Law firm workers often don't make minimum wage, new survey shows

Long hours and frequent overtime are pushing lawyers and legal workers under the minimum wage, a new survey suggests.

Half of all respondents working at large New Zealand law firms told the survey, conducted by the Aotearoa Legal Workers Union, that they either knew or thought they had worked for less than minimum wage.

At smaller firms – those with five or fewer partners – 42 percent of respondents reported working for an average of less than the minimum wage, or thought they had.

The online survey asked lawyers and other workers to divide their fortnightly salary by the number of hours they had worked, including overtime. 

On that basis, half of the 212 respondents said long hours meant their pay often fell under $17.70 per hour – the legal minimum wage.

Almost all respondents said they "consistently" worked overtime.

The Minimum Wage Act 1983, and an updated Minimum Wage Order from 2019, require workers to be paid at least minimum wage for every hour they work. In a normal 80-hour fortnight an employer must pay at least $1416, and hours over that must be paid at a rate of at least $17.70 per hour.

The self-selecting survey was conducted by the union as its first data collection effort since forming in June. The union represents about 650 mainly junior lawyers and legal support staff.

It garnered 212 responses and was not intended to be a representative sample, union President Morgan Evans said.

"But we believe it does show a lack of transparency around pay is leaving staff, especially more junior members who work long hours, out of pocket," Evans said.

He said the union gave a draft copy to all the firms named in the report. Some verified or clarified information, but most declined to comment.

In June, Stuff spoke to two young lawyers who described regularly working up to 60 hours a week in their first year at two large law firms. The lawyers earned a salary between $45,000 and $49,000, and said they would regularly have fallen below minimum wage if all their hours worked had been tallied and paid.

Both said the culture of a large law firm meant complaining was not an option.

The union said it found virtually no private-sector employers had any consistent method of providing payment or time off in lieu for overtime hours.

Transparency was also an issue, Evans said. Most employers had no system for recording actual hours worked, other than the legal profession's traditional system for recording "billable hours" – the time that is actually billed to clients.

That wasn't a reliable system for junior workers at the beginning of their careers, Evans said.

"Billable hours are subject to things like budget pressure. If a team has gone over their estimate on a file, there can be pressure not to record too much time.

"That's one of the reasons junior employees' time records often reflect only a fraction of the time they spent at their desks."

Evans said although some firms asked their employees to record other time worked as well, many employees did not properly record their "non-billable" time because they feared it would make them look inefficient.

In the wake of the Russell McVeagh sexual harassment scandal in 2018, Dame Margaret Bazley was tasked with investigating aspects of the firm's management, policy and practices and found young lawyers were putting in punishing hours with insufficient recognition for their work.

In her report, Bazley wrote of junior legal staff finishing work as late at 4am.

She said discretionary rewards like gift cards for overtime were not adequate compensation and were not being distributed equitably.

Bazley recommended "a fair system of days in lieu or payment for overtime be developed, applied consistently, and not left to the discretion of partners".

In June, Stuff asked 15 major law firms about their overtime pay policies.

Ten responded, with most describing a mix of formal and discretionary compensation including meals, days in lieu and overtime in some circumstances (Simpson Grierson), time in lieu and overtime on a discretionary basis (Kensington Swan), and compensation including flexible working conditions, sports teams, office pilates and massages (Duncan Cotterill).

The union said it was not aware of any firm that has a formal overtime pay policy in place.

A formal quarterly "hours worked" report went to the board at Anderson Lloyd, and Lane Neave had a working hours and additional hours policy. Other major firms said they were reviewing their remuneration policies.

Retrieved From: Stuff