When the Supreme Court ruled on Epic Systems v. Lewis on May 21, 2018, they altered how cases involving collective action would play out. We are currently seeing the results of the Court’s decision in the case of Turner et al v. Chipotle Mexican Grill, Inc. Continue reading
It’s Hard Out There for a Tip
Life as a waiter is hard. Rude customers, surviving the lunch rush, and then you get stiffed on a tip. While it’s an afterthought for many of us as diners, tips are a waiter’s livelihood. For those who have never waited a table or processed payroll for a hospitality business, here’s a secret: waiters aren’t entitled to the same minimum wage as everyone else in the United States. Continue reading
Recently there has been a lot of talk in Delaware regarding right-to-work laws.
When a private-sector company is organized, the union will try to negotiate a requirement that all employees either join the union and pay union dues or pay a so-called agency fee for the services provided by the union like negotiations and grievance processing. The National Labor Relations Act (NLRA) authorizes individual states to outlaw this practice. Any state who passes such a law is called a “right-to-work state.”
The U.S. Department of Labor (DOL) released its proposed rule today that would broaden federal overtime pay regulations by raising the minimum salary threshold to $50,440 per year in order qualify for an exemption from overtime under the Fair Labor Standards Act (FLSA). Continue reading
It’s summer and that means it’s time for summer vacations. Some employers are unaware of the law regarding when an employee may be paid “comp time” instead of wages. So here’s a brief recap of what you should know.
Absent an exemption (see below), all employees must be paid at an overtime rate of 1.5 times the normal hourly rate for all hours worked in excess of 40.
This means that an employee who earns $20/hr. must be paid $30/hr for each hour worked over 40.
If the employee works 40 hours, he is paid $20 x 40 = $800. If he works 42 hours, he is paid $20 x 40 ($800) plus $30 x 2 ($60) as overtime compensation.
But he may not be paid his regular rate for the first 40 hours ($800) plus 2 hours of “comp time.” No, no, no. All time in excess of 40 must be paid (money in an amount equal to) 1.5 times the normal hourly rate.
Provided the employer complies with Rule #1, the employer may offer comp time as a supplemental form of wages.
One common example of this is paying comp time for hours 35-40. So, in addition to his regular wage of $800, the employee may also be paid 5 hours in comp time as an incentive or reward for working those last five hours. Similarly, some employers offer comp time for premium shifts.
Both scenarios are totally kosher, so long as the employee is receiving his regular wage. Comp time is a supplement not a substitute.
As with any rule, there are exceptions.
But, with comp time, the exceptions are few. An employer may pay an employee comp time in lieu of wages in certain situations. First, exempt employees (those who are not entitled to overtime in the first instance) can be paid comp time for time worked in excess of 40 in a week.
Second, certain public-sector employees may be paid comp time, including state and local government employers. In the public sector, under certain conditions, employees may receive compensatory time off at a rate of 1.5 hours for each overtime worked, instead of cash overtime pay.
Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of comp time; all other state and local government employees may accrue up to 240 hours.
There are exceptions to every rule. For example, some states do not permit the use of comp time or limit accrual to a lesser number than provided by federal law. Before you implement a comp-time system in your workplace, you should consider having it reviewed with legal counsel. And, if you have a comp-time system in place for non-exempt employees as a substitute for overtime pay, you should consider consulting with your employment lawyer to determine whether the system violates state or federal wage payment laws.
Other FLSA posts
The number of FLSA lawsuits filed each year continues to rise. See The Wage & Hour Litigation Epidemic Continues, at Seyfarth Shaw’s Wage & Hour Litigation Blog. Often, the lawsuits follow certain trends, targeting a particular industry, job type, or claim. One such trend, which I’ve written about previously, is meal-break claims. In these suits, the plaintiffs allege that their pay was automatically deducted for meal breaks that they never received.
Although this has been a popular claim, it’s not been a very successful one. And a recent case from the Eastern District of New York gives employers real reason to believe that meal-break claims are all but dead upon arrival.
In DeSilva v. North Shore-Long Island Jewish Health System, Inc., the court decertified a collective action of 1,196 plaintiffs who had alleged that they were subject to automatic deduction of meal breaks that they didn’t receive. In its opinion, the court makes clear that such claims will have a difficult time proceeding as a collective action:
In the time since this action was initially filed, mounting precedent supports the proposition that [the employer’s] timekeeping system and system-wide overtime compensation policies are lawful under the FLSA.
