Young workers easily cheated by some firms

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April 04, 2004|By JULIE CLAIRE DIOP

HUMORISTS make a career of mocking incompetent bosses. But sometimes mismanagement isn't funny, it's illegal. And it hurts working people.

In fiscal year 2003, the U.S. Department of Labor collected $213 million in back wages on behalf of 342,358 employees. And these are only the violations that the government learned about.

The Fair Labor Standards Act governs the payment of wages. Any employee who works for a company - including a not-for-profit company - involved in interstate commerce is protected by it. Buying paper clips across state lines can constitute interstate commerce, according to Alan Koral, a partner at Price, Vedder, Kaufman & Kammholz in New York.

One way unscrupulous companies (or, giving them the benefit of the doubt, ignorant companies) cheat younger workers is by wrongly classifying them as interns or contract employees.

Interns, which the Department of Labor classifies as "trainees" or as students in "school-to-work" programs, don't count as employees. Neither do independent contractors.

To classify workers as trainees and not employees, six conditions must be met. They cannot displace regular employees, for example, and their employers can receive "no immediate advantage" from the trainees' activities.

Students in school-to-work programs also cannot displace regular employees. Yet it's commonplace for employers to rely on motivated interns as much as they do on full-time employees, and thereby reduce their payrolls.

Employers do not have to offer independent contractors the same benefits that they do to employees because, the theory is, they are merely one purchaser of the contractor's services.

Employers break the law, however, when they hire someone as an independent contractor yet treat that person the same way they treat their employees. Again, six criteria determine if an independent contractor is really independent. The overriding one, according to Needham, Mass.-based employment lawyer Vivian Hsu, is the "control" test. The more control an employer has over a worker, the more likely that the worker should be compensated as an employee.

Questions to ask: Who decides on the hours worked? Who sets the pay? Does the person have other clients?

Other factors at which the government looks include the permanency of the employer-worker relationship, whether the worker has special skills or performs routine tasks, and how integral the person's services are to the employer's business.

The FLSA site ( is thorough and easy to follow. If you suspect your employer is violating federal law, the site will help you understand what is and is not allowed. If you feel you need additional information, call the contact numbers for your local wage and hour divisions, listed on the site. An employment lawyer can also be very helpful.

Straightening out a problem can be as easy as informing your employer what the act says. Unfortunately, it can also be contentious, and in some cases can cost you your job.

You may succeed in getting yourself on the payroll and then be fired by a boss who has had enough of your trouble. Most employees are employed "at-will," which in the broadest sense means that they work at the will of their employers.

About minimum wage

The federal minimum wage is $5.15. Most states have their own minimum-wage laws, and an employer subject to both the state and federal minimum-wage laws must pay the higher of the two.

Only a few types of employees don't have to be paid minimum wage. They include workers on small farms and seamen on foreign vessels. An employer of a worker who regularly receives more than $30 a month in tips is required to pay only $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage.

A special minimum wage of $4.25 an hour applies to employees under the age of 20 during their first 90 days of employment. After that, they must be paid the full federal minimum wage.

E-mail Julie Claire Diop at

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