Does Starbucks CEO Now Punch the Time Clock?

After voluntarily surrendering his nearly $10-million yearly salary because of poor company performance, Starbucks CEO Howard Schultz is now earning less than one-percent of that, or $10,000 annually. Unfortunately, under the Fair Labor Standards Act (FLSA), that means that Schultzie is no longer an exempt employee and must start punching the time clock.

Let’s look at what the FLSA says about exempt and non-exempt employees. First, the difference: Exempt employees are generally paid a salary and are not subject to overtime rules; non-exempt employees are paid hourly with overtime coming after 40 hours each week (though some states, like California, start the overtime clock ticking after eight hours each day).

However, just being paid a salary does not automatically make someone exempt. There are also “white-collar duties tests,” and here Schultz would qualify as an executive.

Now, and here comes the crucial part, to be exempt an employee must pass an earnings test by being paid $455 a week minimum. Let’s see, $10,000 divided by 52 weeks comes out to about $192.30 each paycheck.

Busted! Get that man a time clock.

To stay current with all these laws and regulations, I rely on Personnel Concepts. This particular information came from PC’s handy HR Desk Reference.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Whole Lotta Health Care Day Dreamin’ Goin’ On

As I noted in a previous posting, our current health care delivery system logs in as a $7,000-per-person-per-year behemoth. And I mean per all 300 million of us. (Do the math: $2.1 trillion divided by 300 mil.)

That’s why I get a good laugh everytime I read the results of a new survey. The one I came across today from the Kaiser Family Foundation and Harvard University is full of comments by everyday Janes and Joes who pine for “affordable health care.”

Now, while I sympathize with these people’s plights (I struggle too in the health care battles) and agree with the concept of affordable health care, anybody who thinks we can add 50 million to the rolls of the insured while reducing the cost of health care is seriously delusional.

The only way to do that–and this is the dirty secret and dirty word that no politician in D.C. will ever admit to or utter–is to ration health care. You know, get on a waiting list a year in advance for your next physical, or even flu shot. Then, if you’re lucky, your number may be called.

There’s another way, but it will lead to the same result as the pool of doctors shrinks up: Socialize everything and put doctors on a salary.

The biggest problem with health care as it exists in the U.S. is the payment system. Doctors perform a procedure and get paid for it from a list of payable procedures, so they try to maximize their income by performing as many procedures as possible–whether necessary or not. You’ve been through this with car mechanics no doubt: You take your car in for brakes, and suddenly five other problems are found.

So, the reality is that there really isn’t a health care system in the U.S. There is a sick care system. Very few people go to the doctor until a problem develops, so doctors have become car mechanics for the body. Which makes them very wealthy since the vast majority of Americans abuse their bodies through their diets and life-styles and are constantly in and out of doctors’ offices for maintenance of high blood pressure, diabetes, digestive problems and so on.

Now, if someone can find a middle ground between rationing and socializing, please step forward. The nearest middle ground I can think of, and it has its own set of flaws, is the Kaiser concept, in which everything you need (barring major surgery) is housed in one building and everyone is on a salary.

However, what are the odds that the D.C. brainiacs will do anything except expand Medicare and Medicaid until they squish the private insurance companies out of business? Since these two federal programs are the masters at pay-per-procedure, that leaves us stranded with the rationing option.

If Las Vegas offered odds on which direction so-called health-care reform will take over the long haul, I’d wager everything on the Medicare-Medicaid bureaucratic trump card. Can’t go wrong betting on business as usual in the nation’s capital.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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FMLA Marks 16th Anniversary Today

The Family and Medical Leave Act (FMLA) marks its 16th anniversary today (Feb. 5, 2009) in a beefed-up version that now allows family of service members to take up to 26 weeks of unpaid leave to care for their relatives in the military. Of course, provisions for 12 weeks of unpaid leave to care for oneself or one’s family, or for the birth or adoption of a child, are still on the books.

