The practice of “tip-pooling,” which refers to the sharing of tips between “front-of-house” staff (servers, waiters, bartenders) and “back-of-house” staff (chefs and dishwashers), has been in the news recently as the Trump Department of Labor (“DOL”) seeks to roll back a 2011 Obama-era rule limiting the practice under the Fair Labor Standards Act (“FLSA”).
Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers. Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage. By way of background, the FLSA requires employers to pay employees a minimum wage (currently $7.25 per hour) plus overtime for all hours worked over 40 in a single workweek. Employees who “customarily and regularly receive tips” must still receive the minimum wage, but employers may elect to take a “tip credit” by counting up to $5.12 per hour of those employees’ tips toward the minimum wage, meaning employers may pay a reduced wage of $2.13 to tipped employees. Historically, employers that take the tip credit have been prohibited from sharing money from a tip-pooling system to employees who do not traditionally receive direct tips (cooks, dish washers, etc.). In 2011, the DOL extended the tip-pooling prohibition to apply to employers even if they do not take the tip credit and pay their employees the full federal minimum wage.
Equal pay issues continue to be a focus for new state legislation and of the private plaintiff’s bar. Partner Emily Burkhardt Vicente and Counsel Christy Kiely discuss how employers can best position themselves to defend against claims of compensation discrimination. View the 5-minute video here.
Date: Thursday, November 16, 2017
Time: 12:00 PM to 1:00 PM PST
Please join Hunton & Williams LLP for a complimentary webinar that will address current concerns faced by employers in California. This program, co-sponsored by Welch Consulting, will examine the following issues:
- Fair Pay issues
- Recent PAGA concerns
- “Ban the Box” and background checks
- Sick leave
- Changing local and regional ordinances
- Sexual harassment
We will also discuss ways to address potential risks proactively, including the use of statistical analyses to avoid future litigation.
We hope you can join us for what should be a very interesting and educational program.
Register by clicking here.
Questions? Contact Visalaya Hirunpidok at email@example.com or 213.532.2003.
Gender Pay Transparency Act Vetoed. On Sunday, October 15, California Governor Jerry Brown vetoed the California Gender Pay Gap Transparency Act, AB 1209, a proposed law that would have required (1) large employers in California to collect and disclose data on how they’re paying men and women differently, and (2) the California Secretary of State to publicly post the data on a state government website. The proposal – previously deemed a “job killer” by the California Chamber of Commerce, and characterized as the “public shaming of California employers” bill by many – was strongly opposed by the business community. The Governor expressed concern about the proposal’s ambiguous language and expressed concern that the ambiguity “could be exploited to encourage more litigation than pay equity.” Continue Reading California Governor Vetoes and Approves Pay Equity Bills
The day employers have been waiting for, has finally arrived. The government has indefinitely stayed the requirement that companies begin reporting “Component 2” wage data in their EEO-1 Reports. Companies around the country are breathing a collective sigh of relief.
The United States Court of Appeals for the Tenth Circuit recently held in Marlow v. The New Food Guy, Inc. that an employer that pays its employees a set wage over the minimum wage can retain tips for itself and does not have to share them with employees. No. 16-1134 (10th Cir. June 30, 2017).
The New Food Guy, Inc., a Colorado company doing business as Relish Catering, employed Bridgette Marlow to provide catering services. Relish paid Marlow a base wage of $12 an hour and $18 an hour for overtime. Although this was well above the $7.25 federal minimum required by the Fair Labor Standards Act (FLSA), Marlow sued Relish because it did not increase her wage with a share of the tips paid by customers. Relish moved for a judgment on the pleadings and the United States District Court for the District of Colorado held in its favor. After failing to get the Colorado court to reconsider the judgment, Marlow appealed.
Imagine that you are a company with two openings for the same position. After selecting the two most qualified candidates, you offer each candidate a salary equal to his or her prior salary, plus 5%, pursuant to your established policy for setting new hire salaries. On its face, your policy has nothing to do with sex, but does it violate the Federal Equal Pay Act? This was the issue addressed by the Ninth Circuit Court of Appeals in the recent decision Rizo v. Yovino, No. 16-15372, slip op. at 11–12 (9th Cir. Apr. 27, 2017).
On March 27, 2017, President Trump signed H.J. Res. 37, blocking the Fair Pay and Safe Workplaces Rule, the controversial rule enacted by the Federal Acquisition Regulatory (FAR) Council in August 2016, that legislators have criticized as a method to blackball federal contractors. The bill’s signing follows the U.S. Senate’s March 6, 2017 vote of 49-48 (along party lines) to formally disapprove of the rule.
Beginning next week, on March 13, 2017, San Jose employers must offer existing part-time employees additional work hours before hiring any temporary, part-time, or new worker. This is a result of a vote last fall by voters in San Jose, California who approved “The Opportunity to Work Ordinance” (Ordinance No. 2016.1, codified at Chapter 4.101 of the San Jose Municipal Code) – a local measure that directs employee hours and hiring practices.
San Jose’s Office of Equality Assurance, the local agency tasked with monitoring, investigating, and enforcing the Ordinance, recently issued its Opportunity to Work FAQs, which provides additional guidance on how employers can comply with the new ordinance. Following more comprehensive scheduling ordinances passed in San Francisco and Emeryville last year, San Jose is the third northern California city to enact a scheduling ordinance.