm

Copyright UIUC Labor Education Program, 2015 3-29 Workers’ Rights for Workforce Development Activity Overtime and exemptions from overtime (15 min) Law, Q&A, discussion of personal 3-3 experience Overtime Most hourly employees who work more than 40 hours a week are entitled to overtime pay for the extra hours. One hour of overtime pay equals one and one half times your regular hourly wage. For example, an employee earning $10.00 per hour should be paid $15.00 per hour for every hour over 40 hours worked during the course of a week. Salaried employees, who are not exempt, are also entitled to overtime pay. Instructor asks andwrites answers on flip chart paper • Who has worked overtime? Were you paid more for overtime? Paid fully? • If not, did you do anything about it? What happened? • What are your rights? Who’s exempt from overtime provisions? (Depends what your duties are.) • Have you ever been a manager, but spent a lot of time on the production line (ex. McDonald’s manager)? • How do employers cheat on overtime?

“Obama Orders Rule Changes to Expand Overtime Pay” New York Times, March 14, 2014 President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the Labor Department on Thursday to revise federal rules on overtime pay to make millions more workers elegible for overtime See Handout 3-9. Overtime Exemptions – Federal and Illinois Instructor asks class to call out different forms of wage theft and continues to add to the list throughout the training. Examples of wage theft include: • Not being paid overtime • Not being paid for all of the hours worked • Not being paid the legal minimum wage

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• Illegal paycheck deductions including being charged for health and safety protective gear • Not being paid benefits or time-off owed • Not being compensated for costs associated with injuries or illnesses suffered on the job • Being misclassified as an independent contractor

Handout 3-9 OVERTIME EXEMPTIONS – FEDERAL AND ILLINOIS

Criteria for determining who is exempt and non exempt from overtime in Illinois Comparing the Salary and Duties test

This chart is for guidance only. Each individual matter must be examined on a case-by-case basis. Employers may be subject ot both the federal and state overtime regulations.

Source: https://www.illinois.gov/idol/laws-rules/fls/pages/overtime-exemption.aspx

3-32 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection Activity Paychecks: How to make sure you got what you earned (20 min) Group discussion; video and discussion 3-4 Instructor passes out Handout 3-10a. Understand your paycheck! Handout 3-10b. Bad Paycheck – What’s Wrong Here? Ask participants to review the information on the Garden Supply Co. paycheck as well as the bad paycheck. Make notes about anything you don’t understand. Then report back to the class. Basic paycheck deductions Federal wage law requires that your employer deduct from each paycheck: • Estimated income tax • Estimated Social Security payment The employer contributes an equal amount to your Social Security payment. Your actual time employed, as indicated by Social Security contributions, accumulates during your life toward the amount you will get when you retire. Your employer usually cannot make additional deductions from your pay unless you agree to them in writing. The U.S. Department of Labor makes it illegal for your company to charge you for any safety equipment that it requires you to use in order to work safely. For example, your employer must pay for gloves, goggles, uniforms, or any other equipment essential to job safety. Paycheck irregularities Sometimes employees are paid in cash, in one large sum or are paid late. Unfortunately that is usually not illegal unless you and your employer have a written agreement for a regular paycheck in a specific format. Try to avoid that situation. When you are hired, ask when and how you will be paid. Collecting unpaid wages By law you can collect wages that are owed to you. Often you will need help. Ask advice from a union if you are in one, a workers’ center, a state Department of Labor or a lawyer.

Documentation As we discussed in Unit 2, be sure you are keeping a written record of your pay. With the information below, you will know if your paycheck is accurate. You also will have evidence for a claim for full pay. • Dates, days and hours you worked • Your wage rate • Your overtime rate • Number of hours you worked each day • Date you were paid • How you were paid—in cash or check • How much you were paid

Also keep basic information about your employer and supervisor: • Your employer’s and supervisor’s full name(s) • Name, address, and telephone number of the company and worksites • Car license plates (if you work for an individual or a company without a formal office) Keep copies of pay stubs, time cards, and work schedules if you have them in your Job Documents folder, as we discussed in Unit 2. These records may be needed to file a claim against your employer if you are owed unpaid wages. Make use of USDOL calendar or other calendar to record hours, breaks, and off-the-clock work performed. What workers need to know about payroll cards (10 minutes) Legal information: Effective January 2015, under a new provision of the Illinois Wage Payment & Collection Act HB 5622(820 ILCS 115/1), employers may NOT require workers to receive their wages on a payroll card. Workers have the legal right to have their wages directly deposited into a bank or credit union account or other account of their choosing. A bank or credit union can offer more consumer protections and ability to access and transfer money without fees than payroll cards. Instructor asks questions below and writes answers on flip chart. 1. What are the various ways in which workers receive their wages? (Cash, check, direct deposit, payroll card, other?) 2. Has anyone ever been paid with a payroll card? Did you like it? Why or why not? 3. What did you learn? Show the video Watch Ida King (1:30). www.youtube.com/watch?v=VdEUWK8VdAo

