On February 23, 2016, the U.S. Court of Appeals for the Ninth Circuit in a 2-1 panel decision upheld the U.S. Department of Labor’s (DOL) 2011 revisions to 29 C.F.R. § 531.52 applying tip-pooling restrictions to employers that do not use a tip credit to satisfy minimum wage obligations.1 Under the revised rules, tips are the property of the employee who receives them, whether or not the employer uses the tip credit. The employer is prohibited from using the tips for any reason other than the tip credit, or in furtherance of a valid tip pool that includes only employees who “customarily and regularly” receive tips. This means that employees in “back-of-house” or other positions that are not “customarily and regularly” tipped may not share in any portion of tips left by customers.
Articles Discussing Wage And Hour Issues In Particular Industries.
Section 203(m) of the Fair Labor Standards Act (FLSA) allows employers of tipped employees to take a tip credit against the employer’s minimum wage obligation if: (a) notice of the tip credit is provided, and (b) tipped employees are allowed to retain all of their tips, except in the case of tipped employees participating in a valid tip pool that only includes other tipped employees. The DOL’s 2011 Regulations provided that employers who do not take a tip credit pursuant to § 3(m) must pay their employees the full cash minimum wage, may not retain employees’ tips, and may not require employees to participate in a tip pool that includes non-tipped employees. The 2011 Regulations were a direct response to, and rejection of, the Ninth Circuit Court of Appeals’ decision in Cumbie v. Woody Woo, 596 F.3d 577 (9th Cir. 2010), which held that § 3(m) does not preclude employers who do not take a tip credit from maintaining a tip pool that includes non-tipped employees (e.g. cooks, dishwashers and other back-of-the-house employees).
A car leasing company’s manager will go to trial on her Equal Pay Act claim because the employer failed in its burden to show the manager’s gender provided “no basis” for the pay differential between her and her male counterpart, a Mississippi federal district court has ruled. White v. Checker Leasing, Inc., No. 1:14CV172-SA-DAS, 2016 U.S. Dist. LEXIS 17066 (N.D. Miss. Feb. 11, 2016).
As we reported back in October 2015 a car dealership, Encino Motorcars, petitioned the Supreme Court to “restore uniformity” to the enforcement of legal precedent and hold that service advisors are exempt from the FLSA’s overtime requirements. On Friday, the Supreme Court agreed to hear the case and hopefully resolve the issue once and for all as to whether service advisors are entitled to overtime pay.
On Friday, the United States Supreme Court agreed to resolve the current split among the Circuit Courts regarding whether “service advisors” are exempt from overtime under the 213(b)(10) exemption, an exemption applicable to any “salesman, partsman, or mechanic” who is primarily engaged in “selling or servicing automobiles.”
Last October, we reported on a petition by an auto dealership asking the U.S. Supreme Court to overturn a ruling by the 9th Circuit Court of Appeals holding that the dealership’s service advisors did not qualify for the FLSA’s exemption for any “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” Last Friday, the Supreme Court granted that petition. Oral arguments in the case, Encino Motorcars, LLC v. Navarro, will likely be scheduled for Spring 2016.
Providing much needed guidance to industry employers still wrestling with fallout from the United States Department of Labor’s drastic reduction to the scope of the companionship exemption, District Court Judge Sandra S. Beckwith held this week that a home care agency properly relied on the temporary vacatur of the DOL’s new federal regulations in electing not to pay overtime to its home healthcare employees during the period while the vacatur was in effect. Bangoy, et al. v. Total Homecare Solutions, LLC, S.D. Ohio No. 1:15-CV-573 12/21/15.
