New York Initiative Targets Wage Theft

The New York Department of Labor is mad as hell and ain't gonna take it anymore.

Take what? Wage theft in its many forms. The department this week launched a new program to monitor employers throughout the Empire State.

Modeled somewhat on the nation's Neighborhood Watch program, New York Wage Watch will empower groups of volunteers throughout the state to report violations of wage laws, generally pertaining to minimum wage and overtime provisions in the FLSA (Fair Labor Standards Act) and other pieces of legislation.

The state has been beset with numerous instances of wage theft in various industries. Restaurant violations (even involving allegations against celebrity chefs Bobby Flay and Tom Colicchio) seem to get the most headlines, but a study found that 78 percent of the state's car washes were not paying minimum wage or overtime.

Even state icons like the Saratoga Race Course and the Erie County Fair didn't go unscathed--or undetected. At Saratoga, more than 100 backstretch workers reported wage violations, and at the fair, bathroom attendants were paid nothing and forced to give half their tips to a subcontractor.

Activities by New York Wage Watch volunteers will include holding training sessions, providing employers with compliance literature, and handing out employee literature in public places. When violations are suspected within any volunteer group's geographic zone, a mechanism to report these alleged abuses is in place. Everything will be supervised and monitored by the State Labor Department's Division of Labor Standards.

For those of you running your own businesses or making wage decisions, I highly recommend a series of wage and overtime tools from Personnel Concepts.

New Year Ushers in Minimum Wage Hikes

Two cities and 11 states are raising their minimum wage laws on Jan. 1, 2009, with Washington topping the state list at $8.55 per hour, and the City of Santa Fe besting everyone at $9.92 an hour (San Francisco just behind that at $9.79).

The federal rate will go to $7.25 on July 24, raising many other states' rates in the process (including both Florida and Arizona, which are raising their hourly wage requirement on Jan. 1 but no to that level).

Here's a complete rundown on the Jan. 1 wage increases.

Employers, check your requirements and get the posters you need with this state-by-state labor law posting checklist.

Minimum Wage Laws: Helpful or Hurtful?

It's hard to argue that any law that can potentially elevate people from poverty or substandard living conditions is bad. Such, however, is the case with the minimum wage laws of our nation, which began in 1938 with the Fair Labor Standards Act (FLSA) and have now taken root not only in state legislatures but in city halls as well.

The effectiveness of these laws is--seven decades later--fair game for debate. Some argue that minimum wage laws have no adverse effect on employment of certain groups of people (such as the unskilled and the young), while others maintain that minimum wages reduce employment at the fringes.

A lot of it depends on one's political perspective and/or business involvement (owner, manager, et al.).

Now comes a book by a professor of economics at UC Irvine and an associate director of research for the Federal Reserve, which argues that minimum wage laws indeed lower employment and reduce (not raise) wages overall.

In Minimum Wages, David Neumark and William Wascher argue that their two decades of research reveal that these laws do not achieve their goals. Instead, they reduce employment opportunities for less-skilled workers and tend to reduce their earnings; they are not an effective means of reducing poverty; and they appear to have adverse longer-term effects on wages and earnings, in part by reducing the acquisition of human capital.

Still, there's no stopping the political will power to raise the minimum wage. The federal rate will go up to $7.25 next July 24, while states and even municipalities are beating that figure and that onset date with minimum wage laws' taking effect on New Year's Day. Washington is the highest of the states at $8.55 an hour, while San Francisco--at $9.79--and Santa Fe--at $9.92--are highest overall.

I've certainly seen many anecdotal news videos in which business owners say they've already laid someone (or someones) off in anticipation of the new minimum wages, spreading their work around or doing it themselves, to lead me to believe that minimum wage laws can indeed backfire.

However, politics is politics, and the minimum wage phenomenon is here to stay.

Up next--the minimum wage as living wage?