By Adam Abrahms
Outside of California, employers frequently enter into agreements with non-exempt salaried employees that provide for a set weekly salary that includes overtime for a specific number of hours and is based on a defined regular rate of pay. For example, an employer may agree to pay an employee as salary of $950 a week for 45 hours of work resulting in the employee being paid $20/hour for the first 40 hours and time and half ($30) for the overtime hours. These agreements typically provide that if an employee works more than the established hours, the employee would be paid ...
By: Kara M. Maciel and Elizabeth Bradley
The U.S. Court of Appeals for the D.C. Circuit is rapidly becoming the champion of employers in the fight against the National Labor Relations Board’s (the “Board”) attempt to implement radical new rules governing the workplace.
Last month, on April 17, 2012, the D.C. Circuit enjoined the implementation of the Board’s rule requiring that employers post a notice informing employees of their right to join or form a union. Yesterday, the D.C. Circuit struck another blow to the Board by holding that its proposed union election rules ...
By Kara Maciel and Casey Cosentino
The restaurant and hospitality industries are no strangers to the tidal wave of wage and hour class action lawsuits. Restaurants and hotel operators located in states with employee-friendly laws like Massachusetts, New York, and California, are particularly vulnerable. This vulnerability was recently confirmed on April 30, 2012, when Texas Roadhouse, Inc. agreed to pay $5 million to settle a putative class action suit filed by wait staff employees from nine restaurants in Massachusetts.
In Crenshaw, et. al, v. Texas Roadhouse, Inc. (No ...
By Kara Maciel and Casey Cosentino
The restaurant and hospitality industries are no strangers to the tidal wave of wage and hour class action lawsuits. Restaurants and hotel operators located in states with employee-friendly laws like Massachusetts, New York, and California, are particularly vulnerable. This vulnerability was recently confirmed on April 30, 2012, when Texas Roadhouse, Inc. agreed to pay $5 million to settle a putative class action suit filed by wait staff employees from nine restaurants in Massachusetts.
In Crenshaw, et. al, v. Texas Roadhouse, Inc. (No ...
By Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman, with Teiko Shigezumi
On April 25, 2012, the U.S. Equal Employment Opportunity Commission ("EEOC") issued an enforcement guidance document titled "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et. seq." (the "Guidance"), with respect to employers' use of arrest and conviction information in connection with employment decisions.
Disparate Treatment v. Disparate Impact
Although ...
By Eric J. Conn and Casey M. Cosentino
In what has been good news for hospitality employers, the past month has been a rough stretch for OSHA in terms of Injury and Illness Recordkeeping enforcement. As we reported last month on the OSHA Law Update Blog, in March, the Seventh Circuit beat back OSHA’s attempt to expand the meaning of “work related” for purposes of determining whether an injury or illnesses is recordable. Then last month, the District of Columbia Circuit further and dramatically limited OSHA’s authority to cite Recordkeeping violations, by insisting that the ...
By Michael Kun
Yesterday, only weeks after its long-awaited Brinker v. Superior Court decision, the California Supreme Court issued another important ruling on California meal and rest period laws.
In Kirby v. Immoos Fire Protection, Inc., the Supreme Court ruled that neither party may recover attorney’s fees on claims involving meal and rest periods. The Court analyzed the legislative history of the meal and rest period provisions and concluded, “We believe the most plausible inference to be drawn from history is that the Legislature intended [meal and rest period] claims to ...
By Michael Kun
Yesterday, only weeks after its long-awaited Brinker v. Superior Court decision, the California Supreme Court issued another important ruling on California meal and rest period laws.
In Kirby v. Immoos Fire Protection, Inc., the Supreme Court ruled that neither party may recover attorney’s fees on claims involving meal and rest periods. The Court analyzed the legislative history of the meal and rest period provisions and concluded, “We believe the most plausible inference to be drawn from history is that the Legislature intended [meal and rest period] claims to ...
by Carrie Corcoran, Matthew T. Miklave, and Susan Gross Sholinsky
The U.S. Equal Employment Opportunity Commission ("EEOC") has issued a long-awaited final rule ("Final Rule"), which amends the regulation on the "reasonable factors other than age" ("RFOA") defense available under the Age Discrimination in Employment Act ("ADEA"). The Final Rule is available at 29 C.F.R. Part 1625. The EEOC previously published proposed rules regarding the RFOA defense on March 31, 2008, and then on February 18, 2010. The Final Rule takes into account public comments received on those proposals.
By Eric J. Conn and Casey M. Cosentino
For years, OSHA’s Hazard Communication Standard (“HazCom”) has been the standard most frequently cited against hotel and other hospitality employers.
In FY 2011 37 hotel companies were cited for violations of the HazCom Standard, including, primarily, alleged failures to:
(1) maintain a written Hazard Communication Program;
(2) ensure each container of hazardous chemicals (such as cleaning agents) is labeled, tagged, or marked;
(3) maintain a complete set of Material Safety Data Sheets (“MSDS’s”) for each hazardous ...
Last year, California passed the Wage Theft Prevention Act (AB 469) which amended several existing Labor Code sections and added several new ones. Most notably, in addition to criminalizing certain wages payment violations, the statute created a new mandate for California employers to provide each new employee a written notice upon hire containing individual information, including their regular rate of pay, overtime rates, and regular pay day. The law also required the California Division of Labor Standards Enforcement (DLSE) to prepare a template of the ...
