Lawsuit Alleging DWS Fails to Enforce Wage Protection Laws Goes Forward

SANTA FE – Today, New Mexico’s First Judicial Court ruled that a lawsuit charging that Department of Workforce Solutions (DWS) must enforce state laws protecting working people against wage theft from their employers can go forward. Today’s ruling denies DWS’s request to dismiss the lawsuit. The individuals and groups who filed the case will request a final ruling from the court this summer.

Wage theft is the illegal practice of not paying workers for all of their work, including violating minimum wage laws, not paying overtime, and forcing people to work off the clock.

The lawsuit, Olivas v. Bussey, was filed in January 2017 by four workers who were victims of wage theft and workers’ rights organizations El Centro de Igualdad y Derechos, New Mexico Comunidades en Accion y de Fé (CAFÉ), Organizers in the Land of Enchantment (OLÉ), and Somos Un Pueblo Unido. Elizabeth Wagoner of the New Mexico Center on Law and Poverty (the Center) is lead counsel on a legal team that includes the Center’s Gail Evans and Tim Davis, Santa Fe attorney Daniel Yohalem, and Gabriela Ibañez Guzmán of Somos Un Pueblo Unido.

“Our government should be working with us, not against us, to hold unscrupulous employers accountable when wages are stolen and our rights trampled on,” said Ibañez Guzmán. “This administration has long ignored the conditions of struggling workers in New Mexico, but our families are pushing back. It’s important that this case is moving forward so wage theft victims can be heard and the department’s disregard for the law exposed.”

“This ruling reaffirms that every hard working New Mexican – not just those with the money to hire lawyers–deserves to be paid for every hour they work,” said Wagoner. “Our state government cannot turn a blind eye when employers break laws protecting working people.”

New Mexico has some of the strongest wage enforcement laws in the country. In 2009, the legislature made them even stronger. However, DWS illegally refused to enforce these new laws and imposed onerous and arbitrary internal policies that have enabled unscrupulous employers to get away with wage theft unchecked.

“DWS’s failure to enforce New Mexico’s wage and hour laws is one more example of how hard working New Mexicans are getting the short end of the stick in our state—but they are fighting back. This case is too important to dismiss, particularly given the profound impact wage theft has on New Mexican working families. We applaud the ruling and look forward to continuing to expose systemic failures by DWS to enforce New Mexico wage and hour laws, “said Marco Nuñez, workers’ justice coordinator at El CENTRO de Igualdad y Derechos.

A copy of the ruling can be found here.

 Background on the lawsuit:

New Mexico’s state-level protections against wage theft include: (1) Mandatory statutory damages to victims of wage theft, calculated as full back wages, plus interest, plus double damages; (2) At least a three-year statute of limitations, or longer when the violation is part of a “continuing course of conduct”; (3) A minimum wage of $7.50 and overtime pay for hours over 40 at one-and-one-half times the employee’s regular hourly rate; (4) the department must investigate and take legal action on valid and enforceable claims filed by workers who cannot afford private attorneys.

The lawsuit charges that DWS has:

▪       illegally imposed a $10,000 cap on wage theft: they do not investigate or take any enforcement action on wage claims worth $10,000 or more.

▪       imposed an illegal one-year time limit on liability for wage theft: they do not investigate or take any enforcement action on claims for back pay that go back more than one year from the date an employee files a claim, despite the N.M. Legislature’s 2009 decision to lengthen the statute of limitations for wage claims to at least three years.

▪       illegally imposed a policy against holding employers liable for any statutory damages at the administrative enforcement phase of a case, thereby eliminating the financial deterrent for engaging in wage theft, despite the Legislature’s 2009 decision to double the penalty for engaging in wage theft.

▪       adopted policies and procedures that require the permanent closure of wage claims for procedural reasons, such as when a claimant misses a 10-day deadline, without regard to the strength of the claim or whether the claimant received notice of the deadline.

The lawsuit seeks an order that the Department of Workforce Solutions must stop applying these unlawful policies, as well as an order that the Department must re-open and investigate cases impacted by these policies.

The defendants in the lawsuit are the Department of Workforce Solutions, Cabinet Secretary Celina Bussey, and Labor Relations Division Director Jason Dean.

In January, 2017, the First Judicial District Court issued a temporary restraining order requiring the Department of Workforce Solutions to accept wage claims without regard to the Department’s illegal $10,000 cap or illegal one-year lookback period and to keep records of claims impacted by these policies.

