March 16th, 2017 | Cynthia L. Hackerott | Add a Comment
Employer may violate minimum wage if tip credit applied to hours not tip-credit eligible
March 14th, 2017 | Ron Miller | Add a Comment
As a server for a popular chain of family dining restaurants, the employee’s pay, including tips invariably exceeded the minimum wage. Even so, she argued that she did not receive the minimum wage for every hour that she worked. The employee pointed out that there were some activities for which she did not generate any tips from customers, such as brewing coffee or tea, rolling silverware, wiping down tables, setting tables, cutting and stocking fruit, stocking ice, taking out trash and sweeping floors. Because the employer took the tip credit for all hours that she worked, she contended that her “cash wage” for those hours was only $4.98 per hour (the wage paid by the employer to its tipped employees). Did the employee have a viable claim for an FLSA minimum wage violation?
In Romero v. Top Tier of Colorado LLC, the Tenth Circuit ruled that the fact that an employee did not allege that she failed to receive the minimum wage when including all the tips she received as a server, did not preclude her from stating a claim for a minimum wage violation The appeals court rejected a district court’s conclusion that “if [a] tipped employee makes enough [in tips] to meet the minimum wage,” then the employer has necessarily complied with Section 206(a) of the FLSA. To the extent an employee’s tips are relevant in determining whether an employer has satisfied its minimum-wage obligations under Section 206(a), the threshold question is whether the employer can treat those tips as wages under Section 203(m).
In dismissing the employee’s minimum wage claim, the district court relied on the undisputed fact that she never alleged that she earned less than the federal minimum wage of $7.25 an hour. However, the district court declined to address the employee’s argument that the employer impermissibly treated her tips as “wages.” The Tenth Circuit concluded that the district court should have first resolved whether the employer was entitled to treat her tips as wages under Section 203(m).
“Non-tipped” tasks. The employer took advantage of the “tip credit” and paid the employee a “cash wage” of $4.98 per hour and then used some of her tips to cover the gap between that cash wage and the federal minimum wage. But the tip credit only applies to “tipped employees,” and during some of the hours she worked, the employee performed “non-tipped” tasks. Reasoning that she wasn’t a “tipped employee” under Section 203(m) for at least some of the hours she spent performing non-tipped tasks, the employee asserted that the employer should have paid her a cash wage of at least $7.25 an hour for those hours. She alleged that the employer was not entitled to take the tip credit for any of the hours she spent performing non-tipped tasks. Additionally, she asserted that the employer wasn’t entitled to take the tip credit for those hours “in excess of [20 percent] of her regular workweek” that she spent performing non-tipped tasks.
Here, the employee alleged that she was employed in two occupations: one that generated tips and one that didn’t. She also alleged that she spent more than 20 percent of her workweek performing “related but nontipped work.” Consequently, she argued that the employer impermissibly treated a portion of her tips as “wages” for minimum wage purposes by taking the tip credit for hours that were not tip-credit eligible.
The district court correctly stated the general rule that an employer satisfies the minimum wage so long as, after “the total wage paid to each [employee] during any given week is divided by the total time [that employee] worked that week, the resulting average hourly wage” meets or exceeds $7.25 an hour. But, it could not apply the general rule to the employee’s claim without first determining what “total wage” the employer actually paid her. The district court could not make that determination without evaluating whether the employer took the tip credit for hours that weren’t tip-credit eligible.
‘Blacklisting rule’ torpedoed in Senate and sent to Trump to bury
March 7th, 2017 | Pamela Wolf | Add a Comment
On March 7, the Senate approved a resolution rolling back the Federal Acquisition Regulation and Department of Labor’s related guidance implementing President Barack Obama’s Executive Order on Fair Pay and Safe Workplaces—the so-called “blacklisting rule.” The 49-48 vote fell strictly along party lines, with Republicans favoring the measure and Democrats and two Independents voting against it; three Republicans did not vote. H.J. Res. 37 now heads to President Trump’s desk for signature. While Trump has proven difficult to predict, the fact that the resolution abolishes a regulation lines up with his aggressive deregulation agenda, and so he will likely approve it.
