Friday, May 23, 2014

Connecticut Leads Nation in Raising Minimum Wage to $10.10

On March 27, 2014, Connecticut Governor Dannel Malloy signed Senate Bill 32, now known as Public Act 14-1, which gradually increases Connecticut’s minimum hourly wage to $10.10 over the next three years. Currently, Connecticut’s minimum wage is $8.70 per hour, but this amount will increase to $9.15 per hour on January 1, 2015; $9.60 per hour on January 1, 2016, and $10.10 per hour on January 1, 2017. 

            This past March, President Barack Obama visited Connecticut to advocate for raising the federal minimum wage to $10.10.  Considering the partisan divide in Washington, it is unlikely that Congress will act on this. Connecticut is the first state to respond to Obama’s call to action.  Advocates for this legislation have said that it will help working families and will stimulate the economy by providing additional funds to people who spend their money locally; whereas opponents of the Act have cautioned that it could slow hiring at a time of already high unemployment.

            The Act also effectively raises the minimum wage for tipped employees, such as hotel staff, wait staff, and bartenders, who may currently have a percentage of their tips counted towards their hourly income. Employers are allowed to count some employees’ tips as a percentage of their hourly minimum wage, which results in employers paying a smaller portion of the employees’ required minimum wage as long as the employees’ tips make up the difference. Presently, for hotel and wait staffs, employers are required to pay their employees $5.69 per hour, which will increase to $5.78 in 2015, $6.07 in 2016, and $6.38 in 2017. Similarly, bartenders who are now receiving $7.34 per hour exclusive of tips will receive $7.46 in 2015; $7.82 in 2016; and $8.23 in 2017.        

            In addition, the Act enables employers to pay learners, beginners, and employees younger than 18 years of age an hourly rate equal to 85% of the required minimum wage for an employee’s first 200 hours of employment. Thus, the required minimum wage for learners and beginners will increase from $7.40 to $7.78 in 2015; $8.16 in 2016; and $8.59 in 2017. 

            Attorney David Rintoul has experience handling wage and hour claims, and defending employers against Department of Labor Wage and Hour Audits, and can work with you to ensure compliance with this new legislation. 

Monday, May 12, 2014

ClearEdge Power Employee Files Class-Action Lawsuit

A former Connecticut employee filed a class-action lawsuit against ClearEdge Power alleging that the company failed to give the required 60-day notice before the company laid off 268 of its employees last week. Instead, the company issued a letter to its employees explaining that giving more notice would have prevented the company from finding new investors and customers and would have made it more difficult to collect payments from existing customers.

The Worker Adjustment and Retraining Notification Act (WARN) is a federal law, administered by the Department of Labor, that requires employers to provide their employees with 60 calendar days notice of plant closings and mass layoffs. WARN applies to employers with 100 or more employees. The advanced notice requirement is intended to give employees and their families time to transition to the loss of employment and time to find new jobs.

WARN does contain exceptions for faltering companies and companies that encounter unforeseen business circumstances. ClearEdge Power maintains that under these exceptions, it provided its employees with as much notice as possible, given the company’s circumstances.

Although the class-action has only just begun, it will be interesting to see whether the ClearEdge Power fell within one of the WARN Act’s exceptions or whether the employees were entitled to the 60 days notice of the shutdown.

Monday, May 5, 2014

The Minimum Wage for Servers in Connecticut May Surprise You

Employers are legally allowed to include the tips that servers receive as part of the minimum wage, which makes the employer responsible for a smaller share of the server’s hourly wage. The current minimum hourly wage in Connecticut is $8.70. The Connecticut General Assembly recently passed Senate Bill No. 32, which sets the 2015 minimum hourly wage at $9.00. For a restaurant server in Connecticut, however, the current hourly wage is $5.69 and will rise to $5.78 in 2015.

To calculate severs’ pay, the law requires that the overall minimum wage be reduced by a statutorily set percentage. This percentage is commonly referred to as the “tip credit.” The current “tip credit” for servers, as set by Connecticut General Statute Section 31-60 is 34.6%. For an example of the “tip credit” calculation, click here.

Connecticut servers fare far better, as compared to servers in Rhode Island and Massachusetts, for example. The current hourly minimum wage for a server in Rhode Island server is $2.89. In Massachusetts, it’s $2.63 per hour.

Attorney David Rintoul has experience handling wage and hour claims and can work with you to make sure you are being paid fairly and correctly.