Some 7 million of the FMLA-eligible 77.1 million workers took leave in 2005, the latest year for which statistics have been released.

As I was reading up on FMLA today, one other statistic stuck out, courtesy of a group called AAUW, to wit:

A 2008 study by the Institute for Health and Social Policy found that only five of the 173 countries surveyed did not guarantee at least some form of paid maternity leave to its workers. These countries are Lesotho, Liberia, Swaziland, Papua New Guinea, and our very own USA. Illustrious company, to say the least.

August company to say the very least when you figure that 98 of these countries offer at least 14 weeks of paid leave.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Hard to Keep These $93K-a-Year Guv Employees Happy

Gotta pity poor Randall Hinton, who says he’s running out of music to listen to on his $93,803-a-year guv job, where he otherwise has nothing to do from 7:30 a.m. to 3:30 p.m.

Oh, but he does also idle away his away counting cars passing by on the New York Thruway as he gazes out the window and listens to music.

The guy basically can’t be fired either, so why’s he complaining and demanding new responsibilities at the State Insurance Fund in Albany?

Hinton said he’s treated as a second-class employee with fewer resources than even the lowliest Insurance Fund worker. “I have no Internet access, no printer, no laptop, no car. Every day it’s a struggle for me to bring in something I haven’t read or listened to. I can tell you how many white cars pass on the Thruway . . . I can’t take it anymore.”

How did Hinton get into this mess (or nirvana, depending on one’s perspective)? He had the gall to sue former Governor George Pataki for discrimination on the job. In a settlement, he was transferred into his current position, but his supervisors were ordered not to give him anything to do.

Now, he’s suing again, claiming more discrimination and workplace retaliation and demanding some work to do.

Hang in there, Randall. You’re been on the state dole, er, payroll for 27 years already, and as I calculate it, in three more years, you can retire on 90 percent of your pay, or $84,422.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Gotta Love OSHA Courses That Include Beer Breaks

An undercover reporter for New York’s Daily News recently paid $125 to attend an OSHA (Occupational Safety and Health Administration) 10-hour training class.

The class was over in 2 hours, 17 minutes. Held above a Bronx bar, the course enabled several of the attendees to slip away on breaktime to sip beers downstairs.

Nice gig if you can get it. I suppose all the attendees were awarded OSHA course completion certificates at the conclusion.

(Mind you, these courses are not run by OSHA, but by OSHA-certified trainers.)

When pressed, OSHA said it was looking into the matter. Will that include sampling the available beers at the site? Gotta make sure that the bar has its proper OSHA notifications posted.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Obama Plays the Executive Order Cat-and-Mouse Game

Nothing new here, as both Democrats and Republicans do it. When Dubya came to office, he reversed Clintonian mandates, and now Barack Obama has taken a few swipes at George W. and his executive orders.

First, under the Rahm Emanuel rule, all government agencies have been forced to place on hold any directives that hadn’t taken hold by Jan. 20, inauguration day of the new administration.

This has affected important labor issues such as the E-Verify system and the change in documentation for employment verification. You can read about these in the News Alerts section of Personnel Concepts.

This past Friday, Obama wielded his pen to crack the union code, or rather the Bushian anti-union code, by reversing some Bush decrees.

One reversal told federal contractors they could not (as in DON’T) post notifications of workers’ rights to withhold the portion of their union dues that go to political activity. A second mandated that federal contractors could not use federal payments to support or oppose unionization efforts (the thrust here is obvious since no employer would bother to pay for pro-union activities). The third ukase forces successor government contractors to offer jobs first (only?) to workers employed by the predecessor contractor.

