Thursday, June 1, 2017

Sunshine and Wage Claims: It’s Summer in Chicago

As a transplanted Florida native, I always chuckle when I hear that we’re about to get into the “good” weather in Chicago.  I have learned that the term “good” means something different in Chicago than it did in Florida when referring to the weather.  Here it means that the temperature is above 50 and there is no precipitation, winter or otherwise.  My favorite of all Chicago weather events is the “wintry mix” – that awesome combination of snow, sleet, rain and whatever else might fall from the sky while the temperature hovers near freezing.  The “wintry mix” tops “freezing fog” (which I never knew existed until I moved here), but only by a little.

So you get it.  I hate the weather here.  But that’s not what this post is about.  With the “good” weather, Chicago businesses, municipalities, park districts etc. must take care of all of the things that they cannot address or don’t have to address when the weather is not “good.”  This means that grass needs to be mowed, outdoor maintenance and painting need to be done as well as many other tasks that require “good” weather.  The window is short.  The weather is “good” for about three (3) months.  All of this work that needs to be done puts a strain on employers.

For employers who need to take advantage of the “good” weather, the options are to hire more employees, which is not really the solution as there will be no work for them when the weather gets bad again; subcontract, which can have problems of its own not the least of which is the difficulty of accomplishing it when you have a union shop; and last but not lease, using current employees to perform work that they don’t normally do.  It is the last, and most frequently chosen option that we need to pay particular attention to.

Often, employers who need to mow the grass over the summer months or staff a weekend event with extra groundskeepers or custodial staff will use existing staff with different job assignment to cover extra work in other job classifications.  So for example, an employer may have a full-time mechanic who is industrious and happy to take extra work whenever it comes up.  The employee knows how to operate a riding mower and he can pick trash and do extra custodial duties whenever necessary.  This employee volunteers for this work and performs it well.  It’s what happens next that you need to worry about.

When the employee’s reported hours arrive at payroll for processing, how does that get handled?  I have represented clients who have taken the position that the hours are counted based upon each job classification worked by the employee.  That’s a mistake.  The proper way to pay the employee is to combine the hours worked in both jobs for the same employer and pay the employee overtime for any hours worked that exceed forty (40) in a workweek.  The fact that an employee works in two (2) separate job classifications does not change that obligation.

The next question is how to calculate the wage rate for purposes of overtime.  Employers have tried tying the overtime wage rate to the hours that resulted in incurring overtime.  So if the extra hours resulted from the mowing in the above example and the employee was paid $9.00 per hour to mow, the employer would use an overtime rate of $13.50.  This is incorrect if the employee’s has a higher hourly rate for another job.

There are two ways to pay the employee properly.  First, the employer can use the higher of the two hourly rates.  This is okay if the wage rates are close, but not if there is a significant disparity between the wage rates  For instance if the employee is paid $25.00 per hour as a mechanic and $10.00 per hour for the mowing or custodial work, paying overtime at the $25.00 per hour rate makes no sense.  In that instance the employer would want to use the “blended hourly rate” to calculate overtime.  The “blended hourly rate” method is complicated, so I recommend that employers contact employment counsel if this issue arises.

Here’s a summary of what you need to remember this summer:
  • The term “good” is relative as it pertains to weather in Chicago;
  • Hours worked in a workweek must be combined when an employee works two jobs for the same employer, even if they are totally different jobs;
  • Pay overtime at the higher of the two pay rates or using the “blended hourly rate” for all hours worked over forty (40) in a workweek.

And finally, I must concede that although Chicago winters are brutal, the summers are spectacular for more than just doing extra work.