Rate of Wage Growth Likely to Turn Around, BNA Index Predicts

/PRNewswire/ -- The pace of wage growth in the private sector likely will pick up in the coming months from recent historic lows, according to the preliminary third quarter Wage Trend Indicator(TM) (WTI) released today by BNA, a leading publisher of specialized news and information.

The WTI rose to 96.97 (second quarter 1976 = 100) from 96.85 in the second quarter. If confirmed by the revised and final readings, it would be the index's first gain in more than two years, ending nine straight quarterly declines, dating back to early 2008.

"The increase in the latest WTI is pointing to an improvement in labor market conditions -- albeit a small one," economist Kathryn Kobe, a consultant who maintains and helped develop BNA's WTI database, said. "The rate of wage increases should show a turnaround in the coming months, but I think it's going to be a slow change in that direction," Kobe said.

Year-over-year wage and salary increases for private sector employees in the coming months are expected to equal or exceed the 1.6 percent recorded over the 12 months ended in June, as measured by the Department of Labor's employment cost index (ECI). During the past year, the rate of annual wage growth has ranged from a record low of 1.4 percent to 1.6 percent.

Reflecting recent labor market conditions, three of the WTI's seven components made positive contributions to the preliminary third quarter reading, while two components were negative and two others were neutral.

Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI. A sustained decline in the WTI is predictive of a deceleration in the rate of private sector wage increases, while a sustained increase forecasts greater pressure to raise wages.

Contributions of Components

Of the WTI's seven components, the three positive components in the preliminary third quarter reading were job losers as a share of the labor force, from DOL; industrial production, measured by the Federal Reserve Board; and the share of employers planning to hire production and service workers in the coming months, also shown in BNA's quarterly Employment Outlook Survey. The negative contributors were the unemployment rate, reported by DOL, and economic forecasters' expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia. Two components were neutral: the proportion of employers reporting difficulty in filling professional and technical jobs, tracked by BNA's employment survey, and average hourly earnings of production and nonsupervisory workers, from DOL.

BNA's Wage Trend Indicator(TM) is designed to serve as a yardstick for employers, analysts, and policymakers to identify turning points in private sector wage patterns. It also provides timely information for business and human resource analysts and executives as they plan for year-to-year changes in compensation costs.

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Phone Company Dials Wrong Number on Employees' Overtime

/PRNewswire/ -- AT&T, the nation's largest provider of phone and internet services, and its subsidiaries, Pacific Bell Telephone Co. ("PacBell") and BellSouth Telecommunications Co. ("BellSouth"), have been withholding as much as $1 billion in overtime wages from more than 5,000 of the company's First Level "Managers" throughout the country. That's the accusation at the heart of two class action lawsuits filed today in U.S. District Courts for the Northern District of California in San Francisco and the Northern District of Georgia in Atlanta by the law firm of Sanford Wittels & Heisler, LLP.

The two class actions seek unpaid overtime wages for First Levels who worked for PacBell in California, BellSouth's 9-state region in Florida, Georgia, Mississippi, Tennessee, North Carolina, Alabama, Louisiana, South Carolina and Kentucky, and nearly every other state in the union where the phone giant does business. The suits allege that AT&T violated the Federal Fair Labor Standards Act (FLSA) and California state laws by carrying out a company-wide policy to wrongfully misclassify thousands of its Level One Managers as exempt from overtime wages.

The suits follow on the heels of a recent favorable class certification decision achieved by Sanford Wittels & Heisler for Level One Managers working for AT&T's Connecticut subsidiary, Southern New England Telephone Company (SNET). In a ruling issued in November, U.S. District Judge Janet C. Hall dubbed SNET's opposition to class certification "disingenuous" and "unpersuasive." Under the Court's direction, Class Notice has been sent to all Connecticut First Level Managers, who according to Class Counsel could ultimately receive up to 50 million dollars or more in withheld overtime pay after trial.

"The Court's decision in Connecticut opens the network for thousands of other AT&T Level One Managers all over the country to finally get paid for the endless hours a year the Company expects them to work for free," said Steven L. Wittels, Lead Class Counsel.