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ACA Repeal Plan Jeopardizes New Mexicans’ Healthcare, Economic Recovery

Statement by Sireesha Manne, Healthcare Supervising Attorney at the New Mexico Center on Law and Poverty

 

 

We call upon our elected leaders to strongly oppose the U.S. House’s reckless legislation to repeal the Affordable Care Act. It would threaten the healthcare system providing coverage to nearly half of all New Mexicans and, which experts agree, has been one of the few bright spots in the state economy.

New Mexico’s low income and rural communities would be especially hard hit. Our state would be forced to cut Medicaid coverage or ration services for hundreds of thousands of children, people with disabilities, the elderly, and low income adults. Two thirds of our children in New Mexico are enrolled in Medicaid, and the program is the primary payer for nursing homes and community-based long-term services and supports for people with disabilities

Alarmingly, the bill is currently rushing through the House for a vote without public hearings. The lack of transparent, public debate is unacceptable for a bill that would endanger so many lives, exacerbate poverty, and inflict long-lasting damage on our healthcare system. Our families deserve to know the critical facts and their full impact.

The House proposal would make deep cuts to Medicaid by reducing and permanently capping federal funding for the program and for each person enrolled in Medicaid. This includes phasing out enhanced federal funding for the Medicaid Expansion that gained coverage for over 260,000 New Mexicans – reneging on the federal government’s promises to support state expansion of coverage for low-income adults. The legislation unfairly shifts billions of dollars of costs to the states.

The results would damage the entire healthcare system, especially in rural areas that have struggled with practitioner shortages. Already Medicaid payments to healthcare clinics, nursing homes, and safety net hospitals have been cut in the recent years due to state budget shortfalls and are too low to support even the basic costs of services. More practitioners are refusing to see Medicaid patients and thousands of jobs have been lost in the healthcare field. The damage from Medicaid cuts would be very difficult – if not impossible – to reverse if federal support is limited by funding caps.

Healthcare coverage will become unaffordable for low-income families, pricing thousands of New Mexicans out of the health insurance market. The bill will shrink tax credits given to families to help buy health insurance by $1,600 per year on average and much more for many older consumers and lower income families, according to the Center for Budget and Policy Priorities. People that cannot keep up with the premiums will also be punished with a 30 percent surcharge to their insurance rates if they miss payments.

New Mexico’s economy will be threatened by this legislation. Medicaid supports over 50,000 jobs from federal funding that tops $4.5 billion each year. The expansion of Medicaid under the Affordable Care Act added over 5,000 jobs. Healthcare became a leading sector of job growth in an otherwise stagnant economy.

New Mexico has struggled with one of the highest unemployment rates in the country. We would see thousands more jobs lost and a downsizing of the healthcare system with cuts to federal support for Medicaid and health insurance subsidies.

The legislation gives tax cuts to the wealthy, big insurance, and pharmaceutical companies by making deep cuts to Medicaid, reducing funding for Medicare, and getting rid of financial subsidies that are targeted for hard working, low income families. In other words, tax cuts for the rich are being paid for by taking away healthcare coverage from the poor.

We ask our leaders to carefully weigh the consequences of this proposal and listen to the views of the public. A recent poll has found that most voters in the state do not want to repeal the Medicaid Expansion. Nearly three-quarters of New Mexican voters oppose reducing federal funding for Medicaid. Overall, four out of five voters believe Medicaid is important or “very important” to our residents.

The Affordable Care Act led to historic achievements in New Mexico by cutting our uninsured rate in half. Over 95 percent of our children now have healthcare coverage. We cannot afford to go backwards and lose the substantial progress we have made.

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Download the a copy of the press release here.

NM Human Services Department Found in Contempt, Federal Magistrate Recommends Special Master

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Las Cruces, NM – On Friday, July 15, 2016, Federal Magistrate Carmen Garza entered proposed findings that the NM Human Services Department (HSD) be held in contempt for failure to comply with multiple Court Orders and federal law concerning administration of food and medical assistance to eligible families. Judge Garza found that “it is apparent that HSD and its officials have not exhibited the leadership, oversight, or coordination necessary to implement the Court Orders.” Judge recommended the appointment of a Special Master with expertise in food and medical assistance be appointed to facilitate HSD’s compliance with federal law and Court Orders.