The court explains that this “mounting precedent” has resolved any doubt about the validity of auto-deduct policies, which require an employee to report a missed break to his supervisor in order to be paid for it. If no report of a missed break is made, the break period (usually 30 minutes) is automatically deducted from the time worked. This timekeeping system has the benefit of not requiring that employees clock in and out during their breaks-only at the beginning and end of each shift. The court reiterated that “automatic meal deduction policies are not per se illegal” and:
[w]ithout more, a legal automatic meal deduction for previously scheduled breaks cannot serve as the common bond around which an FLSA collective action may be formed.”
This decision continues to build on the growing body of case law dismissing or decertifying FLSA collective and class actions arising from auto-deduct meal-break policies. Good news for employers, particularly in health care, where these policies are commonplace.
DeSilva v. N. Shore-Long Island Jewish Health System, Inc., No. 10-CV-1341 (PKC) (WDW), 2014 U.S. Dist. LEXIS 77669 (E.D.N.Y. June 5, 2014).
2d Cir. Drops the FLSA Hammer (Dejesus v. HF Mgmt’s Servs., LLC, No. 12-4565 (2d Cir. Aug. 5, 2013).
Another Auto-Deduct Case Bites the Dust (Raposo v. Garelick Farms, LLC (D. Mass. July 11, 2013)).
8th Cir- FLSA Plaintiffs Must Spell It Out (Carmody v. Kan. City Bd. of Police Comm’rs (8th Cir. Apr. 23, 2013)).
2d Cir- FLSA Does Not Cover Gap Time (Lundy v. Catholic Health Sys. (2d Cir. Mar. 1, 2013)).
Another Employer’s Auto-Deduct Policy Is Upheld (Creeley v. HCR ManorCare, Inc., (N.D. Ohio Jan. 31, 2013)).
6th Cir. Affirms Dismissal of FLSA Gotcha Litigation (White v. Baptist Mem’l Health Care Corp. (6th Cir. Nov. 6, 2012)).
The Legality of Automatically Deducting Meal Breaks (Camilotes v. Resurrection Health Care Corp. (N.D. Ill. Oct. 4, 2012)).
E.D. Pa. Dismisses Nurses’ Claims for Missed Meal Breaks, Part I and Part II (Lynn v. Jefferson Health Sys., Inc. (E.D. Pa. Aug. 8, 2012)).
FLSA Victory: Class Certification Denied (Pennington v. Integrity Comm’n, LLC (E.D. Mo. Oct. 11, 2012)).
Rumor has it that today is Valentine’s Day. Being married to a chef-restaurateur, Valentine’s Day doesn’t mean “romantic holiday” to me as much as “very, very busy workday.” And, for that reason, I’ll dedicate today’s post to the food-service professionals who have a long weekend of work ahead of them.
Certainly, restaurants are not the only industry subject to wage-and-hour claims by employees. But there does seem to have been a recent proliferation of settlements of such claims by businesses owned by famous-name chefs.
There was the $5.25 million settlement forked out by Chef Mario Batali in March 2012, over allegations that servers’ tips had been improperly withheld. Then there was the January 2014 settlement agreement that Chef Daniel Boulud reached with 88 workers who alleged that their pay had been improperly reduced to account for tips, resulting in payment of overtime at an incorrect rate. The amount of that settlement is confidential. And, even more recently, there was the $446,500 settlement agreement reached to resolve the wage claims of 130 servers at two NYC restaurants owned by Chef Wolfgang Puck.
Why are so many wage claims against restaurants? One reason is the complexity of the laws in this area. The overtime laws are complicated even in the context of an employee who receives hourly wages only. But, add to that tip credits, earned tips, and tip pooling, and you’ve got a virtual maze of complex issues. The laws are not easy to navigate, especially without guidance from experienced legal counsel.
Social-Media Use and/or Misuse
I’d be remiss, of course, if I didn’t give at least one social-media related story, too. So I will end today’s post with a reference to a story about a chef who sent a bunch of not-so-nice tweets from the restaurant’s official Twitter account after he’d been fired but before (apparently) the restaurant had changed the password on its account.
Chef Grant Achatz, owner of Alinea in Chicago, landed in hot water when he tweeted about a couple who brought their 8-month old to dinner. I have a definite opinion on this story. Having been to Alinea, I feel very comfortable saying that it is not a place where an 8-month old needs to be and, if the 8-month old is crying at the top of his lungs, it’s not a place where that baby should be. The restaurant is very expensive, with meals starting at more than $200 per person. Reservations are wickedly difficult to get with only 80 seats.
Most important, though, is the nature of the experience. Diners fight for reservations and pay big bucks for a reason–the meal is something you remember forever. The food is so far beyond anything else, it’s almost an Alice-In-Wonderland experience. And to have that be ruined by the guests at the table next to you would be, to me anyway, a crushing disappointment.
So, there. That’s where I stand on the question. Chef Achatz’s tweet did not offend me or make me adore his restaurant any less.