Continuing the trend of expanding Fair Labor Standards Act (FLSA) overtime rules outside the traditional realm of hourly manufacturing or retail workers, two recent events show that employers should be aware that exemption and independent contractor issues are on the forefront of labor scrutiny.
Two bits, four bits, six bits a dollar—pay us more or we will holler
California comes to the rescue of NFL Cheerleaders with minimum wage law
Facing hundreds of billions of debt and an unemployment rate among the top ten highest in the nation, California tackled a critical issue recently when it passed legislation guaranteeing that beginning January 1, 2016, NFL cheerleaders in the state will receive sick days, benefits and at least minimum wage. The bill comes on the heels of the settlement of a lawsuit in which approximately 90 Los Angeles Raiderettes claimed illegal procedure by the ballclub for treating them as independent contractors. The bill will also ensure that cheerers for the San Francisco 49ers and San Diego Chargers can call in sick on game day and receive at least minimum wage.
Overtime for extra innings? Visalia Rawhide could get a raw deal as minor leaguers’ lawsuit could mean $7,250 per overtime hour for top draft pick
Not to be outdone, minor league ball players have sued Major League Baseball franchises in multiple states, pursuing a class action under wage and hour and anti-trust laws. The minor league ballplayers are demanding, among other things – you guessed it – minimum wage for all hours worked. Trying to keep pace with their NFL cheering counterparts, twenty-six of the disgruntled major league hopefuls hail from California.
While paying a minor league ball player minimum wage may sound like small ball, consider the slippery slope. Under the Fair Labor Standards Act and many states’ laws, an employee’s overtime rate includes not only the regular hourly rate, but also non-discretionary bonuses. Taking into consideration signing bonuses, we could see scenarios that will send minor league clumps into a revenue slump. For example, this year’s first round draft pick, Dansby Swanson, received a $6.5 million signing bonus from the Arizona Diamondbacks less than two weeks ago. So what would Swanson, who will likely begin his career in the minors with the Visalia Rawhide or Mobile BayBears, receive as his overtime rate? Assuming his signing bonus is intended to cover the 2016 season, and assuming a 30-week baseball season, Swanson’s bonus would result in a weekly salary of approximately $217,000 per week. That could mean an hourly rate for Swanson of over $5,000 and an overtime rate of about $7,250. With that kind of price tag, the Rawhide will be praying they don’t go extra innings.