The final rule that will be undone if Trump signs the resolution of disapproval, among other things, requires prospective contractors to disclose violations of 14 basic workplace protections from the last three years, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. It also bars federal contractors from enforcing mandatory pre-dispute arbitration agreements as to workers’ claims of sexual assault or civil rights violations. Additionally, H.J. Res. 37 will prevent implementation of the entire rule, including the paycheck transparency requirements that were not previously enjoined.
Unnecessary and unhelpful? Senators Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee and Lamar Alexander (R-Tenn.), chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), applauded the passage of the resolution.
“Overturning this harmful rule will reduce the regulatory burden plaguing our economy,” Johnson said in a statement. “This rule could potentially be used to blackmail innocent businesses during labor negotiations. The Obama administration admitted that this rule would cost at least $398 million each year to comply with, but failed to quantify any benefit whatsoever. Repealing this rule is a step in the right direction by providing the regulatory relief that is necessary to unleash the American economy so that it can realize its full potential.”
“The Senate today did the right thing by overturning the harmful Obama Administration ‘blacklisting’ regulation that could have prevented our nation’s federal contractors from receiving a federal contract for an alleged labor violation before any wrongdoing has been proven,” Alexander added. “I’m urging President Trump to sign this legislation as soon as possible.”
Federal contractor violations. Democrats pushed hard against the resolution, noting that in 2013, the HELP Committee conducted an investigation which found that nearly 30 percent of the companies that received the most severe penalties for worker safety and wage law violations were federal contractors.
A report released by Senator Elizabeth Warren (D-Mass.) on the day of the vote showed that 66 of the federal government’s 100 largest contractors have been caught breaking federal wage and hour laws. In addition, more than a third of the 100 largest penalties levied by OSHA since 2015 were issued to companies that held federal contracts.
Senator Patty Murray (D-Wash.), Ranking Member HELP Committee, speaking on the Senate floor, said: “For too long, the government has awarded billions of taxpayer dollars to companies that rob workers of their paychecks and fail to maintain safe working conditions. This rule helps right that wrong. Under this rule, when a company applies for a federal contract, they will need to be upfront about their safety, health, and labor violations over the past three years. That way, government agencies can consider an employer’s record of providing workers with a safe workplace and paying workers what they have earned—before granting or renewing federal contracts.”
“When workers arrive on the job, they deserve to know that they will be treated fairly; they will be provided with safe and healthy workplaces; their right to collective bargaining will be respected; and that they will be paid all of the wages they have rightly earned,” Murray continued. “And businesses that contract with the government should set an example when it comes to each of these concerns—and taxpayer dollars should only go to businesses that respect these fundamental worker protections.”
H.J. Res. 37 uses a procedural move under the Congressional Review Act that permits Congress to pass a resolution of disapproval to prevent, with the full force of the law, a federal agency from implementing a rule or issuing a substantially similar rule without congressional authorization.
Officer had no right to declare that he was too drunk to work
March 2nd, 2017 | David Stephanides | Add a Comment
Police department rules included both call-outs and mandates. A call-out occurs when off-duty officers are called to duty, typically to meet some temporary emergency requiring extra manpower. A mandate occurs to fill an opening, such as when an officer is unable to work a particular shift. The rules also permit officers to self-report to the dispatcher their use of alcohol before a call-out and be excused from the call-out (City of Sparta, Illinois and Policeman’s Benevolent Labor Committee/PBPA Labor Organization. Sep. 27, 2016. Gregory P. Szuter).
One Sunday, an officer called in to say that he could not report to his 7 pm to 7 am shift because his camper broke down and he was stranded. Under department rules, the least senior officer from the prior shift was mandated to cover the first half of the shift and the least senior officer from the succeeding shift was mandated to cover the second half. Thus, one officer was told that he would remain on duty from 7 pm until 1 am. Efforts to reach by telephone the least senior member of the succeeding shift to tell him that he should report at 1 am, however, failed. An officer, who was dispatched to the least senior officer’s home at 4 pm to inform him of the shift change, reported that the officer would not be starting his shift at 1 am because said that he was too drunk to report to work. The officer who delivered the message reported that the other officer was sitting in his backyard reading a book and did not appear overly drunk to him. The police department suspended him without pay for 30 days, and he filed a grievance.
