Jottings By An Employer's Lawyer

Thursday, February 07, 2008

Campaign Financial Crunch = Wage and Hour Violations?

The big news in today's political world (at least until Mitt Romney dropped out) was that the Hillary Clinton' campaign was having some financial struggles which resulted not only in her having to loan her campaign $5 million, but according to the article in the Chicago Tribune:
Clinton's campaign also disclosed that several senior staff members, including her campaign manager, were voluntarily working without pay.
Having lately been up to my neck in wage and hour law collective actions, I couldn't help but think beyond the political implications to, you guessed it -- the possibility of a wage and hour problem!

Why? Because as we all know, employees can't waive their rights under the Fair Labor Standards Act unless there is a DOL or court approved settlement, and under the wage and hour law to employ someone is to "suffer or permit" an individual to work, which sounds precisely what could be occurring when senior staffers "voluntarily" work without pay. And if you spun it out far enough, that could easily lead to allegations of possible minimum wage violations, loss of exemptions which would mean failure to pay overtime, and all sorts of other problems that employers are now dealing with every day.

Fortunately for the senior staffers, according to the NYT, a fund raising spurt has apparently bailed the Clinton campaign out, so they won't have to face that issue. See, Clinton Campaign Aides Will be Paid.

But since this issue comes up fairly regularly in political season, from political campaigns of all stripes, see CNN's January 11th story, Top Giuliani staffers to go without pay, this may not be the last time the possibility exists.

Now in fairness, I don't know exactly how either the Clinton or Giuliani campaign are or were structured, whether "voluntary" work would truly be a violation, whether there may be some exception to FLSA coverage for political campaigns, or whether they would even be covered by the FLSA, which is its own arcane subject. Maybe someone who provides campaign legal advice will provide the answer. It might even be a good exam question for one of the triumvirate over at the Workplace Prof blog.

However, regardless of whether there truly is liability, it might not be a bad thing for all politicians to have to think about. It is always helpful for those who pass laws to be covered by them.

Rightly or wrongly, many employers wonder if legislators have any clue about the impact of employment legislation in the real world. Having to come face to face with it, by say having a DOL investigator show up and ask for records or receive a collective action suit for unpaid wages on behalf of all similarly situated individuals might be a good, even startling, education.

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