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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition

American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
It's more important than ever to be in compliance with payroll laws and regulations! How do you stay in compliance and avoid penalties? The APA Basic Guide to Payroll is written to make understanding the laws and regulations as easy as possible. And this single-volume guide is filled with tools to help you apply the law and make proper calculations ‚Äď with ease!

CCH® PAYROLL — 05/12/14

Employer must pay undocumented workers

Last year, the Eleventh Circuit Court of Appeals held that an employer was required to pay overtime wages as required under the Fair Labor Standards Act (FLSA) to an undocumented worker who obtained his job using a false social security number “Lamonica v. Safe Hurricane Shutters, 711 F.3d 1299 (11th Cir. 2013)”). Now, the Eighth Circuit has upheld a back pay award under the FLSA in a case involving a group of undocumented restaurant workers. Although several district courts have concluded that a worker's undocumented status will not shield an employer from liability under the FLSA, the Eleventh (Alabama, Florida Georgia) and Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Circuits are the first appeals courts to rule on this issue.

For varying periods between June 2007 and March 2010, Elmer Lucas and five other undocumented aliens worked at the Jerusalem Cafe, in some cases for less than minimum wage and in all cases without overtime compensation. The owner of the Cafe paid the workers in cash at fixed weekly rates that did not vary based on overtime hours worked. The workers' effective hourly rates ranged from $3.90 to $10.90 per hour.

In early 2010, the owner terminated the workers employment and the workers sued for unpaid minimum wage and overtime compensation. At trial, the owner claimed that the workers “volunteered” to work at the restaurant and that he never employed the workers because “he never hired illegals.“ Calling the owners account “a fantastic story,” a U.S. district court awarded the workers approximately $140,000 in unpaid FLSA wages, and an equal amount in damages plus legal fees.

The Eighth Circuit upheld the award. The court found that the FLSA's definitions of “employer” and “employee” unambiguously encompass unauthorized aliens. Moreover, the Department of Labor's position that the FLSA applies to aliens without employment authorization is longstanding and consistent.

The Eighth Circuit concluded that holding employers that violate federal immigration and employment law liable for both violations advanced federal immigration by offsetting the most attractive feature of unauthorized workers--their willingness to work for less than the law requires. According to the Eighth Circuit, there is no reason why the fact that the employers unlawfully hired the workers should exempt them from paying the wages that if lawful they would have to pay. “The employers' argument to the contrary rests on a legal theory as flawed today as it was in 1931 when jurors convicted Al Capone of failing to pay taxes on illicit income,” said the Court. (Lucas v. Jerusalem Cafe LLC, 721 F.3d 927 (8th Cir. 2013).

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