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In the video Ida King tells her story about high payroll card charges at the Chicago ceremony and press conference where Governor Quinn signed HB 5622 into law on August 6, 2014. Ida King says: “I am a Head Start Ambassador, a member of the POWER-PAC Parents, a mother of three, and a grandmother of three. I used to work for a company that required me to get my wages on a payroll card. I didn’t know anything about payroll cards at the time. I was charged a lot of fees for using the payroll card, ranging from fifty cents to two dollars. The fees were [for things like cash withdrawals, balance inquiries, and] even for customer service calls when I called to ask what all these fees were about! I wasn’t making that much money and I needed all that money. … Now, [with the protections of the new law], workers will have relief from payroll cards because they have the choice to opt out and be able to avoid those fees.” Where should a worker go to complain about a payroll card law violation? Go to the Illinois Department of Labor (see Handout 2-7. Government Agencies). You may also contact Illinois Attorney General Office, Jane Flanagan, Labor Counsel, James R. Thompson Center, 100 W. Randolph St., Chicago, Illinois 60601. “Quinn signs payroll card legislation backed by AG” Payroll cards allow workers to withdraw salaries from an ATM, like debit cards. But Illinois Attorney General Lisa Madigan, who backed the legislation, said her office had received complaints about extra fees that were cutting into salaries. Madigan said minimum wage workers were among those affected. The law, which says workers should be offered other options like paper checks, takes effect January 2015. Read more: http://www.washingtontimes.com/ news/2014/aug/6/quinn-signs-payroll-card- legislation-backed-by-ag/#ixzz3YeoE4Jyr Legal limits on businesses using payroll cards to pay workers are explained in Handout 3-11. Photograph by iStockPhoto Ask participants to read this at home.

*Activity adapted from Alvin. A. Realuyo, Marsha Love, Bob Mendelson, Shirley Lew. “How Make Sure You Got What You Worked For” New York: Consortium for Worker Education, Education Department (1999).

Handout 3-10a. (page 1) UNDERSTAND YOUR PAYCHECK!

Exercise your right to get what you have Making Sense out of Your Pay Stub earned. Even though paychecks are often Definitions: computerized these days, computers can still • Base Rate = hourly wage make mistakes. Here’s how to figure out if you • City W/H Tax = (withholding) the amount are being paid correctly. Look over your pay taken out for city taxes stub! Your pay stub will also tell you important information such as: • Current = weekly deductions and pay • Deductions = amount of money taken out of • How much you are paying in taxes your pay for taxes, medical insurance, etc. • How much Social Security you are earning. • Disability = money take out for insurance in Where to start case you become too sick or injured to work 1. Make sure the gross pay is correct. Gross pay • EM# = your payroll identification number is wages for the pay period. It’s the amount • F.I.C.A. (Federal Insurance Contribution Act) = of money before taxes and other deductions the tax taken out for Social Security have been taken out. Look to see that the • Federal W/H Tax = the amount taken out hours Pedro worked are correct. Was Pedro (withheld) for federal taxes sick or on vacation? If he worked overtime, was that included? • Gross Pay = the amount of money earned during the pay period before taxes were taken 2. Add up the deductions. Deductions are out the amount of money taken out for taxes, medical insurance, Social Security, etc. Are • Net pay = the amount you took home; it is the the deductions correct? gross pay minus deductions 3. Make sure your social security number is • SS# = Social Security number correct on your own paycheck. Otherwise • State W/H Tax = the amount taken out for you could have trouble with the Internal state taxes Revenue Service (IRS) at tax time. • YTD = (Year to Date) the total amount of 4. If you don’t understand something in your earnings and deductions so far this year paycheck or if you think something is wrong, On page 2 of Handout 3-10a is a sample pay ask your employer’s Payroll or Human stub for an employee at Garden Supply, Inc. Pedro Resources Department to explain it. started working on 2/1/15.

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Handout 3-10a. (page 2) UNDERSTAND YOUR PAYCHECK! Here is a sample pay stub for an employee at Garden Supply, Inc. Pedro started working on 2/1/15.

Handout 3-10b. BAD PAYCHECK – WHAT’S WRONG HERE?

There is a violation: 16 hours of the 96 hours worked were overtime. They were not paid at time-and-a- half.

