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In the most recent Fisher Phillips Wage and Hour Wednesdays, the Department of Labor (DOL) 80/20 tip ruling allowing employers to take a tip credit for “tip-producing work” was reviewed. Hosted by Fisher Phillips Ted Boehm and Susan Maupin Boone.
The Fair Labor Standards Act (FLSA) allows employers to pay certain employees a direct cash wage below the $7.25/hr federal minimum wage. Employers are allowed to take a tip credit of up to $5.12/hr to make up the difference. However, if the employee’s total wage plus tips does not equal the minimum wage, the employer must pay the difference. If tipped employees spend more than 20% of their working hours in a week performing “directly supporting work”, the tip credit is lost for the excess time and full minimum wage must be paid for that portion of work.
EmployStats Economic Consultant, Matt Rigling, has discovered in his work that differentiating tip-producing work and directly supporting work is important to applying the 80/20 rule. Tip-producing work can be defined as performing tasks such as taking orders, serving, and fulfilling customer needs during meal service and operating hours. Directly supporting work is identified as pre and post service work such as prepping, cleaning, and stocking inventory.
For more information visit Fisher Phillips.
EmployStats economist Dr. Roberto Cavazos finds that economic loss from pay-per-click (PPC) is on the rise as fraudulent activity risks have increased as many large corporations use this platform. According to Dr. Cavazos, approximately $144 Billion is spent on paid and social search globally. However, according to empirical-based research, 14% of PPC was fraudulent making the economic loss to $23.7 Billion by the end of 2020.
What exactly is PPC fraud? According to bigcommercec.com, PPC fraud can be defined as individuals, computer programs, or generated scripts exploiting online advertisers by repeatedly clicking on a PPC advertisement to generate fraudulent charges. Dr. Cavazos stated there are several techniques used to perform these acts including competitor clicks, clicks by automated clicking tools, and robots or other deceptive software. To counteract these invalid clicks, Google is taking a proactive approach by automatically filtering any click that is considered invalid, however many clients find this safeguard to be a lot more complicated than beneficial.
Dr. Cavazos reported the economic loss that has amounted from PPC globally has made a substantial dent in the market. The total PPC fraud loss for the U.S. in 2019 was $7,700,000,000 and $9,060,800,000 in 2020. By the end of 2020, the expected loss for the largest eCommerce sector was $3.8 Billion on PPC campaigns. This was based on the 17% fraudulent clicks that were found across multiple eCommerce campaigns. Dr. Cavazos shared even though global web sales amounted to an astounding $3.4 trillion in 2019, the projected loss from PPC fraud is still a sizeable amount. Despite the global loss, paid search remains the most-used digital advertising format bringing in 47% of total digital revenues.
The rise of PPC platform spending has opened a new route for commitment of fraudulent activity. Each platform experiences their own issues with fraudulent activity making it difficult to recognize. Ending PPC fraud has become a top priority when it comes to enhancing and augmenting future campaigns. While PPC has been a successful marketing tactic, it poses risks for fraudulent behavior requiring an understanding of the consequence of the use of PPC and steps to be taken to minimize those risks. Dr. Cavazos believes these losses are borne by businesses making the smaller ones most vulnerable to suffering PPC fraud.
Policymakers and economists continue to debate the merits and costs of minimum wage increases. The Raise the Wage Act of 2021, if enacted, would increse the federal minimum wage from its current $7.25 an hour to $15 an hour. What are the policy implications of the proposal: would it reduce poverty, increase prices, cost jobs, raise living standards, or perhaps a combination of impacts? What is the read of the academic literature on the subject?
Professor David Neumark was featured on the popular economics podcast Freakonomics to help answer this question. Dr. Neumark is an economics professor at the University of California – Irvine, and on the show describes how the academic consensus on the minimum wage has changed over the years. The benefits and costs however, are clear to Neumark:
“So my research on the minimum wage, one of the things it tends to say is there definitely is some job loss. And I’m quite convinced of that. So on net, there are winners and there are losers. I think then the question is, how do you add those up? So one reasonable metric is to say, “Well, okay, do we reduce poverty?” If we do, then maybe the costs are acceptable relative to the benefits. My reading of the evidence is that it’s pretty hard to find convincing evidence that poverty will fall.”
You hear more from Professor Neumark on the Freakonomics Episode here.
Raising the federal minimum wage has long been a topic surrounding politics and economists for years. Since the last federally mandated minimum wage increase in 2009, efforts to continue increases have built. Professor David Neumark is featured in CNN Politics discussing the cause and effect of these efforts.
Neumark, an economics professor at the University of California Irvine, discusses the potential impact of unemployment should a federally mandated minimum wage increase be implemented. Professor Neumark notes that in some low-wage states, more than half of workers make less than the proposed $15 per hour wage. As future minimum wage increases occur, the minimum wage will affect a greater share of workers.
You can find Professor Neumark’s CNN Politics feature here.
