Ashley Milano  |  February 25, 2015

Category: Labor & Employment

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Wedny's ADA class action lawsuitA Nevada judge recently dismissed three out of four claims brought forth in a Wendy’s employee class action lawsuit. This class action lawsuit was filed by four workers who allege Wendy’s International Inc. pays less than minimum wage and violates a state labor law by providing substandard health insurance benefits to try to excuse the illegal pay scale.

According to the employee class action lawsuit, lead plaintiff Latonya T. claims Wendy’s of Las Vegas lied to her and other Wendy’s employees about their health insurance benefits to justify paying them $7.50 to $7.65 per hour instead of the state minimum wage of $8.25 for workers in their classification. The plaintiffs allege that Wendy’s of Las Vegas falsely claims the health benefits comply with state labor laws that requires acceptable health insurance benefits to qualify for the lower state minimum wage. However, the plaintiffs claim the amount they have to spend on health insurance premiums exceeds what state labor law allows in the case of a state minimum wage exemption.

According to the employee class action lawsuit, plaintiff David H. says his manager “offered him the company health insurance plan through Aetna Inc., but discouraged him from accepting the benefits because they were ‘expensive’ and the manager ‘wouldn’t recommend it.'” David earns $7.55 per hour. Plaintiff Latonya T. is a mother of two dependent children and said she turned down the health insurance benefits due to their high cost. Wendy’s also pays her $7.55 per hour.

The workers say their health insurance premiums are much higher than the state’s qualifying threshold and do not provide coverage for deductible health care costs. The Nevada Constitution allows employers to qualify for the reduced minimum wage only when the cost of premiums for health insurance benefits equals no more than 10 percent of workers’ annual gross taxable income. The benefits also must pay for health care costs that employees can deduct on their federal income tax returns.

State voters in 2006 amended the Nevada Constitution to establish a minimum wage of $8.25 per hour for employers who do not provide qualifying health insurance benefits and a minimum wage is $7.50 – $7.75 per hour for those who do.

Only under very limited circumstances may an employer pay less than that amount; any company paying less than state or federal minimum wage may not be doing so lawfully. Employers must provide comprehensive, low-cost health insurance to employees and all their dependents in order to pay less than $8.25. The insurance cannot cost more than 10 percent of the employee’s gross wage, and many employers are both charging too much and not offering plans that cover all required medical costs.

The Wendy’s Employee Class Action Lawsuit is Case No. 2:14-cv-00729-GMN-VCF, in the U.S. District Court for the District of Nevada.

Labor Law Violations

The Wendy’s employee class action lawsuit brings several claims against Wendy’s, though the restaurant chain is most prominently accused of violating state laws governing pay deductions for benefit premiums.

Employers may deduct from pay employees’ share of benefit premiums for the convenience of the employees who participate. However, when deductions for health plans cut into statutory minimum wage and overtime pay requirements, the employer can deduct them only if the employee voluntarily agrees and the employer does not profit or benefit from the transaction.

Employees are entitled to their rights, which are detailed and protected by state labor laws and federal labor laws. The Fair Labor Standards Act (FLSA) govern the rights of employees to fair wages and working conditions across the nation. Employers who cut corners and disregard these rights can be held legally accountable by employment law not to mention the fact that they may face stiff penalties.

Employees who believe their rights have been violated should consider filing a wage and hour lawsuit or joining a wage and hour class action lawsuit to recover unpaid wages from their employers.

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