In an insubordination case, the employee is obligated to “obey now and grieve later.” Thus, the officer should have reported to work, raised the issue of sobriety at that point, and let the chief decide what to do. The arbitrator also rejected the officer’s affirmative defense that he was too drunk to report. The question was not whether he was too drunk at 4 pm but rather he was too drunk at 1 am. The arbitrator noted that a person could eliminate a significant amount of blood alcohol content in the nine hours between 4 pm on Sunday afternoon and 1 am on Monday. Although the officer’s blood alcohol level was never determined, the arbitrator concluded, by applying the other officer’s description of him, that the drunk officer probably could have sobered up by 1 am. In the end, the decision was not the officer’s to make. His decision not to appear constituted insubordination.
As for mitigating factors, the officer had long seniority and had received commendations for his work after this incident occurred. He also, however, had received 15 additional occurrences of discipline since the incident, a shockingly large number in less than a year. Thus, nothing existed to mitigate the penalty. The suspension was appropriate and was reasonably related to the seriousness of the offense. The arbitrator denied the grievance.
Littler issues latest report on EEOC developments
February 28th, 2017 | Lisa Milam-Perez | Add a Comment
National labor and employment firm Littler Mendelson has just issued a valuable resource for employers: its latest Report on EEOC Developments.
The management-side law firm’s annual report—its sixth installment—is a comprehensive guide to significant EEOC developments in fiscal year 2016. It includes a summary of the year’s case law and litigation statistics, as well as an analysis of the Commission’s achievements and setbacks, and their implications. The aim is intended as a roadmap for employers to where the EEOC is headed in the coming year.
The report opens with a summary, including an overview of key EEOC developments in FY 2016, a review of the EEOC’s systemic enforcement initiative, and a look at the Commission’s current priorities and its progress on its systemic goals.
A discussion of EEOC charge activity, litigation and settlements in FY 2016, focusing on the types and location of lawsuits filed by the Commission.
An overview of legislative and regulatory activity involving the EEOC—formal rulemaking, informal guidance on new and evolving workplace concerns, and public meetings on agency priorities. The section also highlights recent and emerging trends at the agency level, including the Commission’s efforts to adhere to its strategic enforcement plan.
A summary of the EEOC’s investigations and subpoena enforcement actions, particularly where the EEOC has made broad-based requests to conduct class-type investigations; the chapter also discusses case law addressing the EEOC’s authority to do so.
A chapter on FY 2016 litigation in which the EEOC was a party, with subsections including: (1) pleading deficiencies raised by employers; (2) statutes of limitations cases involving both pattern-or-practice and other types of claims; (3) intervention-related issues, both when the EEOC attempts to enter a case through intervention and when third parties attempt to join as plaintiffs in EEOC-filed lawsuits; (4) class discovery issues in EEOC litigation, including bifurcation, identification of class members and/or communication with the class, and other discovery in pattern-or-practice litigation; (5) other critical issues in EEOC litigation, including reliance on experts, class litigation, and background check litigation; (6) general discovery issues involving both employers and the EEOC in litigation between the parties; (7) favorable and unfavorable summary judgment rulings and lessons learned; (8) trial-related issues; and (9) circumstances in which courts have awarded attorneys’ fees to prevailing parties.
Four report appendices cover details on noteworthy EEOC consent decrees, conciliation agreements, judgments and jury verdicts; appellate cases in which the EEOC has filed an amicus or appellate brief (and a discussion of decided appellate cases last year); a companion guide summarizing select subpoena enforcement actions undertaken by the EEOC during the last fiscal year; and a report of summary judgment decisions by claim type.
“We hope that this Report serves as a useful resource for employers in their EEO compliance activities and provides helpful guidance when faced with litigation involving the EEOC,” the authors said in a statement announcing the publication’s release.
