EE is receiving room instead of wages
Ettelok
12 Posts
A friend of my daughter's is slightly mentally handicapped. He is 29 yrs old. I believe he is being taken advantage of by his employer.
His employer (a national restaurant franchise) is supposedly paying for him to stay at the owner's friend's motel (a fleabag) in lieu of paying wages to this employee. I'm sure this is to avoid paying taxes on the 'wages'.
The employee told me that he's pretty sure that the franchise headquarters has warned this owner that he is in violation of the law, but the owner has not ceased this activity and since the employee is new to this area of Ohio, he is really stuck with few options (he's a very good and hardworking, reliable employee, but he has a learning disability so it's difficult for him to find good work).
The owner is telling this ee that he is 'Management' and therefore exempt from overtime. He makes $5.50 - he is definitely not management! The only wages that are actually paid out to the employee are for hours over 40 hrs. Which should be paid at time-and-a-half, but he is only receiving straight time for these extra hours.
As an HR professional, I can clearly see that this employer is in violation of FLSA and IRS laws. The thing I'm not sure about is whether it is OK to pay someone in this manner - room instead of wages. I guess maybe if the ee was receiving some sort of statement where everything was documented, it might be OK, but I believe that this employer is not reporting any of this properly with local, state and federal tax authorities. Nor is the ee receiving a full accounting of his wages.
I don't really want to get personally involved, but I believe this guy is getting screwed and I feel I should point him toward an attorney.
Any feedback would be appreciated.
Ettelok
His employer (a national restaurant franchise) is supposedly paying for him to stay at the owner's friend's motel (a fleabag) in lieu of paying wages to this employee. I'm sure this is to avoid paying taxes on the 'wages'.
The employee told me that he's pretty sure that the franchise headquarters has warned this owner that he is in violation of the law, but the owner has not ceased this activity and since the employee is new to this area of Ohio, he is really stuck with few options (he's a very good and hardworking, reliable employee, but he has a learning disability so it's difficult for him to find good work).
The owner is telling this ee that he is 'Management' and therefore exempt from overtime. He makes $5.50 - he is definitely not management! The only wages that are actually paid out to the employee are for hours over 40 hrs. Which should be paid at time-and-a-half, but he is only receiving straight time for these extra hours.
As an HR professional, I can clearly see that this employer is in violation of FLSA and IRS laws. The thing I'm not sure about is whether it is OK to pay someone in this manner - room instead of wages. I guess maybe if the ee was receiving some sort of statement where everything was documented, it might be OK, but I believe that this employer is not reporting any of this properly with local, state and federal tax authorities. Nor is the ee receiving a full accounting of his wages.
I don't really want to get personally involved, but I believe this guy is getting screwed and I feel I should point him toward an attorney.
Any feedback would be appreciated.
Ettelok
Comments
They must leave his paycheck with at least minimum wage for the number of hours worked, and he should be receiving OT for anything over 40.
He's working for the lowest form of human. There's a special place in down below for people like that.
As a follow-up, I emailed Ohio Wage and Hour and they directed me to call the Federal Division of DOL. I spoke to the inspector at the federal division and she explained that if the company does not do $500,000 per year in sales, they do not have jurisdiction for minimum wage standards. She said the state's minimum wage is $2-something.
So is she saying that the FLSA has not been violated unless the employer sells $500,000 per year?
Any comments are greatly appreciated.
Kolette
Does Ohio have any type of program that rewards employers for hiring mentally or physically challenged individuals?
Paul
This person is being taken for a ride and should seek legal assistance or at least be reported to the Department of Labor and I am sure they will take care of him. I would suspect that anyone who would take advantage of someone like this probably has many violations.
Depending on your city's size, etc., you may have a local organization for the advocacy of disabled persons. This is the kind of offense that would launch a dozen picketers in a heartbeat.
My $0.02 worth.
DJ The Balloonman
The employee does not know and most often does not want to make waves, so he/she says nothing and the stupid decision goes on! Uncle SAM and State SAMs want their money called income tax, FUCA, etc. Uncle SAm and State Sam can not receive taxes on uncalculated dollars. I believe a 1099 is the way that the freebies get reported and there is a whole sytem on that subject. The freebies also get to be apart of the O/T calculation and there is a whole section on that subject.
Tell the employee he is protected if he goes to the wage and hour folks and makes a complaint. Yes, I know you stated jobs were hard to find for this personality, but it reads like there is a wrong that should be right'ed here! I believe you would have already straighten out the boss, if you could!
PORK
Originally, I emailed Ohio Wage and Hour. They referred my to the federal office in Columbus. When I called the Columbus Ohio office of federal Wage and Hour - they referred me back to the state Wage and Hour because they said they did not have jurisdiction for a company with sales less than $500,000.
This restaurant is a nation pizza chain. I don't know what they gross - indeed it may not be $500,000.
I am going to set this guy up with an employment attorney.
The reasonable cost of board, lodging, or other facilities may be
considered as part of the wage paid an employee only where customarily
``furnished'' to the employee. Not only must the employee receive the
benefits of the facility for which he is charged, but it is essential
that his acceptance of the facility be voluntary and uncoerced. See
Williams v. Atlantic Coast Line Railroad Co. (E.D.N.C.). 1 W.H. Cases
289.
You can also get more info on lodging, board, etc in lieu of wages at [url]www.dol.gov[/url]