The Order comes after three days of evidentiary hearings about HSD’s failure to provide food and medical assistance to families as required by federal law. Judge Garza noted numerous violations of federal law and Court Orders by HSD, finding that worker trainings and notices to families applying for food and medical assistance are “replete with repeated mistakes” and that HSD had not brought state regulations and policies into compliance with federal law. Nor could HSD tell the Court when compliance would be achieved. The Court further noted that testimony by HSD employees that HSD staff have been altering application in order to deny eligible applicants emergency food benefits and improve HSD’s timeliness statistics “was essentially not refuted.”
In entering a finding that the Secretary Brent Earnest should be held in Contempt, Judge Garza noted the Department’s recent willingness to seek expert assistance, stating “While the Court appreciates this acknowledgement, the Court is troubled it took over thirty hours of status conferences, over five hundred pages of joint status reports submitted to the Court, three days of evidentiary hearings on its Order to Show Cause, and testimony by HSD employees alleging fraud on the part of HSD, to which high level officials responded by pleading the fifth, for Defendant to discuss making these types of changes. For the question before the Court, Defendant’s realization has come entirely too late.”

As a remedy for contempt, Judge Garza recommends that the Court appoint and supervise a Special Master to act as a full time advisor and consultant to HSD. The Special Master will have expertise in food and medical assistance programs and will report to the Court on the extent of the Department’s compliance.

Judge Garza stated “Defendant’s inability to fully bring his application processing practices into compliance with the Court Orders has profound effects on the citizens of New Mexico. Indeed, when an eligible SNAP or Medicaid applicant is denied or delayed in receiving benefits, that individual loses benefits he or she may rely on to eat, feed his or her children, or to receive essential medical coverage . . . It is essential for this Court to acknowledge the need for these services to be effectively, efficiently and properly rendered to those who are eligible in this state.”

Attorneys at the Center and Law and Poverty, along with co-counsel Daniel Yohalem and Jane Yohalem, represent the class of plaintiff applicants for food and medical assistance in the case. Gail Evans, Legal Director at the NM Center on Law and Poverty stated, “We are pleased that the Court will appoint and supervise an expert to oversee HSD’s compliance with federal law in providing food and medical assistance. The Department needs expert assistance with important changes that will help the state provide benefits accurately and efficiently. This includes IT changes, the creation of a manual and effective training for state workers and comprehensible notices to families participating in the programs. We look forward to working with the special master to bring the Department into compliance with the law.”

For more information contact Gail Evans at (505) 255-2840/(505) 463-5299 or Sovereign Hager (505) 417-2084.

Read the full press release here.

Read Justice Garza’s recommendation here: Part 1 Part 2

NM Supreme Court Rules that Exclusion of Farm and Ranch Laborers from Workers’ Compensation is Unconstitutional

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Santa Fe, NM – Today, the New Mexico Supreme Court ruled that the New Mexico Constitution prohibits the exclusion of farm and ranch laborers from the protections of the New Mexico Workers’ Compensation Act (Act). In holding for the workers who challenged the Act, the Court said that the exclusion of farm and ranch laborers “is nothing more than arbitrary discrimination and, as such, it is forbidden by our Constitution.” Opinion at 2.

In its review of the history and purpose of the Act, the Court concluded that “there is no unique characteristic that distinguishes injured farm and ranch laborers from other employees of agricultural employers, and such a distinction is not essential to the Act’s purposes.” Opinion at 15.

New Mexico’s farm and ranch laborers are among the poorest of the working poor in our state, and consequently they cannot afford private health insurance. Their work is also very hazardous. Farm and ranch laborers work with heavy machinery, unpredictable animals and encounter harsh environmental conditions. In fact, the parties to the case agreed that farm laborers engage in dangerous work. “[A]s the parties observed at oral argument, farm and ranch laborers are engaged in a risky profession where workplace accidents frequently result from inherently unpredictable working conditions.” Opinion at 43.

Reacting to the decision the New Mexico Center on Law and Poverty’s Legal Director Gail Evans remarked, “We are thrilled that New Mexico’s farm and ranch laborers have the same right to workers’ compensation as all other workers in our state.”

For more information contact: Gail Evans (505) 255-2840/(505) 463-5293 Elizabeth Wagoner (505) 255-2840 or Tim Davis (505) 255-2840

Download the full press release here.

Read the opinion from the NM Supreme Court here.

Employees file a class action lawsuit against Kelly’s Brew Pub and Restaurant for violating the Albuquerque Minimum Wage Ordinance

Kelly’s Brew Pub and Restaurant and its owners Dennis and Janice Bonfantine unlawfully helped themselves to their servers’ tips and didn’t pay servers for some of the time they worked, according to a lawsuit filed today in Albuquerque district court.

The class action complaint, filed on behalf of seven current and former employees, accuses the Bonfantines and Kelly’s of violating the Albuquerque Minimum Wage Ordinance (the Albuquerque MWO).