By: Kara M. Maciel and Matthew Sorensen
Social media has become an increasingly important tool for businesses to market their products and services. As the use of social media in business continues to grow, companies will face new challenges with respect to the protection of their confidential information and business goodwill, as several recent federal district court decisions demonstrate.
Christou v. Beatport, LLC (D. Colo. 2012), Ardis Health, LLC v. Nankivell (S.D. N.Y. 2011), and PhoneDog v. Kravitz (N.D. Cal. 2011) each involved former employees who took the login ...
By: Michael Kun
This morning, the California Supreme Court has just issued its long-awaited decision in the Brinker case regarding meal and period requirements. It is largely, but not entirely, a victory for employers. A copy of the decision is here.
A few highlights of the decision:
On rest periods, the Court confirmed the certification of a rest period class because Brinker’s written policy arguably did not comply with the law as to the second rest period in a day. In so doing, it clarified when employees are entitled to rest periods:
· Employees are entitled to 10 minutes’ rest for ...
By Michael Kun
This morning, the California Supreme Court has just issued its long-awaited decision in the Brinker case regarding meal and rest period requirements. It is largely, but not entirely, a victory for employers. A copy of the decision is here.
A few highlights of the decision:
On rest periods, the Court confirmed the certification of a rest period class because Brinker’s written policy arguably did not comply with the law as to the second rest period in a day. In so doing, it clarified when employees are entitled to rest periods:
- Employees are entitled to 10 minutes’ rest ...
By: Jay P. Krupin and Dana Livne
Historically, the United States has continuously attracted international commerce and investment. In recent years, in spite of a challenging economic situation, international hospitality groups continue to seek opportunities in the US for financial growth, promotion, and strategic reasons. When they do so, they must comply with unfamiliar and complex labor and employment laws which are constantly changing. In the US especially, the increasingly litigious environment can affect every step of the enterprise – right from the start ...
by Amy J. Traub, Anna A. Cohen, and Jennifer A. Goldman
Effective April 3, 2012, the Equal Employment Opportunity Commission ("EEOC") extended its existing recordkeeping requirements under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act to employers covered by Title II of the Genetic Information Nondiscrimination Act of 2008 ("GINA"). The burden on employers to comply with the recordkeeping requirements under GINA will likely be minimal, as employers should already have recordkeeping policies in effect for personnel and other employment ...
By Douglas Weiner and Meg Thering
In one of the many “wrinkles” in Fair Labor Standards Act (“FLSA”) litigation, settlements of wage and hour disputes between an employer and its employees are only enforceable if supervised by the U.S. Department of Labor or approved by a court. Courts will approve settlements if they are “fair”; however, as demonstrated in a recent decision arising out of New Jersey - Brumley v. Camin Cargo Control - courts may need to be reminded that employers also have rights and legitimate interests. The Brumley Court took what was a bargained-for ...
Wage garnishment can pose a number of potential problems for hospitality businesses. This is particularly true where the employee whose pay is subject to garnishment receives tips.
Garnishment is a legal procedure in which an employee’s earnings must be withheld by an employer for the payment of a debt under a court order. When faced with a garnishment order involving a tipped employee, the employer must determine whether all or part of the employee’s tips must be included in the amounts withheld under the garnishment order. This question turns on ...
Wage garnishment can pose a number of potential problems for hospitality businesses. This is particularly true where the employee whose pay is subject to garnishment receives tips.
Garnishment is a legal procedure in which an employee’s earnings must be withheld by an employer for the payment of a debt under a court order. When faced with a garnishment order involving a tipped employee, the employer must determine whether all or part of the employee’s tips must be included in the amounts withheld under the garnishment order. This question turns on ...
By: Paul Rosenberg
The National Labor Relations Board (“NLRB”) seems intent upon helping unions organize employees. It continues to pass rules, issue decisions, or announce new policies which will almost certainly facilitate union organizing. The latest example occurred on March 22 when the NLRB announced that in the next two weeks it is launching an “educational” website aimed at informing non-union employees of their rights under the National Labor Relations Act (“NLRA”). In conjunction with this unprecedented website the NLRB is preparing brochures which will ...
By: Jordan Schwartz
Like many attorneys, I spend a significant amount of time traveling, whether it is to meet with clients, take depositions, or conduct training sessions. Business-related travel certainly is not unique to the legal industry. In fact, more and more employees in other industries, including the hospitality industry, are spending a greater amount of time traveling for work than ever before. Such travel typically includes attending out-of-state trade shows, recruiting visits, job fairs, and sales calls. As an exempt employee, compensation for travel ...
Wage and hour investigations and class action lawsuits continue to be a potentially serious problem for many employers, resulting in an abundance of new cases filed and many large settlements procured. In addition, in September 2011, under the guidance of the Obama Administration, the Department of Labor and IRS announced an effort to coordinate with each other to address misclassification of employees as independent contractors, which is resulting in additional investigations, fines, and/or legal liability levied on an employer.
