Скачать презентацию The Tipping Point Legal Considerations Regarding Tips That Скачать презентацию The Tipping Point Legal Considerations Regarding Tips That

5126b7a53fac55eb0cf43b345893d7ec.ppt

  • Количество слайдов: 30

The Tipping Point: Legal Considerations Regarding Tips That All Restaurant Employers Should Know October The Tipping Point: Legal Considerations Regarding Tips That All Restaurant Employers Should Know October 5, 2010 Maureen R. Knight Constangy, Brooks & Smith, LLP Fairfax, Virginia 571 -522 -6106 mknight@constangy. com CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946

Tip-Related Laws Ø Federal Wage Hour Law § Fair Labor Standards Act (FLSA) • Tip-Related Laws Ø Federal Wage Hour Law § Fair Labor Standards Act (FLSA) • Minimum Wage ($7. 25) • Overtime (time-and-a-half for hours over 40) Ø State Wage Hour Laws § Minimum Wage and Overtime § Tip-specific Laws CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 2

Federal Wage Hour Law Ø Fair Labor Standards Act Ø Applies to most companies Federal Wage Hour Law Ø Fair Labor Standards Act Ø Applies to most companies § $500, 000 in revenue and § Interstate commerce CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 3

State Wage Hour Laws Ø No federal law preemption § Employers must comply with State Wage Hour Laws Ø No federal law preemption § Employers must comply with the more restrictive law Ø Virginia § Mirrors federal wage hour law and exempts employers covered by federal law Ø D. C. and Maryland § Is more restrictive than federal law regarding tips CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 4

The Tip Credit Ø FLSA and almost every state provides for tip credit Ø The Tip Credit Ø FLSA and almost every state provides for tip credit Ø Tip credit – a credit against minimum wage obligations for tips received CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 5

The Tip Credit Amounts Ø FEDERAL and VIRGINIA § The difference between $7. 25 The Tip Credit Amounts Ø FEDERAL and VIRGINIA § The difference between $7. 25 MW and $2. 13 (currently $5. 12): YOU PAY $2. 13 Ø D. C. § The difference between $8. 25 MW and $2. 77 (currently $5. 48): YOU PAY $2. 77 Ø MARYLAND § 50% of the $7. 25 MW (currently $3. 62): YOU PAY $3. 63 CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 6

The Tip Credit Requirements Ø Three Requirements § Receive more than $30 a month The Tip Credit Requirements Ø Three Requirements § Receive more than $30 a month in tips § Be informed of tip credit law § Retain all tips (except for valid tip pools) Ø Note: tip credit cannot exceed tips actually received. CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 7

The Tip Credit Notice Requirement Ø Employees must be “informed by the employer about The Tip Credit Notice Requirement Ø Employees must be “informed by the employer about the provisions” of the law Ø Information to be given: § Tips will be used to cover some of the MW obligation. § Best practice: Tell them amount of credit. Ø Inform before credit is taken CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 8

Notice Requirement Ø How to provide notice: § § § Best practice: Something in Notice Requirement Ø How to provide notice: § § § Best practice: Something in writing During interview At orientation Through poster Line-item on paycheck Ø Note: It is employer’s burden to prove entitlement to tip credit. CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 9

The Tip Credit Retention Requirement Ø Cannot use tips to cover shortages Ø Cannot The Tip Credit Retention Requirement Ø Cannot use tips to cover shortages Ø Cannot use tips to cover walk-outs Ø Cannot use tips to cover breakages Ø Can reduce tips paid on credit card by amount paid to credit card company Ø Can implement valid tip pool CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 10

Tip Pools Ø Can the employer mandate a tip pool? Ø Contribution amount? Ø Tip Pools Ø Can the employer mandate a tip pool? Ø Contribution amount? Ø Who can participate? CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 11

Tip Pools Can Be Mandatory Ø If otherwise permissible, yes, can mandate Ø Some Tip Pools Can Be Mandatory Ø If otherwise permissible, yes, can mandate Ø Some states require tip pools be voluntary, but not Virginia CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 12

Tip Pools Contribution Amount Ø DOL says that the percentage contribution can’t be more Tip Pools Contribution Amount Ø DOL says that the percentage contribution can’t be more than is “customary and reasonable. ” Ø DOL will not question contribution level that is 15% of tips received (translates roughly to 2% of sales). Ø At least two courts have rejected this restriction. CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 13

Tip Pools Contribution Amount Ø Amounts held not invalid: § 3% of total gross Tip Pools Contribution Amount Ø Amounts held not invalid: § 3% of total gross sales, which at times was 37. 5% of tips [federal appellate court covering KY, MI, OH, and TN] § 5% to 7% of total gross sales, or 40% of tips [Arkansas federal court] § 10% of tips [Indiana federal court] Ø Amounts held invalid: § 4% of sales [Arkansas federal court] CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 14

Tip Pools Participants Ø Who can receive tip pool funds: § “Employees who customarily Tip Pools Participants Ø Who can receive tip pool funds: § “Employees who customarily and regularly receive tips” § Note: they need not receive the tips directly from customers Ø The DOL has said that includes: § § § servers bellhops counter personnel who serve customers busboys/girls service bartenders CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 15

