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Wage-and-hour problems are about to get uglier for corporate America. Employers, already battling a rash of private lawsuits, are bracing for yet more scrutiny over their pay practices in light of a new report that shows wage-and-hour violations are running rampant in the workplace. The 72-page report, released on Sept. 1, is just one blow to employers as the U.S. Department of Labor has recently announced that it is hiring 250 additional investigators to snare wage-and-hour scofflaws. According to this latest report, there are plenty of them. The study, which surveyed more than 4,000 workers in low-wage industries in New York, Los Angeles and Chicago, found that “employment and labor laws are regularly and systematically violated.” It estimated that in a given week, approximately 1.1 million workers in the three cities combined have at least one pay-based violation and that front-line workers in low-wage industries lose more than $56.4 million per week as a result of employment and labor law violations. The report, titled Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, was based on face-to-face interviews with workers in the three cities. It was published by the Center for Urban Economic Development at the University of Illinois at Chicago, the National Employment Law Project and the UCLA Institute for Research on Labor and Employment. Among the study’s findings:

• 76 percent who had worked overtime the previous week were not paid time-and-a-half for it. • 26 percent were being paid less than the minimum wage. • More than 75 percent of those interviewed earned less than $10 an hour. • More than 2/3 (69 percent) of workers who were entitled to a meal break received no break at all, had their break shortened, were interrupted by their employer or worked during the break. • Of the tipped workers in the study, 30 percent were not paid the tipped-worker minimum wage; another 12 percent of tipped workers experienced tip stealing by their employer or supervisor. • One in five workers reported that they had made a complaint to their employer or attempted to form a union in the last year. Of those, 43 percent experienced some form of retaliation, from being fired to being threatened with a pay cut or a call to immigration authorities.

So who exactly is breaking all these laws? “The violations were not limited to just a few rogue employers or to one or two sectors. We found them in virtually every major industry in urban economies,” said Annette Bernhardt, co-author of the report and policy co-director at the National Employment Law Project, a workers’ rights advocacy group. The study found that minimum wage violation rates were most common in apparel and textile manufacturing, personal and repair services, and private households. Violation rates were substantially lower in residential construction, social assistance and education, and home health care. Women were significantly more likely than men to experience minimum wage violations, and foreign-born workers were nearly twice as likely as their U.S.-born counterparts to have a minimum wage violation, according to the report. Bernhardt noted that the study’s authors did find employers in low-wage industries that were following the law. Trouble is, she added, there are still too many that don’t. “We absolutely hope that this study will help to support the case for the DOL to take up the reins again and enforce these laws,” she said. The top official at the DOL was troubled by the report’s findings and agreed that stepped-up-enforcement is needed. “I am especially troubled by the report’s findings that ‘employment and labor laws are regularly and systematically violated.’ Our workers deserve — and need — far better than that. In fact, it’s precisely why stronger enforcement remains at the top of my agenda,” Secretary of Labor Hilda Solis said in a statement. Poppycock, countered management-side attorney Charles Caulkins, a partner in the Ft. Lauderdale, Fla., office of Atlanta’s Fisher & Phillips, who is aghast over the government giving this latest report any weight. Caulkins blasted the study’s findings, saying the sample of employees interviewed was too narrow, and criticized the report as being too one-sided. He also said the study was largely backed by groups that advocate for employees and organized labor. “This is an unfair conclusion that employers are grossly violating employment and labor laws. They’re not,” Caulkins said. “What’s unfortunate, particularly in today’s economy, is to hear that the federal government is going to use information like this to justify enforcement actions.” Caulkins believes the report’s authors are unfairly “siccing the federal government” on small employers. “That’s exactly what this report is suggesting. It’s telling the federal government to go after these companies,” he said. Management-side attorney Thomas Linthorst, a partner in the Princeton, N.J., office of Morgan, Lewis & Bockius, offered similar sentiments. “Most employers — certainly those I’m dealing with — are trying to comply with the law,” he said. Because the increased enforcement efforts from the Labor Department and this latest study have put the bull’s-eye on wage-and-hour violations, Linthorst warned employers to be on alert. “The DOL may show up on your door with little or no notice and start asking for information and to see documents. And employers that haven’t internally examined these issues may find themselves really paying catch-up,” he said.

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