Month: January 2022

The 80/20 Rule: Defining Tip Credit

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.

Principal Economists Dwight Steward Speaks on Tesla’s Economic Impact

Principal Economists Dwight Steward discusses the economic impact of Tesla beginning production in Austin, Texas, with KEYE-TV Journalist Jessica Taylor. 

With new production beginning in January 2022, Dr. Steward believes more jobs and infrastructure will follow. He agrees with expert projections of 5-15,000 jobs being created because the onset of production will result in more jobs and infrastructure. Likely, it will be closer to 15,000 because factory jobs have the potential to create a lot more opportunities according to Steward. Unlike their competitors, Tesla has had no labor and chip shortages. 

Elon Musk announced near the end of 2021 that the headquarters will be moving to Austin alongside the gigafactory which began construction during the Summer of 2020. 

Check out the full article here: https://cbsaustin.com/newsletter-daily/analysts-say-tesla-could-begin-production-at-austin-gigafactory-before-end-of-january

Dr. Roberto Cavazos Discussing the Economic Impact of Pay-Per-click Fraud

Check out EmployStats very own Dr. Roberto Cavazos discussing several solutions designed to prevent PPC Fraud.

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.