March 16th, 2017 | Cynthia L. Hackerott | Add a Comment
Employer may violate minimum wage if tip credit applied to hours not tip-credit eligible
March 14th, 2017 | Ron Miller | Add a Comment
As a server for a popular chain of family dining restaurants, the employee’s pay, including tips invariably exceeded the minimum wage. Even so, she argued that she did not receive the minimum wage for every hour that she worked. The employee pointed out that there were some activities for which she did not generate any tips from customers, such as brewing coffee or tea, rolling silverware, wiping down tables, setting tables, cutting and stocking fruit, stocking ice, taking out trash and sweeping floors. Because the employer took the tip credit for all hours that she worked, she contended that her “cash wage” for those hours was only $4.98 per hour (the wage paid by the employer to its tipped employees). Did the employee have a viable claim for an FLSA minimum wage violation?
In Romero v. Top Tier of Colorado LLC, the Tenth Circuit ruled that the fact that an employee did not allege that she failed to receive the minimum wage when including all the tips she received as a server, did not preclude her from stating a claim for a minimum wage violation The appeals court rejected a district court’s conclusion that “if [a] tipped employee makes enough [in tips] to meet the minimum wage,” then the employer has necessarily complied with Section 206(a) of the FLSA. To the extent an employee’s tips are relevant in determining whether an employer has satisfied its minimum-wage obligations under Section 206(a), the threshold question is whether the employer can treat those tips as wages under Section 203(m).
In dismissing the employee’s minimum wage claim, the district court relied on the undisputed fact that she never alleged that she earned less than the federal minimum wage of $7.25 an hour. However, the district court declined to address the employee’s argument that the employer impermissibly treated her tips as “wages.” The Tenth Circuit concluded that the district court should have first resolved whether the employer was entitled to treat her tips as wages under Section 203(m).
“Non-tipped” tasks. The employer took advantage of the “tip credit” and paid the employee a “cash wage” of $4.98 per hour and then used some of her tips to cover the gap between that cash wage and the federal minimum wage. But the tip credit only applies to “tipped employees,” and during some of the hours she worked, the employee performed “non-tipped” tasks. Reasoning that she wasn’t a “tipped employee” under Section 203(m) for at least some of the hours she spent performing non-tipped tasks, the employee asserted that the employer should have paid her a cash wage of at least $7.25 an hour for those hours. She alleged that the employer was not entitled to take the tip credit for any of the hours she spent performing non-tipped tasks. Additionally, she asserted that the employer wasn’t entitled to take the tip credit for those hours “in excess of [20 percent] of her regular workweek” that she spent performing non-tipped tasks.
Here, the employee alleged that she was employed in two occupations: one that generated tips and one that didn’t. She also alleged that she spent more than 20 percent of her workweek performing “related but nontipped work.” Consequently, she argued that the employer impermissibly treated a portion of her tips as “wages” for minimum wage purposes by taking the tip credit for hours that were not tip-credit eligible.
The district court correctly stated the general rule that an employer satisfies the minimum wage so long as, after “the total wage paid to each [employee] during any given week is divided by the total time [that employee] worked that week, the resulting average hourly wage” meets or exceeds $7.25 an hour. But, it could not apply the general rule to the employee’s claim without first determining what “total wage” the employer actually paid her. The district court could not make that determination without evaluating whether the employer took the tip credit for hours that weren’t tip-credit eligible.
‘Blacklisting rule’ torpedoed in Senate and sent to Trump to bury
March 7th, 2017 | Pamela Wolf | Add a Comment
On March 7, the Senate approved a resolution rolling back the Federal Acquisition Regulation and Department of Labor’s related guidance implementing President Barack Obama’s Executive Order on Fair Pay and Safe Workplaces—the so-called “blacklisting rule.” The 49-48 vote fell strictly along party lines, with Republicans favoring the measure and Democrats and two Independents voting against it; three Republicans did not vote. H.J. Res. 37 now heads to President Trump’s desk for signature. While Trump has proven difficult to predict, the fact that the resolution abolishes a regulation lines up with his aggressive deregulation agenda, and so he will likely approve it.