All three edicts reverse Bush, who reversed Clinton, who was either original in these or reversed the elder Bush. Either way, you get the idea–and we all get to pay for their caprice when things backfire or produce unintended consequences.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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A Hundred Years Later, Henry Ford Comes to China

American automobile pioneer Henry Ford is famous for many things, including the introduction of assembly-line production and, to make sure workers could endure the boredom of his assembly lines, the $5-a-day pay rule, which was unheard of in 1914. (At the same time, he reduced the workday from nine to eight hours, but we haven’t progressed much since.)

When Ford revolutionized industry with his two implementations, he not only doubled the average worker’s take-home pay, but he also launched the creation of the middle class.

Now, his innovations have come to China, partially anyway. There is no death of assembly lines and other boredom-inducing work conditions in the People’s Republic, but there is also no $5-a-day pay standard either.

Now, at least one labor consultant in China is urging that the nation adopt a minimum daily wage of $5 to spur consumerism in the face of economic hard times. Call it “trickle up,” as the article reporting it did.

All is not well in the PRC. Some 18,000 (some say 60,000) factories have closed since the start of 2008, and at least 10 million (some say 50 million) migrant workers are now out of work and threatening social instability. Officials are worried.

Actually, officials are more than worried–they scared s’less and wreaking havoc on those who would try to organize workers to protest for their rights.

Take the case of migrant worker legal advocate Xiao Qingshan.

On January 9, Xiao said, 14 security officers from the local labor bureau broke into his office, confiscated 600 legal case files, 160 law books, his computer, his photocopier, his television set and 100,000 yuan in cash.

“That evening I was ambushed near the office by five strangers who forced a black bag over my head and then threw me into a shallow polluted canal,” he said. His landlord has since given him notice to quit his rented home.

And meanwhile, all U.S. Treasury Secretary Timothy Geithner worries about is the exchange rate of the yuan.

Years of sweatshop wages and income equality are coming home to threaten China’s stability–and its leaders. Protests have swept the nation even as Premier Wen Jiabao gets a shoe, Bush style, hurled at him in London.

The prestigious Far Eastern Economic Review headlined its latest edition, “The coming crack-up of the China Model.”

And you thought we had it rough here.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Group Says Single-Payer Can Be Created for $50 Billion

A group going by the name of Progressive Democrats of America (PDA) has solved the Riddle of the (Health Care) Sphinx, or so it proclaims.

The PDA folk claim that, by just extending Medicare to all Americans (thereby jettisoning, one would presume, all other current health care delivery systems), the country could–bugles blaring, drums rolling–create 2,613,495 million new, permanent, good-paying jobs; boost the economy by $317 billion in increased business and public revenues; add $100 billion in employee compensation; and infuse public budgets with $44 billion in new tax revenues.

First, as for these “new, permanent, good-paying jobs,” you don’t just pick up doctors, nurses or skilled technicians off the street, and just about every study out there shows that there is already a complete dearth of these professionals to suddenly cover the estimated 47 million Americans who lack health insurance. In Massachusetts, under its new so-called universal health care plan, most of the newly insured can’t find a doctor–and can’t afford the premiums (which the state has found itself paying or subsidizing).

But what is most disturbing about this proclamation of health heaven just over the horizon is the disingenuous financing figures–just $44 billion (or $63 billion–the distinction between these figures is not entirely clear) more than what is currently being spent on health care in America, and you get this single-payer nirvana.

Sounds like a bargain, huh? Problem is, the PDA people never say how the government will transfer the other $2.1 trillion (yes, with a T) being spent yearly on the current, mostly private system, a sum which includes insurance premiums, co-pays, deductibles, out-of-pocket expenses, and so on.

The group’s obvious point is, “How could anyone object to spending about $44 (or $63) billion when we’ve bailed out all those banking, stock market and mortgage sleazeballs for several hundred billion?”

It would be hard to so object if it were the only factor, but it would be harder still to find a way to transfer the current $2.1 trillion being spent on health care. Remember, a lot of that money is money that taxpayers are paying themselves–and which they don’t want to pay under any so-called “health care reform.” The public wants out-of-pocket expenses to disappear, and then to be able to walk into any doctor’s office on whim and get treated–without any inconvenience, waiting time or personal money spent.

