Category Archives: Federal Issues

Federal Tip Credit and Tip Pooling Basics

The Fair Labor Standards Act (FLSA) outlines federal tip credit and tip pooling provisions.

What is tip credit and tip pooling under Federal Law?

  • Under a valid tip credit policy, employers are able to pay tipped employees an hourly rate that is less than minimum wage – provided that the tipped employee’s hourly wage plus tips equals or exceeds the required minimum wage.
  • A tip pooling agreement requires tipped employees to deposit a portion of their customer tips into a common “tip pool” to be shared with other employees. A valid Tip Pooling arrangement must meet all the requirements of the FLSA provisions (and any state requirements) for tipped employees.

Continue reading Federal Tip Credit and Tip Pooling Basics

Going Wild About Service Animals at Work

Animals as a public accommodation.

A growing public trend is the presence of service animals in places like stores, restaurants, schools, airports and job sites. The basis for this trend is not a new one. It comes from Title III of the Americans with Disabilities Act (ADA) which guarantees people with disabilities the “full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation.”  This guarantee from the ADA allows for the use of service animals to help people with disabilities accomplish these public accommodations.

The difference between Service Animals, Emotional Support Animals, and Therapy Animals.

Some employers react negatively to the idea of allowing service animals in the workplace. This might be due to a misunderstanding of the difference between service animals, emotional support animals, and therapy animals. These are entirely different categories of animals.

Service animals are not considered to be pets. These are trained animals that must qualify in two categories to be protected as service animals under the ADA: Continue reading Going Wild About Service Animals at Work

NEW EEOC Case Reminds Employers That Sex Discrimination Isn’t Just for Women – Men Can Be Victims Too

Generally, when one thinks about sex discrimination what comes to mind is a woman being discriminated against by her employer because of her gender.  While that is typically the case, employers should remember that sex discrimination isn’t reserved for women – men can be victims too.  A recently settled EEOC lawsuit (EEOC v. Park School of Baltimore Inc.) makes this point clear to employers with a $41,000 price tag.

In this case, a private school in Maryland had hired a man to coach its softball team.  The coach was given a one-year contract in 2014, which the school then renewed for two additional years (2015-2016).   At the end of the 2016 season, the coach was informed that, despite his good performance, the contract would not be renewed for 2017 because the school preferred “female leadership” for its softball team.

The coach filed a claim with the EEOC alleging that he had been discriminated because of his gender and the EEOC agreed, filing a lawsuit against the school for gender discrimination.

While the case was quickly settled, it serves as an important reminder to all employers that “Title VII protects both men and women from unequal treatment based on gender.”

Cautious Optimism for Holding Disabled Employees Accountable for Attendance Issues

Many employers and HR professionals view disabled employees as being immune to disciplinary actions when they have attendance violations. This view is often based on past experience and the many negative “war stories,” that are often shared when employers are sued for disability discrimination – even after they believe that the were doing everything correctly.  The stress of these stories and experiences often causes business leaders to become overly cautious and implement practices where disabled employees are never terminated and never disciplined. While that might suit some situations, recent appellate court decisions have shown that such over-corrections might not be necessary in every case.

There are three recent decisions that come from the Court Appeals that point to the same conclusion – employers can consider attendance as essential to the function of just about and job and in some cases can terminate disabled employees for attendance related issues. The caveat of doing such terminations is that the attendance issues must not be for reasons that are protected leave under laws such as the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and any state laws of this nature, including local sick leave laws. When unapproved absences are not related to a protected leave, these decisions show that courts have leaned in favor of employers being able to terminate disabled employees. Continue reading Cautious Optimism for Holding Disabled Employees Accountable for Attendance Issues

Employers Beware — You Cannot Always Require Employees Exhaust Paid Leave Benefits During FMLA Leave

When administering FMLA , employers are generally advised to run FMLA concurrently with other leaves for which the employee may be eligible– as this practice prevents leave stacking.

However, when drafting FMLA policies, how an employer handles the use of paid leave during FMLA is commonly overlooked.  While most leave policies require employees to use their earned vacation, sick or PTO time concurrently with FMLA leave, employers tend to overlook the FMLA regulation that prohibits employers from requiring employees to use paid leave during FMLA.

