248-409-1900 dburke@mi-worklaw.com

By:  Dan Cohen – 8/13/15

Ironically, there have been reports out of Seattle and elsewhere, where the minimum wage has been pushed to as much as $15, that some employees have requested cutbacks in their hours to avoid risking their entitlement to public food, housing and child care subsidies. I thought the increases were designed to lift people out of poverty and move them off of public assistance? Well, so much for that theory. If these reports are true, then we have accomplished nothing more than placing an additional financial burden on businesses.  I, for one, can hardly wait for the statistics to come out in New York in terms of how many individuals are coming off of public assistance because of the recent statewide increase in minimum wage for fast food workers.  Politicians need to quit doing things for the sake of popularity and start thinking about what is best for the economy and nation as a whole.  Flipping hamburgers at McDonalds is not supposed to be a career.  It is entry level and should be for students.

At some point, we need to stem the tide of this entitlement mentality or we will crash and burn as a nation. Think about it: if there are fewer and fewer people paying into the system and more and more recipients of these entitlements, the math will simply not work. We see this exact problem with defined benefit plans where there are more and more retirees, fewer and fewer contributing employers and fewer and fewer employees for whom the contributions must be made. The math no longer works, and those plans cannot stay above water much longer. Some are already in critical and declining status and will be or already have been cutting benefits. We are heading in that same direction as a nation of entitlements.  Reforms are needed.

Politics aside, let’s look at the situation reported out of Seattle and see what it could mean to employers. Employers faced with requests to cut hours have options at their disposal.  They can grant the requests if it makes sense to their business. If the request means the employee will become part-time, it can actually result in loss of benefits and designation as part-time under the Affordable Care Act.  Of course, if an employer has been significantly impacted by increased minimum wage levels, the decision could be made to use a workforce of part-timers, who are not eligible for benefits, including health care.

Employers also can deny the request for reduced hours. There is no law that obligates an employer to grant a request for reduced hours as long as the decision is not discriminatory.  Depending on the nature of the business and the local job market, this could result in difficulty finding employees to fill those hours, especially if enough employees seek reduced hours.  Moreover, employers may not want to run ads, interview, train and orient new workers to the business. This takes time and money and can be frustrating.  Employers may also be concerned that reducing hours can result in burdens upon other employees, particularly, if schedules must be adjusted.  While denying the request might be best under a particular business model, employers must accept the possibility that its denial might result in an unhappy employee, who starts looking elsewhere. Maybe that’s a good thing, but maybe it’s not for all the above reasons.

Employers who deny such requests may face self-help remedies in the form of attendance issues if employees take matters into their own hands and reduce their hours by calling off work, making up reasons to leave early, and making themselves unavailable for voluntary weekend assignments, for example. It is for this reason amongst others that employers should have tight attendance policies that enable them to discipline employees for not following call-in procedure, not producing doctor’s notes, for poor attendance, missed assignments, refusals to work weekends and the like. If discipline is necessary, it should be even-handed and well documented as discharges for poor attendance often result in unemployment claims that can easily be lost.