The final rule that will be undone if Trump signs the resolution of disapproval, among other things, requires prospective contractors to disclose violations of 14 basic workplace protections from the last three years, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. It also bars federal contractors from enforcing mandatory pre-dispute arbitration agreements as to workers’ claims of sexual assault or civil rights violations. Additionally, H.J. Res. 37 will prevent implementation of the entire rule, including the paycheck transparency requirements that were not previously enjoined.
Unnecessary and unhelpful? Senators Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee and Lamar Alexander (R-Tenn.), chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), applauded the passage of the resolution.
“Overturning this harmful rule will reduce the regulatory burden plaguing our economy,” Johnson said in a statement. “This rule could potentially be used to blackmail innocent businesses during labor negotiations. The Obama administration admitted that this rule would cost at least $398 million each year to comply with, but failed to quantify any benefit whatsoever. Repealing this rule is a step in the right direction by providing the regulatory relief that is necessary to unleash the American economy so that it can realize its full potential.”
“The Senate today did the right thing by overturning the harmful Obama Administration ‘blacklisting’ regulation that could have prevented our nation’s federal contractors from receiving a federal contract for an alleged labor violation before any wrongdoing has been proven,” Alexander added. “I’m urging President Trump to sign this legislation as soon as possible.”
Federal contractor violations. Democrats pushed hard against the resolution, noting that in 2013, the HELP Committee conducted an investigation which found that nearly 30 percent of the companies that received the most severe penalties for worker safety and wage law violations were federal contractors.
A report released by Senator Elizabeth Warren (D-Mass.) on the day of the vote showed that 66 of the federal government’s 100 largest contractors have been caught breaking federal wage and hour laws. In addition, more than a third of the 100 largest penalties levied by OSHA since 2015 were issued to companies that held federal contracts.
Senator Patty Murray (D-Wash.), Ranking Member HELP Committee, speaking on the Senate floor, said: “For too long, the government has awarded billions of taxpayer dollars to companies th
at rob workers of their paychecks and fail to maintain safe working conditions. This rule helps right that wrong. Under this rule, when a company applies for a federal contract, they will need to be upfront about their safety, health, and labor violations over the past three years. That way, government agencies can consider an employer’s record of providing workers with a safe workplace and paying workers what they have earned—before granting or renewing federal contracts.”
“When workers arrive on the job, they deserve to know that they will be treated fairly; they will be provided with safe and healthy workplaces; their right to collective bargaining will be respected; and that they will be paid all of the wages they have rightly earned,” Murray continued. “And businesses that contract with the government should set an example when it comes to each of these concerns—and taxpayer dollars should only go to businesses that respect these fundamental worker protections.”
H.J. Res. 37 uses a procedural move under the Congressional Review Act that permits Congress to pass a resolution of disapproval to prevent, with the full force of the law, a federal agency from implementing a rule or issuing a substantially similar rule without congressional authorization.
Officer had no right to declare that he was too drunk to work
March 2nd, 2017 | David Stephanides | Add a Comment
Police department rules included both call-outs and mandates. A call-out occurs when off-duty officers are called to duty, typically to meet some temporary emergency requiring extra manpower. A mandate occurs to fill an opening, such as when an officer is unable to work a particular shift. The rules also permit officers to self-report to the dispatcher their use of alcohol before a call-out and be excused from the call-out (City of Sparta, Illinois and Policeman’s Benevolent Labor Committee/PBPA Labor Organization. Sep. 27, 2016. Gregory P. Szuter).
One Sunday, an officer called in to say that he could not report to his 7 pm to 7 am shift because his camper broke down and he was stranded. Under department rules, the least senior officer from the prior shift was mandated to cover the first half of the shift and the least senior officer from the succeeding shift was mandated to cover the second half. Thus, one officer was told that he would remain on duty from 7 pm until 1 am. Efforts to reach by telephone the least senior member of the succeeding shift to tell him that he should report at 1 am, however, failed. An officer, who was dispatched to the least senior officer’s home at 4 pm to inform him of the shift change, reported that the officer would not be starting his shift at 1 am because said that he was too drunk to report to work. The officer who delivered the message reported that the other officer was sitting in his backyard reading a book and did not appear overly drunk to him. The police department suspended him without pay for 30 days, and he filed a grievance.