The lawsuit contends that after a November 2012 ballot initiative raised the Albuquerque minimum wage, Kelly’s and the Bonfantines “settled on an unlawful response to the minimum wage increase: servers would pay for it themselves, out of their tips. Starting in 2013, Defendants increased the wage rate that appeared on servers’ paychecks so that Defendants appeared to comply with the new law, but required servers to pay the house cash each shift, calculated at 2% of their total daily sales, plus $3.00 per hour they worked on the clock. After tipping out, servers sometimes owed more in cash than they had actually earned in cash tips during the shift. When this happened, servers were required to pay the difference from their wallets or their paychecks. When questioned about this ‘tip out’ policy, the Bonfantines and managers explained that Kelly’s needed the money to pay for the minimum wage increase and other business expenses.”

Furthermore, according to the lawsuit, “Kelly’s did not pay servers all of their customers’ credit card tips, and instead kept a portion of those tips for themselves. Kelly’s also did not pay servers any wages at all for non-tipped work they performed off-the-clock, such as rolling silverware, kitchen prep, and awaiting table assignments.”

The Albuquerque Minimum Wage Ordinance – which the voters approved in a November 2012 ballot initiative – prohibits these practices. The ordinance raised the minimum wage for tipped workers from $2.13 an hour to $3.83 an hour in 2013, and $5.25 per hour in 2014 and afterwards, with annual adjustments for the cost of living. Under the ordinance, tipped employees must be allowed to keep all of their tips, and employers cannot require employees to share their tips with the house or with management. The ordinance does not prohibit tip pooling among employees who receive tips, but by law management cannot participate in a tip pool. The ordinance also requires employers to pay employees the minimum wage for all hours worked, whether on the clock or off. Non-tipped employees are currently entitled to $8.75 per hour under the ordinance.

The plaintiffs are represented by attorneys at the New Mexico Center on Law and Poverty and Youtz & Valdez, P.C. The attorneys will seek to have the lawsuit certified as a class action to recover servers’ misappropriated tips, minimum wages, statutory liquidated damages, pre- and post-judgment interest, injunctive relief, costs and expenses of suit, and reasonable attorney’s fees

Elizabeth Wagoner, a staff attorney at the Center on Law and Poverty, stated, “A worker simply cannot live on two dollars an hour, especially when she can’t keep all of her tips and doesn’t get paid at all for some work time. This shouldn’t be happening anymore in Albuquerque, but the situation at Kelly’s shows that a strong minimum wage ordinance also needs strong enforcement. We applaud our partners at Youtz & Valdez for taking on this important case, and urge the Albuquerque City Attorney to engage in proactive enforcement efforts to root out other lawbreaking employers.”

Shane Youtz, a partner at Youtz & Valdez, P.C., stated, “Employers need to understand that there are real consequences to undercutting Albuquerque’s minimum wage law. Pay practices like Kelly’s simply aren’t lawful, and our firm has a long-standing commitment to fight for workers’ rights in cases like these.”

The case is Atyani et al v. Bonfantine et al in the Second Judicial District Court in Albuquerque, NM.

Click here to download a pdf copy of this press release.

Click here to download a pdf copy of the Complaint.

For more information, contact the Counsel for Plaintiffs:
Elizabeth Wagoner, NM Center on Law and Poverty (512) 663-9352 (mobile)
Shane Youtz, Youtz & Valdez, P.C. 505- 244-1200 (office)

Medicaid Advisory Subcommittee Lacks Transparency

By Abuko D. Estrada, Staff Attorney
(505) 255-2840, abuko@nmpovertylaw.org

As you know, New Mexico’s Medicaid program is facing a huge budget shortfall amounting to over $400 million dollars in combined state and federal funds. A broad group of stakeholders and a meaningful, ongoing level of public input are necessary to deal with this shortfall. However, the current process is insufficient in these areas. Below, please read our press release regarding the lack of transparency and need for a greater level of input in the process. Additionally, you will find more information on the budget shortfall and the Medicaid program’s impact on the state.

Press Release: MAC Subcommittee Lacks Transparency

Factsheet: Medicaid Budget Shortfall

Federal Court Halts New Mexico’s Illegal Limits on Food Assistance

Federal District Court Judge Kenneth Gonzales and Federal Magistrate Judge Carmen Garza issued an injunction late Monday evening preventing the state from implementing a new three month time limit on food assistance. The injunction protects 17,500 eligible New Mexicans from losing food assistance due to problems with the state’s administration of the time limit.

Legal Director Gail Evans and co-counsel Dan Yohalem outside the Federal District Courthouse in Las Cruces.
Legal Director Gail Evans and co-counsel Dan Yohalem outside the federal courthouse in Las Cruces.