By Amy Traub and Desiree Busching
Like the fashions in the magazines on which they work and the blockbuster movies for which they assist in production, unpaid interns are becoming one of the newest, hottest trends— the new “it” in class action litigation. As we previously advised, there has been an increased focus on unpaid interns in the legal arena, as evidenced by complaints filed by former unpaid interns in September 2011 against Fox Searchlight Pictures, Inc. and in February 2012 against Hearst Corporation. In those lawsuits, unpaid interns working on the hit ...
Wage Hour laws and regulations are complex, non-intuitive, and constantly changing. Mistakes in wage and salary administration have led to class actions resulting in six and seven figure recoveries against the most sophisticated employers - banks and major industrial giants as well as smaller employers without in-house legal and high level Human Resources officials. Peter M. Panken, Lauri Rasnick and Douglas Weiner in our New York Office have recently authored an article in conjunction with a major national Continuing Legal Education program in Washington entitled: “ ...
Remember that all new H-1B petitions must be filed on March 30, 2012, to ensure that they are counted toward the 2013 H-1B cap.
The annual H-1B season has arrived! The federal government is authorized by statute to approve only 65,000 new H-1B visas each fiscal year, plus an additional 20,000 H-1B visas set aside for applicants who have master's degrees from accredited American universities. The federal government's fiscal year begins on October 1, but the governing regulations permit employers to apply for new H-1B non-immigrant visas up to six months in advance. Hence, the filing ...
By: Kara M. Maciel
Today, March 15, marks the effective date of the 2010 ADA Standards for hotels, restaurants, retailers, spas, golf clubs and other places of public accomodation. As we have written about previously, there are several new requirements and obligations that the hospitality industry must implement in order to ensure their properties are compliant with the new regulations. Below are five steps every hospitality owner and operator should consider to avoid costly fines and lawsuits:
1. Implement new reservation policies for blocking off rooms and ensuring ...
By: Paul Rosenberg
As described in our blog on January 5, 2012, the National Labor Relations Board’s (“NLRB”) new rules governing union elections introduce a host of changes which will place employers at a disadvantage. The new rules will go into effect on April 30, 2012, subject to a legal challenge pending in federal court. However, they are seemingly just the beginning of the NLRB’s concerted effort to drastically change a process which has been in place for several decades. A recent decision ignoring 75 years of precedence is illustrative.
By: Mark M. Trapp
In these challenging economic times, many private clubs are finding it increasingly difficult to attract new members, or to retain existing members. Over the last few years many clubs have lost members, and many more are facing substantial drops in revenues due to a decline in money spent by members on activities such as golfing or dining out. Many golf, country and social clubs are finding it difficult to sustain their amenities and level of service.
Because the economic situation is decreasing the potential membership pool, many clubs are offering incentives to ...
By: Kara M. Maciel and Casey Cosentino
We were recently asked by a client to provide guidance on the wage and hour issues associated with company-provided on-line training programs for non-exempt employees. Questions were raised as to when the training is "voluntary" and whether the time must be compensated if the training is completed at home using a personal computer. The answer stems from federal wage and hour law, which provides that such time is likely compensable for non-exempt employees.
The Fair Labor Standards Act requires employers to ...
By Casey M. Cosentino and Eric J. Conn
“Texting while driving” is an epidemic in America, which has prompted forty-two states and the District of Columbia to ban (completely or partially) this conduct for drivers. Here’s a map of the U.S. states that have enacted some ban on texting while driving. Studies suggest that texting while driving distracts drivers’ cognitive focus and removes their eyes from the road and hands from the wheel. It is not surprising, therefore, that distracted driving is attributed with sixteen percent (16%) of all traffic fatalities in 2009.
By Amy Traub and Desiree Busching
On February 1, 2012, a former intern of the Hearst Corporations’ Harper’s Bazaar filed a class action lawsuit on behalf of herself and others similarly situated. The lawsuit alleges that the company violated the Fair Labor Standards Act (“FLSA”) and applicable state laws by failing to pay minimum wage and overtime to interns. The use of unpaid interns is a widespread practice, especially in the retail, publication, and real estate industries, as well as in Hollywood. In fact, in September 2011, a similar lawsuit was filed against Fox ...
By: Casey Cosentino
A hotel management company was recently hit with a putative class action in federal court for allegedly failing to compensate hotel employees overtime pay at one and one-half times their regular rate of pay for all hours worked over 40 hours in a workweek. As the chief engineer, the lead plaintiff was classified as an executive employee and, thus, was exempt from overtime requirements under the Fair Labor Standards Act (“FLSA”). The lead plaintiff asserts, however, that he was misclassified under the Executive exemption because he “regularly and ...
By John F. Fullerton, III, Douglas Weiner, and Meg Thering
The plague of lawsuits for unpaid overtime compensation by employees who claim that they were misclassified by their current or former employer as “exempt” from overtime under the “administrative” exemption of the Fair Labor Standards Act shows no signs of receding. These lawsuits continue to present challenges to employers, not just in terms of the burdens and costs of defending the cases, but in the uncertainty of the potential financial exposure.
Read the full article online.
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If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
By Michael Kun and Aaron Olsen
Plaintiffs seeking to bring state law wage-hour class actions against employers in the trucking industry have run into a significant road block in California. For the second time in a year, a United States District Court has held that claims based on California’s meal and rest period laws are preempted by federal law.