Tip Pools Participants Ø The courts have also allowed: § hostesses § maitre d’s Tip Pools Participants Ø The courts have also allowed: § hostesses § maitre d’s § senior servers Ø Key criteria: directly involved in table-side service CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 16

Tip Pools Participants Ø Employees who cannot participate: § Back-of-the-house employees (cooks, chefs, dishwashers, Tip Pools Participants Ø Employees who cannot participate: § Back-of-the-house employees (cooks, chefs, dishwashers, expediters who do not run food, etc. ) § Managers • Even if they are involved in table-side service CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 17

Tip Pools Participants Ø Who is a manager? § Mere supervisory responsibilities usually not Tip Pools Participants Ø Who is a manager? § Mere supervisory responsibilities usually not enough § Someone with authority to hire and fire, set hourly wages, control payroll, control operations, etc. § But don’t chance it! Ø Starbucks litigation § $105. 8 million judgment regarding shift supervisors (though ultimately overturned) CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 18

Tip Pools Miscellaneous Ø No tip credit = no problem (maybe) § February 2010: Tip Pools Miscellaneous Ø No tip credit = no problem (maybe) § February 2010: federal appellate court held if employer is not taking a tip credit (i. e. , paying servers full minimum wage), it can require servers to tip-out to whomever it chooses. Ø Problems § DOL does not agree § Many state laws will conflict CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 19

Dual Jobs Ø Tip credit applies only when employee is engaged in tipped occupation Dual Jobs Ø Tip credit applies only when employee is engaged in tipped occupation Ø Dual-job employees § Tip credit only for hours spent in tipped occupation CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 20

Related Duties Ø Tip credit is permissible for time spent on duties related to Related Duties Ø Tip credit is permissible for time spent on duties related to tipped occupation § even if duties not directed toward producing tips Ø General types of “related duties” § maintenance and preparatory or closing activities CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 21

Related Duties Ø Examples of “related duties” (as per DOL) § § Cleaning and Related Duties Ø Examples of “related duties” (as per DOL) § § Cleaning and setting tables Toasting bread Making coffee Occasionally washing dishes or glasses Ø Requirements for “related duties” § incidental to the regular duties of the server § generally assigned to servers CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 22

Related Duties Ø Example of duties not generally assigned § Servers had to arrive Related Duties Ø Example of duties not generally assigned § Servers had to arrive two hours before restaurant opened to prepare vegetables for salad bar and kitchen dishes: held, those are duties of chef § Server assigned to prepare salad for entire shift was engaged in separate job, even though servers prepared those salads when no preparer was on duty Ø But, server who had to answer phones and work cash register held to be engaged in related duties, even though restaurant had full-time cashier and receptionists. CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 23

Related Duties Ø Excessive time § DOL guidance: related duties cannot exceed 20% of Related Duties Ø Excessive time § DOL guidance: related duties cannot exceed 20% of server’s shift § Some courts have rejected this limitation; some have accepted it CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 24

Uniforms Defined Ø What is a uniform? § Something with a logo § Specific Uniforms Defined Ø What is a uniform? § Something with a logo § Specific type and style of clothing; examples: tuxedo shirt or specific brand of blouse Ø What is NOT a uniform? § Ordinary street clothes (with variations in dress permitted); examples: khaki pants, white shift, black shoes CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 25

Providing Uniforms Ø Cost of providing uniform cannot bring wages below minimum § Must Providing Uniforms Ø Cost of providing uniform cannot bring wages below minimum § Must provide uniform OR § Reimburse employees for cost of uniform Ø If dress is not uniform, no need for reimbursement or providing set Ø When no laundering reimbursement is required: CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 26

Laundering Uniforms Ø Cost of laundering “uniforms” cannot bring wages below minimum § When Laundering Uniforms Ø Cost of laundering “uniforms” cannot bring wages below minimum § When laundering required? If uniform requires ironing, dry cleaning, daily washing, commercial laundering, or other special treatment § How much reimbursement is required? $5. 15 per week or actual costs CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 27

Uniforms: Laundering Not Required Ø Laundering/maintenance reimbursement NOT required if the uniforms § Are Uniforms: Laundering Not Required Ø Laundering/maintenance reimbursement NOT required if the uniforms § Are made of “wash and wear” material; § May be routinely washed and dried with other personal garments; AND § Do not require ironing or other special treatment. CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 28

Overtime for Tipped Employees Ø Overtime for tipped employees § Overtime rate is NOT Overtime for Tipped Employees Ø Overtime for tipped employees § Overtime rate is NOT 1. 5 times the cash minimum wage rate (i. e. , not 1. 5 times $2. 13 in VA) § Overtime rate is 1. 5 times the minimum wage, minus the tip credit (i. e. , ($7. 25 *1. 5) - $5. 12 = $5. 76 in VA) CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 29

Questions Maureen R. Knight Partner Constangy, Brooks & Smith, LLP Fairfax, Virginia 571 -522 Questions Maureen R. Knight Partner Constangy, Brooks & Smith, LLP Fairfax, Virginia 571 -522 -6106 mknight@constangy. com CONSTANGY B R O O K S & S M I T H, L L P The Employers’ Law Firm, Since 1946 30