AT&T, listed Number 8 on the Fortune 500, has revenues of over $100 billion a year and employs 294,600 workers worldwide. First Level "Managers" are ground troops in the multi-billion dollar operation, who perform primarily clerical duties and relay information between company management and its technicians in the field. AT&T and its operating subsidiaries require these employees to work upwards of sixty hours a week but claim that these workers do not deserve overtime pay.

"AT&T is in disconnect mode when it comes to its so-called managers," adds Lead Counsel Jeremy Heisler. "The company knows all too well that its 'Managers' have that title in name only, and lack the typical managerial responsibilities you associate with a manager," he says. "In fact, until the takeover by AT&T two years ago, BellSouth used to pay all its First Levels overtime. What changed? Nothing but the Company's desire to squeeze earned wages out of its employees' paychecks."

Joe Lewis Luque, a former AT&T Level One employee in Bakersfield, California and a named plaintiff in the San Francisco action, said: "They called me a manager, but that's the opposite of what I was. When I tried to fire a technician assigned to me who was high on drugs, my Manager told me 'Who the f--k do you think you are to fire someone?! You can't fire anyone. You don't have the authority.'" He adds that he worked ten to fourteen hours every day. "I was also on call 24-7 and often had to work all weekend, yet AT&T never paid me an extra dime."

The BellSouth Plaintiffs' complaint echoes their California brethren's experience. The complaint describes BellSouth's First Levels as "glorified clerks" who were expected to work excessive hours without compensation.

Representing the Plaintiffs in these actions are Steven L. Wittels, Jeremy Heisler, Andrew Melzer and Marc Litton in Sanford Wittels & Heisler's New York and San Francisco offices; David Sanford in the firm's Washington, D.C.; Michael Ram and Karl Olson of Ram & Olson, Of Counsel to the firm in San Francisco; Ed Buckley of Buckley & Klein, LLP in Atlanta, Georgia; and Edmond Clark in Madison, Connecticut.

The complaints against AT&T and its subsidiaries charge that the colossus telecommunications provider fails to pay its Level One employees overtime wages for work in excess of 40 hours a week and eight hours a day; fails to provide these workers with mandatory meal periods and rest breaks; and fails to keep accurate records of the hours these employees work. The suits allege that the Company deliberately mislabels its Level Ones as "management" in order to avoid its obligation to pay overtime to its workers.

The Plaintiffs' attorneys at Sanford Wittels & Heisler estimate the Company's liability at $1 billion. The class action suits demands that AT&T, PacBell, and BellSouth immediately stop their unlawful pay practices and pay Mr. Luque and all Level One "Managers" unpaid wages due to them plus all damages permitted by California and federal wage and hour laws.

"Because overtime laws help motivate companies to hire more workers to get the job done, they're the kind of economic stimulus that we can't overestimate in today's dire economic climate," states Plaintiffs' attorney Andrew Melzer.

Co-Counsel Edmond Clark adds that it's time for the phone Goliath to restore basic services to its workers. "For years the company used to pay its Connecticut Level Ones overtime, now it cut off its Florida workers' overtime. Paying your workers for all their time worked should be a basic operating plan of any company."

Class Counsel for the First Levels David Sanford has a message for the phone company's management: "Pay your workers. Overtime pay is a right, not a privilege. When it's 4 o'clock in the morning and your lower level workers are out there making sure your customers don't have a busy signal, you have to pay them for their sweat and labor. The law allows no excuses."

Sanford Wittels & Heisler is a renowned class action law firm with offices in New York, San Francisco, Washington, D.C. and New Jersey that specializes in employment discrimination, wage and hour, consumer and complex corporate class action litigation, and has obtained more than a hundred million dollars in recoveries for individuals represented in class action cases nationwide . The firm also represents individual clients in employment, employment discrimination, sexual harassment, whistleblower, public accommodations, commercial, medical malpractice, mass tort and personal injury matters. Individuals with knowledge of AT&T's wage practices are encouraged to contact Sanford Wittels & Heisler at: (646) 723-2947 or (202) 742-7448 or ATT-classaction@nydclaw.com; swittels@nydclaw.com; amelzer@nydclaw.com, or dsanford@nydclaw.com.

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