In Esquivel et al. v. Performance Food Group Inc., the plaintiffs claimed the defendant scheduled their delivery routes such that the plaintiffs were unable to take duty-free meal periods. The defendant argued that the Federal Aviation ...
by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman
On January 25, 2012, the Federal Trade Commission ("FTC") sent warning letters to three companies that market, in total, six mobile phone applications ("Apps") that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act ("FCRA"). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps' marketers that, if they have reason to believe that the background reports provided will be ...
By Michael Kun
Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors. http://www.dol.gov/opa/media/press/whd/WHD20120257.htm
The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers. Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue. And California has ...
by David D. Green, Frank C. Morris, Jr., Allen B. Roberts
Two recent decisions on arbitration, one from the National Labor Relations Board ("NLRB" or "Board") and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the ...
By Michael Kun
Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors.
The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers. Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue. And California has enacted a new statute that provides additional penalties in ...
Arbitration agreements can be an effective way for employers in the hospitality industry to streamline and isolate an employee’s potential claims on an individual basis and protect themselves from a proliferation of lawsuits with many plaintiffs or claimants. But the National Labor Relations Board’s (“Board”) January 6, 2012 decision in D.R. Horton, Inc. and Michael Cuda, notably finalized by two Board Members on departing Member Craig Becker’s final day, has caused significant confusion as to how employers can enforce such arbitration ...
By: Ana S. Salper
No governmental body has been more active in addressing social media’s impact on the workplace than the National Labor Relations Board (“Board”). For both unionized and non-unionized employers, the Board has been aggressively scrutinizing the contours of employer discipline of employees for their activities on social media sites, and has regulated and constricted the scope and breadth of employer social media policies. Following his first report in August 2011, National Labor Relations Board Acting General Counsel Lafe Solomon has now released a ...
By: Evan Rosen
As Hospitalty Labor and Employment Law Blog readers are aware, on August 30, 2011, the National Labor Relations Board (the “Board”) issued a rule requiring employers to post notices informing employees of their right to join or form a union. We blogged about the impact of the notice and its requirements on hospitality employers here. The rule was originally supposed to go into effect in November, but was subsequently pushed back to January 31, 2012 as a result of mounting criticism against the rule. Indeed, several lawsuits have been filed by business ...
By: Kara M. Maciel
As hoteliers and hospitality employers know, the upcoming March 15, 2012 deadline for the 2010 ADA Standards will have significant impact on hotel operations. Some of the regulations involve new features that previously had not been regulated by the ADA, including swimming pools, spas, exercise facilities, golf and sauna and steam rooms. All newly constructed recreational facilities built after March 15, 2012 must comply with the new standards; whereas, existing facilities must meet the new standards as soon as readily achievable. For hoteliers, some of ...
by Marisa S. Ratinoff, Susan Gross Sholinsky, Eric A. Cook, and Jennifer A. Goldman
California’s Wage Theft Prevention Act of 2011 (“CAWTPA”) went into effect on January 1, 2012. The CAWTPA requires most private-sector employers to provide notice to non-exempt employees of certain wage payment information, among other things. As we previously reported (see Act Now Advisory “New California Laws Increase Penalties for Employee Misclassification and Wage Theft”), the CAWTPA requires the Labor Commissioner (“Commissioner”) to create a template for employers to ...
by Maxine H. Neuhauser and Amy E. Hatcher
With the start of 2012, New Jersey employers may find it useful to review the notification requirements relating to employees' workplace rights and responsibilities under state law. This Act Now Advisory serves as a reminder and summary of New Jersey's notification requirements applicable to most employers.
Employers are mandated under New Jersey law to display official posters informing employees of the law relating to their rights and responsibilities. An employer that fails to comply with these requirements may face monetary fines and ...
By Peter M. Panken, Michael S. Kun, Douglas Weiner and Larissa Lalor-Rosado
Hotels, restaurants and private clubs all rely on sponsored events, banquets and social soirees for the profitability of their operation. Most employ one or more “managers” to solicit the business, work with the clients, detail the services to be provided, prepare the contract and even negotiate a price. In most instances higher management must approve the terms the managers propose including the financial arrangements. In other cases the basic terms are set forth in directions which can only be varied ...
By Dean Silverberg, Evan Spelfogel, Peter Panken, Douglas Weiner, and Donald Krueger
Reversing its prior stance, the U.S. Department of Labor (“DOL”) proposes to extend the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”) to domestic workers who provide in-home care services to the elderly and infirm. See Notice of Proposed Rulemaking to Amend the Companionship and Live-In Worker Regulations. In 1974, when domestic service workers were first included in FLSA coverage, the DOL published regulations that provided an exemption for such ...
By Peter M. Panken, Michael S. Kun, Douglas Weiner, and Larissa Lalor-Rosado
Misclassification of employees as exempt from overtime compensation has become a cottage industry for plaintiff’s lawyers and for the United States Department of Labor (“DOL”) in the Obama years. One of the most difficult issues is whether employees meet the so-called administrative exemption to the Wage Hour laws. In Hines v. State Room, the United States Circuit Court in New England offered some clarity and help to beleaguered employers holding that former banquet sales managers were exempt ...