The 2020 coronavirus outbreak has sparked severe shocks to the United States labor market. Social distancing policies, designed to slow the spread of the disease, are leading to large layoffs in specific industries, like bars and restaurants. Many more employees in other sectors face the prospect of unemployment or temporary furloughs. Despite this economic strain, employers, particularly those in Medical and Supply Chain services, are expanding to meet new demand. These sectors continue to post job opportunities long after policymakers mandated the closure of non-essential services or issued “shelter-in-place” orders.
Evidence from Texas over the past half-month reveals both predictable and unexpected trends in new job opportunities. It may come as a surprise that, even in this “lockdown economy,” there is still help wanted.
Beginning on March 18th, Texas began implementing statewide social distancing policies, though some areas began issuing such orders days earlier. Cities and counties across the state gradually adopted “shelter-in-place” orders in March. By March 31st, a statewide order asked residents to stay home, except if they participated in “essential services and activities.”
But within the past two weeks, Texas employers posted over 66,000 new job openings.
Daily job postings are one indicator of up-to-date labor market demand, available from a variety of sources (most notably online). The Texas Workforce Commission (“TWC”) is the state agency responsible for managing and providing workforce development services to employers and potential employees in Texas. One service the TWC provides is access to databases of up-to-date job postings for different occupations and employers within the state. These job postings can come from the TWC itself, or from third party sites like Monster or Indeed. This information is extraordinarily valuable to data scientists.
The top 10 in demand occupations cover a variety of occupations, but are heavily concentrated in the healthcare, supply chain, and IT sectors.
Given the stresses to the healthcare system, its little surprise that hospitals are looking for more front-line staff. Registered Nurses were the highest in demand occupation, with over 3,000 new job listings since March 23rd.
Retail supply chains are also expanding employment. Sales Representatives for Wholesalers and Manufacturers, with over 2,300 new listings, was the second highest in demand occupation. Other logistical occupations saw large numbers of new openings, particularly for Truck Drivers, with over 1,200 new job postings since March 23rd.
Anecdotally, supermarkets and retail chains have been hiring more employees to meet increased demand for groceries and other supplies. Evidence from jobs posted since March 23rd would support this finding, with large increases in new listings for Customer Service Representatives (over 1,700), Supervisors of Retail Sales Workers (over 1,600), and Retail Salespersons (also over 1,600).
Finally, with the increase in service sector employees working from home, it should not be surprise that IT workers are also in high demand. Application Developers (over 2,100 new listings) and employees for general Computer Occupations (with 1,800 new listings) have both seen large increases in openings since March 23rd.
EmployStats will be closely monitoring daily job postings as the coronavirus outbreak continues.
On Wednesday, May 18th, 2016, The Obama Administration announced a significant expansion of who qualifies for overtime pay under federal labor laws. The Department of Labor has issued the Final Rule, which centers primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt from overtime pay protections.
The Final Rule increases the salary threshold from $23,660 to $47,476, which is the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region of the United States. The Department of Labor projects the policy to extend overtime protections to an additional 4.2 million workers, as anyone earning less than the salary threshold is now eligible for overtime payments.
The Final Rule also sets the total annual compensation requirement for highly compensated employees at $134,004, which is the annual equivalent of the 90th percentile of full-time salaried workers in the United States. The Final Rule also amends the salary basis test to allow employers to utilize non-discretionary bonuses and incentive payments to account for up to 10% of the new standard salary level. Lastly, the ruling establishes a procedure for automatically updating the salary and compensation levels every three years to maintain the levels at the 40th and 90th percentiles of earnings.
The Final Rule will take effect on December 1, 2016, giving employers over six months to prepare and adjust their payment policies. In response, employers will have the options to pay time-and-a-half for overtime work, raise workers’ salaries above the new salary threshold, limit workers’ hours to 40 hours per week, or a combination of the above.
For more information on the new overtime ruling, please visit http://www.dol.gov/featured/overtime.
Video from the Department of Labor:
https://youtu.be/UFJaDm720FU
The Occupational Employment Statistics (OES) program, conducted by the Bureau of Labor Statistics (BLS), provides employment and wage information by occupation and geographic location. Hourly and annual mean and median wages are available for more than 800 different occupations at the national, regional, state, and MSA level.
According to the latest OES news release, the healthcare industry employed 12 million people in May 2015, which represents nearly 9% of the nation’s total employment. Registered nurses (2.7 million), nursing assistants (1.4 million), and home health aides (820,630) were the largest healthcare occupations.
For more information, please refer to www.bls.gov/oes
The health care and social assistance industry gained 9,200 jobs from August 2015 to September 2015. Compared to September 2014, the cumulative number of jobs added in this industry is 67,000, an annual increase of 5.0%.
Source: http://www.tracer2.com/admin/uploadedPublications/2138_TLMR-Current_Edition.pdf
Image source: http://blogs.wsj.com/health/2012/01/06/health-care-sector-adds-jobs-as-overall-employment-picture-looks-healthier/
The oil and gas extraction industry in Texas lost 900 jobs from August 2015 to September 2015. Compared to September 2014, the cumulative number of jobs lost in this industry is 1,800, a decrease of 1.7%.
Source: http://www.tracer2.com/admin/uploadedPublications/2138_TLMR-Current_Edition.pdf
Image Source: http://www.eliteexploration.com/texas-oil-gas-companies/