Letter: Employees are being exploited
Working people of the Roaring Fork Valley should applaud the recent actions of the U.S. Department of Labor. Its findings of unpaid overtime for employees in 39 businesses is likely only the tip of the iceberg.
Valley employees should be aware that if a combination of base rate (tipped employees usually receive a very small hourly rate) plus reported tips do not exceed the federal minimum wage for the week worked, they are to receive at least the minimum wage of $7.25 an hour for the week’s hours. More than 40 hours in a week must receive an equivalent minimum of $10.88 an hour for hours and reported tips. Employees also should be aware that the Colorado minimum wage is $8 an hour ($12 an hour for overtime).
During the 40 years I have lived and worked in the Roaring Fork Valley (30 of those years in human resources and payroll), I have seen or heard of countless employers in service businesses and construction who have knowingly flouted or ignored labor law. Some of the most common:
• Ignoring overtime rules and only paying straight time.
• Operating without workers’ compensation coverage.
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• Switching employees to be “independent contractors” during periods when profitability must be enhanced (shifting the FICA/Medicare deductions and employer match to employees and giving no workers’ comp coverage).
• Making employees “salaried” and considering them exempt from overtime, even when these employees do not meet the Fair Labor Standards Act definition of exempt from overtime.
• Knowingly hiring illegal workers (yes, those lovely European, Aussie/Kiwi/Canadian accents, too) because they are less likely to protest being shorted overtime or benefits.
Most quality payroll software programs can be programmed to make what are called “tip credit” calculations to assure that actual minimum wage is being paid to a tipped employee. They also can be programmed to assure that legal overtime (in Colorado, it’s more than 40 hours in a week) is paid to employees. Failure to do this is a conscious oversight on the part of an employer.
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