By: Jordan Schwartz
The holiday season is often the busiest time of the year for hospitality employers. At the same time, employees may appreciate the opportunity to earn more during these busy months. Consequently, there may be occasions when an employer places an employee in a dual capacity role. For example, from November through January, a hotel may permit (or require) a housekeeping attendant to also function as a front desk reservation assistant. While assigning (or permitting) an employee to work at another post with a different rate of pay is generally permissible ...
By: Paul Rosenberg
On December 9, 2011, the U.S. Court of Appeals for the District of Columbia (“the Court”) refused to enforce a National Labor Relations Board (“NLRB”) decision that a hotel unlawfully suspended hospitality workers who engaged in a work stoppage. Fortuna Enters. LP v. NLRB, D.C. Cir., No. 10-1272 (December 9, 2011). In this case, UNITE HERE – the largest hospitality union in the country – was seeking to organize employees of the hotel. While the union organizing drive was ongoing, the hotel suspended an employee pending an investigation into whether ...
By Dena L. Narbaitz and Marisa S. Ratinoff
While everyone awaits the California Supreme Court's ruling in Brinker Restaurant Corp. v. Superior Court (Hohnbaum) – which is expected sometime in early 2012 and will determine the scope of an employer's meal and rest period obligations – employers must not lose sight of other important developments in California employment law. Below are brief summaries of some of the legislative enactments in California that will affect employers. Unless otherwise noted, these laws will take effect on January 1, 2012.
By Michael Kun
On January 1, 2012, the minimum wage for employees working in San Francisco will rise to $10.24 per hour.
This is, to our knowledge, the first time the minimum wage in any U.S. city has ever exceeded $10 per hour.
Employers with employees in San Francisco will need to make sure that they make appropriate adjustments to their payroll systems and practices to account for the increase.
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If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
By: Michael Thompson
In Ibanez v. Abbott Laboratories, Inc., the Eastern District of Pennsylvania issued the latest ruling in the ongoing dispute over whether pharmaceutical sales representatives are exempt from the overtime requirements of the FLSA.
The plaintiff in Ibanez was a former sales representative for Abbott. Among other things, the plaintiff helped create “business plans which tracked doctors by market share and potential.” The plaintiff also developed “game plan[s] or strateg[ies] for individual calls with physicians.” Thus, the District Court ruled ...
By: Evan Rosen
Yesterday, the National Labor Relations Board (the “Board”) voted, 2-1, to approve its Resolution to drastically amend the rules governing union elections. While the Board’s stated reason for the amendment is to reduce unnecessary litigation, it is apparent that this purpose is a sham, and that the real reason is to make it significantly easier for unions to organize employees, especially those in the highly targeted hospitality industry.
The Board did not vote on the entire proposal detailed in their June 22, 2011Notice of Proposed Rulemaking, but rather ...
By David Garland and Douglas Weiner
In February 2011, the U.S. Court of Appeals for the Ninth Circuit gave a resounding victory to employers in the pharmaceutical industry by finding that pharmaceutical sales representatives are covered by the outside sales exemption of the Fair Labor Standards Act (“FLSA”). Christopher v. SmithKline Beecham, No. 10-15257 (9th Cir. Feb. 14, 2011). Plaintiffs, and the U.S. Department of Labor (“DOL”) in an amicus brief, had argued the exemption did not apply because sales reps are prohibited from making the final sale. Prescription ...
by William J. Milani, Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman
For the first time, in 2012, New York employers must provide all New York employees with an annual notice and acknowledgment of pay rate and pay date ("Notice") pursuant to the Wage Theft Prevention Act ("WTPA"), which amended the New York State Labor Law ("Labor Law"), effective April 9, 2011.
As we previously reported (see Act Now Advisory "Governor Paterson Signs Overhaul of New York State Labor Law" (Dec. 15, 2010), and Act Now Advisory "They're Here – New York State Department of Labor Issues ...
by William J. Milani, Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman
For the first time, in 2012, New York employers must provide all New York employees with an annual notice and acknowledgment of pay rate and pay date ("Notice") pursuant to the Wage Theft Prevention Act ("WTPA"), which amended the New York State Labor Law ("Labor Law"), effective April 9, 2011.
As we previously reported (see Act Now Advisory "Governor Paterson Signs Overhaul of New York State Labor Law" (Dec. 15, 2010), and Act Now Advisory "They're Here – New York State Department of Labor Issues ...
By: Forrest Read
The new Americans with Disabilities Act (“ADA”) standards (the “2010 Standards”), set to take effect on March 15, 2012, create new compliance obligations and contain technical specifications impacting what have become fixtures in most hotel lobbies or common areas: automatic teller machines (“ATMs”). As is customary when new standards are set to take effect and become enforceable, hotels with existing ATMs want to know whether and how their ATMs will be impacted by the 2010 Standards and whether they will be afforded any safe harbor protections for ...
On November 16, 2011, the New Jersey Appellate Division held that registered nurses are exempt from overtime compensation under the New Jersey Wage and Hour Law (“NJWHL”), N.J.S.A. 34:11-56a1 to 56a30, even if paid on an hourly basis, because they fall within the “professional” exemption. Anderson v. Phoenix Health Care, Inc., A-2607-10T2 (N.J. App. Div. Nov. 16, 2011). The Court further held that, even if registered nurses were not exempt, a claim for overtime compensation may nevertheless fail under the NJWHL’s good faith exception, N.J.S.A.