The public, in short, wants a pipe dream, and sites like this, which make insuring the whole country seem like it costs less than one day in Iraq, only contribute to the daydreaming American public’s fantasies.

As the PDA site proclaims, this $63 billion–they waffle back and forth with $44 billion–is one-sixth the size of the bailout for CitiGroup and half the bailout size for AIG.

Unless my math (and PC calculator) are faulty, if you divide $2.1 trillion by 300 million people, that comes out at $7,000 per person each year. Hardly free–and certainly a lot more than $66 billion, or $220 per person per year. Hell, I’ll write a check for $220 now if I can get that seamless, faultless health care system everyone dreams of.

Unfortunately, this being the real world, it’ll cost each of us $6,780 more a year–and that’s just to get Medicare.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Minimum Wage Laws Cost Busboys Their Jobs

The Wall Street Journal, which has been chronicling the nation’s economic woes industry by industry, today ran a a piece about the latest cost-cutting strategy being employed at some restaurants–letting the busboys go.

Of course, this means that the wait staff must now clear tables and scrape dishes clean, tasks that most of them frown on and that some have even refused to do, leaving their places of work either voluntarily or involuntarily.

But here’s the rub: Since busboys usually don’t receive tips, they must be paid the full minimum wage, but wait staff generally fall under the “tipped employee” category and can be paid as little as $2 or $3 an hour, depending on the state.

Here we see an excellent example of the minimum wage law’s backfiring, but you won’t hear any politician denouncing such laws. Instead, they’ll blame the heartless restaurateurs and pass a law limiting their profits (to go along with executive pay and bonus laws coming out this week).

The really ironic thing is that, for at least one group of 570 restaurants all called Bob Evans (which seems to be a Midwestern chain), spoons are disappearing and must be replaced at an alarming rate.

Theories abound, all the way from wait staff revenge to a simpler cause–the spoons, being lighter and handier, are used to scrape the plates but they end up getting discarded into the trash can with the leftovers.

Anyway, we can only hope that the cost of the spoon replacements outweighs the cost of the previous bus staff.

Karmic revenge, you know.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Car Washes Targeted by ICE for Immigration Raids

News item from the blogosphere:

Earlier this year, Car Care Inc., a subsidiary of Mace Securities Inc., was ordered to pay a fine of $100,000 and to forfeit $500,000 to the U.S. Immigration and Customs Enforcement (ICE) following a 2006 investigation. (At one time, Mace, a manufacturer of security and personal defense products, was one of the largest carwash chains in the nation.) Car Care Inc., based in the Northeast, had employees on the payroll who were using false identification cards to show legal status to work. $600,000! On top of that, five managers are awaiting criminal actions against them, personally.

Actually, I found this little tidbit while following a Google Alert on the I-9 employment verification form that employers must keep on file for each employee. The quoted tidbit is both newsworthy and instructional in and of itself, but it’s also part of a blog posting by labor law attorney Jacob Monty.

Monty’s whole point is how much safer and easier an employer’s life becomes when he or she uses the E-Verify online database to check the “legal to work in the U.S.” status of each new employee. The system is free, he says, works in about 10 seconds, and produces a document to file with each employee’s I-9 that virtually guarantees you won’t get fined by the government. Using E-Verify, you’ve done your due diligence, in other words.

The blog where Monty posted this was one for the carwashing and detailing industry, and he blithely warns his readers that car washes are “low-hanging fruit” when it comes to ICE illegal worker raids.

For his final advice, Monty warns, “ICE knows which companies are using the system and which are not—and they target those who are not using E-Verify.”

I personally always rely on Personnel Concepts to keep compliant with the various laws and regulations of the nation, and that long-time labor law compliance company has issued an instructive and useful I-9 Compliance Kit. Highly recommended.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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