Source: Arise Chicago Worker Center

3-38 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection

Handout 3-11. LIMITS ON BUSINESSES USING PAYROLL CARDS TO PAY WORKERS

Employers may not pay wages by payroll at a location readily available to the employee; card UNLESS the employer: • At the employee’s request, one transaction • Provides the employee with a clear written history in paper or electronic form each month; disclosure notifying the employee that and unlimited telephone access to obtain the payment by payroll card is voluntary, account balance at any time without incurring listing other methods of payment offered, a fee; and and explaining the terms and conditions, • A declined transaction, at no cost to the including an itemized list of all fees; employee, twice per month. • Also offers another method of payment; and The payroll card program may NOT: • Obtains the employee’s voluntary written • Charge fees for point-of-sale transactions, the or electronic consent. An employee paid application, initiation or loading of wages by by payroll card may request to be paid by the employer, or participation in the payroll another method and, if requested, the card program; employer must switch to the other payment • Charge inactivity fees unless the account has method within two pay periods. been inactive for one year; or The payroll card program must provide: • Be linked to any form of credit, including • At least one method of withdrawing the but not limited to overdraft fees or overdraft employee’s full net wages from the payroll service fees, a loan against future pay, or a cash card once per pay period, but not less than advance on future pay or work. twice per month, at no cost to the employee, Source: (820 ILCS 115/1) Photograph by iStockPhoto

Role-plays on wage theft Activity (30 min) Short talk. Role play and discussion Instructor asks for volunteers to read aloud the article excerpt below. Asks 3-5 group, “What’s wrong here? What could these workers do?” (5 min) Another Republic Windows? Patisserie workers fight alleged wage theft, firing Chicago Muckrakers, January 11, 2012 For Deyanira Alvarez, Rolf’s Patisserie was like a second home. Not only were both her mother-in-law and brother-in-law employed there, the 25-year-old had been working at the bakery for four years. She wasn’t the only one--there were entire families working at Rolf’s in Lincolnwood. Those families got some unexpected and unfortunate news just days before Christmas. On Friday, Dec. 10, they were told that the factory would be closed for the weekend for cleaning, but they should report to work Monday. But the real story was that the plant was closed for good. The workers--134 in all--were fired from Rolf’s. And when their last paychecks bounced, and their banks and credit unions began to levy fees against them, the money began to add up… “It was a total shock to everybody, and we honestly didn’t expect anything like our checks to be bounced,” said Alvarez, a former customer service representative at Rolf’s. “We want to let other people know they have every right in the world to get what they earn.” When factory president Lloyd Culbertson showed up at the plant on Friday, he asked the production manager to log him into the company website and then asked him to leave the room. Just 30 minutes later, the employee checked the site, and saw the following:

3-40 Copyright UIUC Labor Education Program, 2015 UNIT 3 – Wage and Hour Laws and Protection http://www.chicagonow.com/chicago-muckrakers/2012/01/another- republic-windows-patisserie-workers-fight-alleged-wage-theft-firing/ Wage theft – How does the boss keep my pay? Short talk. Instructor makes these points: Wage theft, or non-payment of wages, is illegal. If your employer refuses to pay you the wages you are owed, s/he is violating federal and state wage laws. You have the legal right to be paid for your work regardless of your documentation status. You may file a claim for payment with the U.S. Department of Labor or the Illinois Department of Labor. If you are successful, employers can be charged with a misdemeanor offense, fines and/or other penalties in addition to being required to pay unpaid wages you are owed. Instructor asks group what are common ways employers steal workers’ wages. Charts answers on posted wage theft chart. • Fail to pay overtime • Violate minimum wage laws • Misclassify employees • Take illegal deductions from paychecks • Require workers to work for no pay, or “off the clock” • Steal workers’ tips • Not pay workers for training • Not pay out or allow accrued vacation/sick time • Pay with checks that bounce • Suddenly close a business without paying a final check (Rolf’s Patisserie) Minority workers, undocumented workers, and women are especially vulnerable (see Handout 1-2. Workplace Violations Fact Sheet.) Certain industries maintain a culture of wage theft (car washes, temp work, non- union construction, domestic work). Pass out Handout 3-12. Illinois Department of Labor Wage Collection and Payment Act. Ask participants to read at home and keep in their Work Documents folder. Role-play Participants work in small groups to act out scenes listed below or ones the group writes. Remind groups to include documenting activity, like collecting evidence, while they are solving their situation with other workers. Possible scenarios: • CNC machinist discovers she is being paid less than her male coworker who has the same job; talks with a coworker about what to do.

• Server has a conversation with supervisor about having to share tips with him; informs him of the illegal practice and asks for back pay. • A group of grocery store workers meet at a worker center to discuss not being paid overtime; group considers possible legal actions as well as organizing campaign to put pressure on employer. Small groups consider: • What could you say to persuade other employees to help you? • Which of your co-workers are most vulnerable? Which are most likely to help you? Why? • What resources could you get? Where else could you get help? • What actions could you take? • What are key reasons that stop people from protesting wage theft?

DIRECTIONS for role-play: • Use cards with name of character. Tape card on shirt. • 3-5 minutes to set up role-play and who’s playing characters. • 5 minutes to do role-play. During the role-play, other group members may get up and take on a role. Photograph by iStockPhoto

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Handout 3-12. (page 1) WAGE PAYMENT AND COLLECTION ACT (WPCA)

Handout 3-12. (page 2) WAGE PAYMENT AND COLLECTION ACT (WPCA)