By: Casey Cosentino
There is an on-going trend by the U.S. Department of Labor (“DOL”) to leverage popular technology to increase public and consumer awareness of the laws and regulations it enforces. Indeed, the DOL is continually exploring creative ways to share information with the public using the fastest and most-wide reaching means available. Through technology, the DOL is intentionally providing employees and consumers with enforcement data about companies, particularly hotels and restaurants, so that they can make informed employment and patronage ...
By Douglas Weiner and Meg Thering
On October 20, 2011, the Computer Professionals Update Act (“the CPU Act”) – one of the first potential pieces of good news for employers this year – was introduced in the U.S. Senate. If passed, the CPU act would expand the computer employee exemption of the Fair Labor Standards Act (“FLSA”). S. 1747.
Unlike much of the other legislation affecting employers that has been proposed or passed this year, the CPU Act would make business easier for employers and decrease the risk of employee misclassification lawsuits. If the proposed ...
OSHA’s recent string of hotel inspections in response to formal safety and health complaints filed by UNITE-HERE and others on behalf of hotel housekeepers is under serious scrutiny from the House of Representatives Subcommittee that oversees OSHA’s operations. OSHA leadership is defending its decision to inspect hotels, and is signaling that OSHA will not shy away from inspecting employers in the midst of organizing campaigns and/or contentious bargaining over labor agreements.
Over the last year, OSHA received a number of formal, written ...
by Michael S. Kun, Eric A. Cook, and Jennifer A. Goldman
California Governor Jerry Brown has signed two employment-related bills into law, raising the stakes for employers doing business in California. The two laws, which increase the penalties for employers that wrongly classify employees as independent contractors or engage in "wage theft," both go into effect on January 1, 2012.
Misclassification of Workers as Independent Contractors
The first of the new laws, SB 459, directly impacts employers that classify workers as independent contractors. Referred to by critics as the ...
by Michael S. Kun, Eric A. Cook, and Jennifer A. Goldman
California Governor Jerry Brown has signed two employment-related bills into law, raising the stakes for employers doing business in California. The two laws, which increase the penalties for employers that wrongly classify employees as independent contractors or engage in "wage theft," both go into effect on January 1, 2012.
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If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
Most employers are well versed in the FMLA requirements; however, I recently received a call from one of our hospitality clients seeking guidance on administering intermittent FMLA leave. Specifically, the hotel was seeking advice on how to manage a Housekeeping Department employee who was approved for intermittent FMLA leave and had recently increased the frequency of his days off with little or no notice of the need for leave.
Notably the FMLA and supporting regulations do not provide much guidance for employers. It is clear from the regulations ...
For several years, employers’ counsel have moved to block the combining of state wage and overtime claims with federal Fair Labor Standards Act (“FLSA”) claims, arguing that Rule 23 opt-out class actions were inherently inconsistent with FLSA collective opt-in actions. For support, they cited to the decision of the Third Circuit in De Asencio vs. Tyson Foods, Inc., 342 F. 3d 301 (3rd Cir. 2003) reversing a district court’s exercise of supplemental jurisdiction because of the inordinate size of the state-law class, the different terms of proof ...
by Dean L. Silverberg, Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman
On September 21, 2011, the Internal Revenue Service ("IRS") announced a new program that will give businesses the opportunity to resolve prior worker classification issues by voluntarily reclassifying their non-employee workers (such as consultants, freelancers, and independent contractors) as employees for federal employment tax purposes. Officially called the "Voluntary Classification Settlement Program" ("VCSP"), this program is part of a larger "Fresh Start" initiative at the ...
By Michael Kun, Regina Musolino and Aaron Olsen
Since the Supreme Court’s historic ruling in Wal-Mart Stores, Inc. v. Dukes, attorneys have debated the scope and impact of the decision. Not surprisingly, plaintiffs’ counsel have argued that the decision was limited to its facts, or to discrimination cases, or to cases involving nationwide claims. And they have argued that Wal-Mart has no application whatsoever to wage-hour class actions and collective actions. In only a few words, the Supreme Court may have answered some of these questions.
Earlier this month, the United ...
By: Kara M. Maciel
On August 25, 2011, the National Labor Relations Board (“NLRB”) adopted a final rule to require all employers to post a notice of employee rights under the National Labor Relations Act (“NLRA”). The required posting provides information to employees about the right to organize a union, bargain collectively, and engage in protected concerted activity – as well as the right to refrain from such activity. Significantly, this posting requirement is required for all hospitality employers – large and small -- regardless of whether your operations are ...
by Michael Kun
Some were beginning to wonder whether it would ever happen. After more than two years, the California Supreme Court has announced a hearing date in the much-awaited Brinker v. Superior Court case -- November 8, 2011.
Unless the Court takes a detour, California employers should finally know the answer to a question that has long driven California's billion dollar wage-hour class action industry -- must an employer "ensure" that employers take meal and rest periods, or are they only required to make them "available" to employees.
Should the Supreme Court rule that ...
