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Top Lawyer Answers: Can My Employer Dock My Pay For Housing?

| Mar 7, 2014 | minimum wage violation, overtime time violation, tipped employee violations |

Wage and Hour Attorney Best Answers: Can my employer take money from my paycheck to pay for housing? If my job’s unlawful actions are willful does he have to pay a fine? If I’m a foreign worker on a visa can I sue my employer?

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Even employees who have been in the workforce for many years often don’t understand their wage and hour rights under the Fair Labor Standards Act (“FLSA”). Young, student workers know even less. So, how could a foreign student worker, facing enormous language and culture barriers, possibly know their employer was violating their rights? In Pennsylvania, a former McDonald’s franchisee and its president Andrew Cheung took advantage of such employees.

In a complaint filed with the Department of Labor (“DOL”), fourteen student workers from Argentina, Peru, Chile, Malaysia, and other Latin American and Asian countries paid Cheung Enterprises (Cheung) $3,000 apiece to host them under J-1 work visas. Cheung promised the student-workers 40-hour workweeks. But, some students worked 25-hour shifts while others only worked four hours in a week! As a cherry on top of this wonderful agreement, Cheung also required up to eight students to live in company owned, substandard, basement housing and charged them each $300 rent, which was deducted directly from their paychecks.

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The FLSA requires employers to pay covered, nonexempt employees at least the federal minimum wage of $7.25 per hour and one and a half time their regular rate of pay for every hour over forty hours worked per week. An employer can earn a credit against the minimum wage requirement if it pays for employee housing. But, the employer cannot make a profit on the housing, only gets a credit for the housing’s actual cost and, as with other provisions, must keep accurate records. Employers violating the FLSA are liable to employees for back wages and an equal amount in liquidated damages payable directly the employees.

Cheung violated the minimum wage provision when it improperly deducted excessive rent for substandard housing from employee paychecks because it lowered their overall pay-rate below the minimum wage. The company also failed to pay other employees’ overtime.

After shamefully taking advantage of student-workers, violating federal law, and with its back up against the wall, Cheung finally decided to settle the case. Cheung agreed to pay $205,977 in back wages and liquidated damages to employees that on average only earn $7.80 per hour nationally. In addition, it has to pay a $5,000 fine because of the willful nature of his egregious violations and McDonalds has cut all ties with Cheung.

Our wage and hour attorneys have blogged about overtime and minimum wage violations in the past. But, Cheung’s behavior really illustrates the length to which some employers will go to avoid complying with the law. Cheung didn’t just violate the FLSA; he took advantage of a vulnerable class of individuals who came to this country for their education. Sometimes an employer’s actions violate both the law and our sense of morality. Our experienced wage and hour attorneys will fight to ensure that such employers don’t get away with it.

If you believe that your employer is not paying you all of your wages, paying you less than minimum wage, unlawfully deducting money from your paycheck, not paying you time and a half for overtime, or is otherwise cheating you out of wages requires contact the minimum wage violation lawyers and overtime claim attorneys at The Spitz Law Firm today for a free and confidential initial consultation. You may have a claim under the Federal Fair Labor Standards Act or Ohio Fair Labor Standards Act. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your wage and hour pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.

Disclaimer:

The materials available at the top of this overtime, wage and hour web page and at this employment law website are for informational purposes only and not for the purpose of providing legal advice. If you are still asking, “Am I entitled to overtime?”, “Does my job have to pay me for …”, “My paycheck is not right…” or “What do I do if…”, the your best option is to contact an Ohio overtime attorney to obtain advice with respect to FLSA questions or any particular employment law issue. Use and access to this employment law website or any of the links contained within the site do not create an attorney-client relationship. The legal opinions expressed at the top of this page or through this site are the opinions of the individual lawyer and may not reflect the opinions of The Spitz Law Firm, Brian Spitz, or any individual attorney.