Employers should consider how to handle situations where an employee who is requesting FMLA also has some type of paid leave available for his or her use. Continue reading Employers Beware — You Cannot Always Require Employees Exhaust Paid Leave Benefits During FMLA Leave

NEW DEVELOPMENT: Certain Truck Drivers Exempted From California’s Rest and Meal Period Requirements

Good news for certain California trucking companies — California’s meal period and rest break requirements no longer apply to truck drivers who are regulated by the U.S. Department of Transportation’s hours-of-service requirements.

How did this happen?

To understand how this happened, we need to first give a brief history of this issue.

California’s meal period and rest period laws are quite onerous – especially for trucking companies.  These laws require all California employers provide employees with a duty-free 30-minute meal period to begin before the employee completes five hours of work; employers must also provide paid 10-minute duty-free rest breaks for every four-hour work period or “major fraction thereof.”   Among the problems that trucking companies have with complying with these requirements is actually proving compliance with the requirements.  How does one prove that a driver actually took the rest and/or meal period? Continue reading NEW DEVELOPMENT: Certain Truck Drivers Exempted From California’s Rest and Meal Period Requirements

NEW CASE: NLRB Changes Its Independent Contractor Test

In a recent decision (SuperShuttle DFW, Inc.), the NLRB has overruled a 2014 decision (FedEx Home Delivery) and reinstated the common law independent contractor test as the standard the NLRB will use when evaluating whether an independent contractor is properly classified.

In its 2014 FedEx Home Delivery decision, the NLRB had issued a new independent contractor test decided that, in determining whether an individual is an independent contractor or an employee, “entrepreneurial opportunity represents merely ‘one aspect of a relevant factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business.’”

 This new decision (SuperShuttle DFW, Inc.), the NLRB has returned to the common law test to determine whether an individual is an independent contractor (and thereby not a covered individual for purposes of the NLRA).  These factors include: Continue reading NEW CASE: NLRB Changes Its Independent Contractor Test

NEW GUIDANCE: DOL Reminds Employers How To Properly Calculate The Regular Rate Of Pay

The US Department of Labor (DOL) recently issued an opinion letter that reminds employers how to properly calculate an employee’s regular rate of pay for purposes of overtime compensation.

In this letter, the DOL was responding to an inquiry about whether a company’s compensation plan, which pays an average hourly rate that may vary from workweek to workweek, complies with the Fair Labor Standards Act (FLSA).  Specifically, to calculate weekly pay, the company was multiplying an employee’s time with clients by his or her hourly pay rate for such work.  The employer then divided the product by the employee’s total hours worked.  The company then explained that its “standard rate of pay” was $10 per hour and that it paid overtime based on the $10 per hour rate.

According to the DOL, while the employer’s plan likely complied with the FLSA’s minimum wage requirement (that an employee is paid at least minimum wage for every hour worked), it might not comply with the FLSA’s overtime requirement. Continue reading NEW GUIDANCE: DOL Reminds Employers How To Properly Calculate The Regular Rate Of Pay

NEW CASE: Without More, Full-Time Attendance Is Not An Essential Job Function

In a recent case (Hostettler v. College of Wooster), the US Sixth Circuit Court of Appeals held that a requirement that an employee work full time, without a duties-based reason for the requirement.

In this case, the plaintiff was an HR Generalist at College of Wooster. The plaintiff had recently had a baby and, when she was released to return to work, her doctor provided a restriction that the plaintiff could only work part-time because the plaintiff was suffering from postpartum depression and separation anxiety.

Initially, the employer granted the requested accommodation – allowing the employee to work 5 half days per week.  The plaintiff worked that modified schedule for one month and then turned in a note from her doctor stating that she would need to continue working the modified schedule for an additional two months.  The next day, the employee was terminated.  The reason given – the department could not function properly because the plaintiff was not working full-time and working a full-time schedule was an essential function of the HR Generalist position.  The plaintiff filed a lawsuit claiming that her termination was discriminatory. Continue reading NEW CASE: Without More, Full-Time Attendance Is Not An Essential Job Function

NEW RULE: DOL Eliminates “80/20” Tip Credit Rule

On November 8, 2018, the US Department of Labor issued a new Opinion letter (Opinion Letter FLSA 2018-27) wherein the DOL rescinded the 80/20 tip credit rule.  Under this rule, employers were not able to use the tip credit for tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties.

In lieu of this rule, the DOL has stated that ““We do not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the Act are met.”