By Amy Traub and Christina Fletcher
Once a settlement has been reached in an FLSA collective action, the defendant-employer typically wants that settlement to go into effect and end the case as soon as possible, so that the company can get past the myriad of distractions brought by the suit. However, as litigants increasingly are finding, the parties’ agreement to settle an FLSA collective action is nowhere near the end of the road, or the end of the case. There is a “judicial prohibition” against the unsupervised waiver or settlement of claims brought under the ...
by Susan Gross Sholinsky , Dean L. Silverberg, Steven M. Swirsky, and Jennifer A. Goldman
New York City employers take note: under the New York City Human Rights Law (“NYCHRL”), it is now considerably more difficult for employers to establish “undue hardship” in the context of denying an employee’s request for a reasonable accommodation due to his or her religious observance or practice. While previously silent on the issue, the NYCHRL now includes a definition of the term “undue hardship,” as follows: “an accommodation requiring significant expense or ...
By: Kara M. Maciel and Mark M. Trapp
On August 23, 2011 the Washington D.C. area experienced a 5.9 magnitude earthquake. A week later, a “labor law earthquake” of far greater magnitude had its epicenter in a federal agency in D.C. In the coming weeks and months, its aftershocks will be felt by unprepared employers, particularly those operating hotels, restaurants, spas and clubs in the hospitality industry.
In an opinion that America’s largest private sector labor union called a“monumental victor[y] … for unions,” the National Labor Relations Board ...
Many of our hospitality clients are revisiting immigration requirements to see if there are any advantages that they have overlooked. One overlooked advantage is the USCIS’s E-Verify system. Employers know that the IRCA requires them to satisfy the Form I-9 requirements. Many have found this difficult to implement and have been the targets of worksite enforcement operations by U.S. Immigration and Customs Enforcement (“ICE”) that are costly to defend and often result in significant fines. Traditionally, many hospitality employers have looked at ...
As Hurricane Irene is moving up the East Coast and threatening states from North Carolina, Virginia, Maryland, New Jersey, New York and Massachusetts, employers should refresh themselves on the wage and hour issues arising from the possibility of missed work days in the wake of the storm.
A few brief points that all employers should be mindful of under the FLSA:
- A non-exempt employee generally does not have to be paid for weather-related absences. An employer may allow (or require) non-exempt employees to use vacation or personal leave days for such absences. But, if ...
Congratulations to our fellow EBG bloggers: LexisNexis has selected Epstein Becker Green's Wage & Hour Defense Blog as a nominee for its Top 25 Labor and Employment Law Blogs. LexisNexis annually honors a select group of blogs that set the online standard for a given industry. This year, LexisNexis expanded Top Blogs to the Labor and Employment Law Community.
To narrow down to its final list of 25 honorees, LexisNexis is seeking feedback and input from the online community. If you find Epstein Becker Green's Wage & Hour Defense Blog useful and informative, we would appreciate your ...
As you may know, the authors of this blog are attorneys at Epstein Becker Green, a national law firm with approximately 300 lawyers practicing in ten offices throughout the U.S.
On July 19, 2011, Epstein Becker Green’s Jay P. Krupin testified before the National Labor Relations Board (NLRB) concerning the Board’s dramatic rulemaking proposals to modify the representation election process. The firm was one of only a handful of management-side firms invited to provide testimony on behalf of clients at this first-ever NLRB hearing.
Vigorously arguing against the proposed ...
By Michael Kun
Understandably, employers have celebrated the U.S. Supreme Court decisions in Wal-Mart Stores, Inc. v. Dukes and AT&T Mobility v. Concepcion. At the very least, those cases would seem to suggest that the wage-hour class actions and collective actions that have besieged employers might be curtailed significantly, along with the costly settlements triggered by the in terrorem effect of such lawsuits.
California employers can stop celebrating, or at least tone down those celebrations.
Unlike other states, California law provides for a mechanism by which employees ...
By Michael Kun and Betsy Johnson
In a much-anticipated decision, the California Supreme Court has expanded the scope of California’s complex wage-hour laws to non-resident employees who perform work in California. While the decision leaves more than a few questions unanswered, it will require a great many employers to review their overtime and other payroll practices. Perhaps just as importantly, it will likely open the door to lawsuits, including class actions, regarding prior overtime and payroll practices. This issue is of particular importance to hospitality ...
By: Kara M. Maciel and Casey Cosentino
The U.S. Equal Employment Opportunity Commission (EEOC) continues its aggressive quest to challenge “inflexible” medical leave policies, as Denny’s Inc. agreed earlier this month to pay $1.3 million to settle a nationwide class action lawsuit. Denny’s also entered into an injunction barring its restaurants from future violations of the Americans with Disabilities Act (ADA), including denying disabled employees reasonable medical leave and retaliating against employees for bringing disability discrimination claims.
The ...
By: Kara M. Maciel
The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:
· ...
By: Kara M. Maciel
The Department of Labor’s Wage and Hour Division in Norfolk, Virginia has announced that it will be stepping up its compliance audits and enforcement efforts against area hotels. In the past few years, the DOL stated it found violations at about 60% of local hotels. According to the DOL, the agency recently made spot checks at 10 area hotels since April. This is just one part of the agency’s nationwide enforcement program and its “Plan/Prevent/Protect” initiative against the hospitality industry. Common violations assessed by the DOL include:
· ...