On January 1, 2016, the state began implementing new regulations that would penalize childless adults between the ages of 18-50 by limiting them to just 3 months of food assistance if they did not work at least 20 hours a week or participate in a qualifying job training program.

The New Mexico Center on Law and Poverty has been seeking to prevent the state from establishing time limits until they could be implemented without causing eligible people to improperly lose food assistance. The law center filed a request for injunction on behalf of adults improperly subject to the penalty who had not been provided basic information about the rules. Named plaintiffs included homeless and disabled adults and working adults for whom benefits were illegally delayed.

In a six-hour hearing in Las Cruces, Judge Gonzales and Judge Garza heard testimony from people who were at risk of losing the food assistance for three years because the Human Services Department either failed to properly exempt them from the time limit or failed to give them the information necessary to comply with it. In issuing the injunction, the Court recognized the “severe harm,” that is likely to result from the state’s failed and illegal implementation of the time limit including increased hunger and malnutrition and an increased burden on food banks. The Court found that the harm to applicants greatly outweighed any administrative burden on the state of delaying implementation.

National data shows that adults subject to the time limit are extremely poor, living below 17% of the federal poverty level and usually ineligible for any other form of assistance. New Mexico has the highest unemployment in the United States and some of the high rates of food insecurity in the country. This is the second time that a Court has blocked Governor Martinez from implementing the three month time limit. A New Mexico District Court entered a Temporary Restraining Order in October of 2014 and the Department stipulated to an injunction.

Sovereign Hager, Staff Attorney at the Center on Law and Poverty stated “we are pleased that unemployed adults will not face the illegal loss of food assistance in addition to the economic hardship that many are already facing in New Mexico. The state must bring the administration of the food assistance program into compliance with the law before opting to implement a three month limit for unemployed adults. We hope that the state will take this time to fix program errors and ensure that any requirements provide meaningful opportunities for unemployed New Mexicans.”

Click here to download a pdf copy of the press release: Press Release-HSD flawed SNAP Time Limit implementation enjoined-2015-03-08

For more information, contact:
Gail Evans, Legal Director, New Mexico Center on Law and Poverty (505) 255-2840
Sovereign Hager, Staff Attorney, New Mexico Center on Law and Poverty (505) 417-2084

Medicaid Expansion Resulting in Job Growth and State Savings

BBER logoA new report finds that the Medicaid Expansion has significantly increased jobs and revenues in New Mexico, generating a surplus that covers the cost of expansion itself. The report by Dr. Lee Reynis, economist at University of New Mexico’s Bureau of Business and Economic Research, updates prior research from 2012 and details the economic and fiscal impact of Medicaid expansion.

Over 200,000 adults in New Mexico gained healthcare coverage through Medicaid when the program was expanded under the Affordable Care Act. The federal government is paying for the entire cost of Medicaid expansion until this year when the contribution gradually steps down to 90 percent by the year 2020, with the state responsible for paying the 10 percent remainder of costs. The federal share totals over $11 billion between 2014 to 2021.

The report finds that the additional economic activity associated with the influx of federal dollars from Medicaid Expansion generates significant revenues from insurance premium taxes, gross receipts taxes, and income taxes as well as savings from programs no longer needed, including the State Coverage Insurance program. Additionally, the number of adults who are uninsured has dropped dramatically reducing uncompensated care costs for providers. From this activity, the State is expected to see a surplus of over $300 million dollars from Medicaid expansion between fiscal years 2014-2021.

Overall, the healthcare sector is leading job growth in New Mexico, adding over 1,500 new jobs in 2014 alone. Income and earnings have also risen for the healthcare workforce, with Medicaid accounting for 25% to 46% of the total increases in personal income in New Mexico. For a state historically underserved with healthcare providers, the Medicaid Expansion is providing funding to help grow our health care workforce and is encouraging investment in hospitals and treatment facilities with an emphasis on quality improvement.

News about the impact of Medicaid expansion comes at a time when New Mexico’s legislature is determining next year’s budget for Medicaid. Revenue forecasts have worsened due to dropping oil prices. Abuko D. Estrada, staff attorney for the New Mexico Center on Law and Poverty, says, “Medicaid is one of the best investments our state leaders can make. The program is paying for itself and is a boon for our economy, while providing quality health care coverage for New Mexicans in these tough times.”

Report-UNM BBER-Medicaid Economic and Fiscal Impacts-2016-02-03
Press Release-NMCLP-BBER Medicaid Expansion Report-2016-02-03
Learn more about the University of New Mexico’s Bureau of Business and Economic Research here.