In this country, there are thousands of employees who earn their living off tips or gratuities they receive from customers. Over the last several years, there has been a movement afoot, particularly in the restaurant industry, to eliminate tipping from the workplace. Most recently, Joe’s Crab Shack became the first major restaurant chain to test a “no-tipping” policy at more than a dozen of its locations. Servers, hosts, and bartenders at test locations of Joe’s Crab Shack are now being paid a higher, fixed, hourly wage well above the current federal minimum wage of $7.25 per hour. Joe’s Crab Shack is not the only restaurant experimenting with no-tipping policies. Union Square Hospitality Group announced earlier this year that 13 of its New York City restaurants will go to a no-tipping policy. “No-tipping” restaurants are still far from the norm in the United States but it is definitely a trend to watch.
In the latest litigation chapter involving the U.S. Department of Labor’s rule extending minimum wage and overtime requirements to certain home care workers, a home care industry coalition has taken its challenge of the rule to the U.S. Supreme Court. On November 18, 2015, the plaintiffs in Home Care Association of America v. Weil filed a petition for a writ of certiorari with the Supreme Court seeking review of the U.S. Court of Appeals for the D.C. Circuit’s decision upholding the DOL’s Home Care Rule and reversing the lower court’s decisions vacating the new rule. The Home Care Rule, among other things, prevents third-party employers of home care “companions” or live-in caregivers for the elderly and disabled from availing themselves of the longstanding statutory exemptions from the federal Fair Labor Standards Act’s minimum wage and/or overtime requirements. The Supreme Court has the discretion to grant or deny review of the D.C. Circuit’s decision.
Five days into the DOL’s enforcement of the new rule rendering most home health aides eligible for overtime under the FLSA, questions abound regarding how state Medicaid and Medicare-funded programs will comply with the rule within their current budgets. One new report cautions consumers of home health care and their advocates to be aware of the rule so they can stave off “unintended harms” including, among others, the potential for “cuts in service hours [to] make it very difficult to remain in the community and avoid institutionalization, particularly if [consumers] cannot find additional workers to fill their [needed] hours.”
Chief Justice Roberts’ denial of the Home Care Association of America’s request for stay of issuance of mandate confirms that the new rule rendering many home health aides overtime-eligible is effective, pending appeal. In response to that denial, Wage-and-Hour Administrator David Weil issued a new policy statement confirming that the Department’s “non-enforcement period” for the new rule will end on November 12, 2015. After that, the policy statement indicates the Department will “exercise prosecutorial discretion pursuant to its previously announced time-limited non-enforcement policy” through December 31, 2015.
As you have read in our blog over the years, the misclassification of employees as exempt is one of the primary claims in wage and hour litigation. Misclassification claims can arise in many forms, including the classification of a certain job in a particular industry. Mortgage loan officers anyone? Today’s post is focused on the world of car dealerships – specifically the job of service advisors.
In an order dated October 20, 2015, pursuant to the D.C. Circuit’s mandate issued on October 13, 2015, U.S. District Court Judge Richard Leon entered summary judgment in favor of the U.S. Department of Labor (DOL) in Home Care Association of America v. Weil. In this case, the U.S. Court of Appeals for the District of Columbia Circuit upheld the DOL’s Home Care Rule, which, among other things, prevents third-party employers of home care “companions” or live-in caregivers for the elderly and disabled from availing themselves of the longstanding statutory exemptions from the federal Fair Labor Standards Act’s minimum wage and/or overtime requirements.
The Department of Labor (DOL) promulgated a rule that brings home care workers, employed by third parties, within the protection of the Fair Labor Standards Act (FLSA). As a result, those home care workers employed by an entity other than the individual, or the family of the individual for whom they are caring, will be entitled to be paid minimum wage and overtime under the new rule.
As New York’s hospitality industry prepares for a reduced tip credit and a fast food minimum wage, one New York restaurateur has announced its intention to eliminate tipping and thus, by extension, use of the tip credit: New York City’s Danny Meyer. This lengthy Eater feature discusses Meyer’s audacious new Hospitality Included program, noting the pitfalls encountered by other fine dining establishments which have moved away from American dining’s deep-rooted tipping conventions. Watch this space for further developments regarding NYS Department of Labor regulation of the hospitality industry and industry responses thereto.