In an insubordination case, the employee is obligated to “obey now and grieve later.” Thus, the officer should have reported to work, raised the issue of sobriety at that point, and let the chief decide what to do. The arbitrator also rejected the officer’s affirmative defense that he was too drunk to report. The question was not whether he was too drunk at 4 pm but rather he was too drunk at 1 am. The arbitrator noted that a person could eliminate a significant amount of blood alcohol content in the nine hours between 4 pm on Sunday afternoon and 1 am on Monday. Although the officer’s blood alcohol level was never determined, the arbitrator concluded, by applying the other officer’s description of him, that the drunk officer probably could have sobered up by 1 am. In the end, the decision was not the officer’s to make. His decision not to appear constituted insubordination.
As for mitigating factors, the officer had long seniority and had received commendations for his work after this incident occurred. He also, however, had received 15 additional occurrences of discipline since the incident, a shockingly large number in less than a year. Thus, nothing existed to mitigate the penalty. The suspension was appropriate and was reasonably related to the seriousness of the offense. The arbitrator denied the grievance.
Littler issues latest report on EEOC developments
February 28th, 2017 | Lisa Milam-Perez | Add a Comment
National labor and employment firm Littler Mendelson has just issued a valuable resource for employers: its latest Report on EEOC Developments.
The management-side law firm’s annual report—its sixth installment—is a comprehensive guide to significant EEOC developments in fiscal year 2016. It includes a summary of the year’s case law and litigation statistics, as well as an analysis of the Commission’s achievements and setbacks, and their implications. The aim is intended as a roadmap for employers to where the EEOC is headed in the coming year.
The report opens with a summary, including an overview of key EEOC developments in FY 2016, a review of the EEOC’s systemic enforcement initiative, and a look at the Commission’s current priorities and its progress on its systemic goals.
A discussion of EEOC charge activity, litigation and settlements in FY 2016, focusing on the types and location of lawsuits filed by the Commission.
An overview of legislative and regulatory activity involving the EEOC—formal rulemaking, informal guidance on new and evolving workplace concerns, and public meetings on agency priorities. The section also highlights recent and emerging trends at the agency level, including the Commission’s efforts to adhere to its strategic enforcement plan.
A summary of the EEOC’s investigations and subpoena enforcement actions, particularly where the EEOC has made broad-based requests to conduct class-type investigations; the chapter also discusses case law addressing the EEOC’s authority to do so.
A chapter on FY 2016 litigation in which the EEOC was a party, with subsections including: (1) pleading deficiencies raised by employers; (2) statutes of limitations cases involving both pattern-or-practice and other types of claims; (3) intervention-related issues, both when the EEOC attempts to enter a case through intervention and when third parties attempt to join as plaintiffs in EEOC-filed lawsuits; (4) class discovery issues in EEOC litigation, including bifurcation, identification of class members and/or communication with the class, and other discovery in pattern-or-practice litigation; (5) other critical issues in EEOC litigation, including reliance on experts, class litigation, and background check litigation; (6) general discovery issues involving both employers and the EEOC in litigation between the parties; (7) favorable and unfavorable summary judgment rulings and lessons learned; (8) trial-related issues; and (9) circumstances in which courts have awarded attorneys’ fees to prevailing parties.
Four report appendices cover details on noteworthy EEOC consent decrees, conciliation agreements, judgments and jury verdicts; appellate cases in which the EEOC has filed an amicus or appellate brief (and a discussion of decided appellate cases last year); a companion guide summarizing select subpoena enforcement actions undertaken by the EEOC during the last fiscal year; and a report of summary judgment decisions by claim type.
“We hope that this Report serves as a useful resource for employers in their EEO compliance activities and provides helpful guidance when faced with litigation involving the EEOC,” the authors said in a statement announcing the publication’s release.