By: Kara Maciel and Adam Solander
Over a year after thePatient Protection and Affordable Care Act (“PPACA”) was signed into law, the Internal Revenue Service (“IRS”) recently released much anticipated information on issues related to the calculations of full-time and full-time equivalent employees for determining when an employer may be subject to a penalty under PPACA. In Notice 2011-36 (“Notice”), the IRS is specifically seeking employer’s comments on several of the issues by June 17, 2011. For hospitality employers, who traditionally employ a large ...
By: Kara M. Maciel and Jordan Schwartz
On May 10, 2011, the Southern District of New York conditionally certified a collective action against eight New York metropolitan area restaurants owned by celebrity chef Mario Batali alleging violations of the Fair Labor Standards Act. In the action, restaurant servers argue that the Batali restaurants are paying employees less than minimum wage and unlawfully retaining a portion of their tips.
The primary allegation in the lawsuit is that the restaurants deduct from the employee tip pool a portion of all credit-card tips equal to ...
By: Douglas Weiner
In a recently reported case from the Eighth Circuit Court of Appeals, Applebee’s servers and bartenders alleged they spent a “substantial” amount of time performing non-tipped work, such as cleaning and maintenance, and, therefore, should be paid the minimum wage of $7.25 for the time spent performing non-tipped work, rather than the direct wage of $2.13 the FLSA allows employers to pay employees in tipped occupations See 29 U.S.C. § 203(m) and 29 U.S.C. § 203(t).
Applebee’s argued it properly applied a tip credit to the servers and bartenders’ ...
By: Jay P. Krupin, Kara M. Maciel, Eric J. Conn
As we reported in our blog post in November of 2010, hotel housekeepers across the nation launched a concerted program of filing complaints with the Occupational Safety and Health Administration (OSHA) alleging a range of ergonomic and chemical exposure injuries sustained on the job. Government regulators and legislators are now taking action in response to these complaints. We have attached a series of articles discussing the nature of the complaints and the government’s response to them.
Specifically, the OSHA complaints ...
By: Michael Kun
Employers who do business in California are already well aware of the wage-hour class actions that have besieged employers in virtually every industry. Class claims for misclassification of employees as exempt employees or independent contractors first began to be filed more than a decade ago, and continue to be filed on a daily basis. Claims for alleged work off-the-clock and missed meal and rest periods by non-exempt employees generally began later, but continue to be filed at an alarming rate.
Now we can add to those cases a new wave of California class actions ...
The U.S. Supreme Court’s decision in Kasten v. Saint-Gobain Performance Plastics Corp., __ U.S. __ (March 22, 2011), holds that an employee’s oral complaint of a violation of the Fair Labor Standards Act (“FLSA”) constitutes protected conduct under the FLSA’s anti-retaliation provision.
EBG partner Frank C. Morris, Jr., discusses in an EBG Act Now Advisory the fact that the Kasten decision is merely the latest in an ever-growing series of cases where the Supreme Court has broadly interpreted protections against retaliation and for whistleblowers. The EBG Act Now ...
By: Kara M. Maciel
A Maryland federal court recently ruled in Gionfriddo v. Jason Zink LLC that the owner and operator of two taverns could not qualify as a “tipped employee” under the Fair Labor Standards Act (“FLSA”) and the Maryland Wage and Hour Law despite that he also worked as a bartender at his establishments. Thus, while he contributed tips to the tip pool arrangement when he worked as a bartender, he could not also share in the distribution of the tips. The court stated that allowing an owner to participate in a tip pool would broaden the FLSA’s tip credit provisions to a ...
On February 15, 2011, the United States District Court for the Western District of New York denied a motion to dismiss a complaint by foreign H-2B workers that alleged that their employer violated the minimum wage provisiosn of the Fair Labor Standards Act (FLSA) by refusing to reimburse the workers' transportation, visa and recruitment expenses. See Teoba v. Turgreen Landcare LLC, No. 10-6132 (W.D.N.Y. Feb. 15, 2011). In Teoba, the plaintiffs seek to represent a class of H-2B workers who were recruited over a three-year period by Trugreen, a landscape ...
By: Kara M. Maciel and Evan Rosen
In recent weeks the Obama Administration’s National Labor Relations Board (the “Board”) has been very active in soliciting public comments and amicus briefs on a wide range of decisions and proposed regulations that could drastically change the labor relations landscape. One of these topics are the rules surrounding the scope of union solicitation on a non-unionized employer’s private property.
We have received many inquiries from our clients about the Board's review of whether to change the solicitation rules. In light of the ...
In a recent article “Food Safety and Whistleblowing – New Federal Law May Deliver a Full Basket of Claims,” EBG partners Allen Roberts and John Houston Pope discuss the FDA Food Safety Modernization Act (“FSMA”), which was signed into law on January 4, 2011.
This new federal law could have a significant impact on restaurateurs, clubs, and other hospitality employers who manufacture, distribute, transport, receive, hold or import food. FSMA opens wide a new door to whistleblower activity and protection, necessitating employer attention to related compliance ...
By: Kara M. Maciel
The United States District Court for the Northern District of California has denied certification of a class action against Joe's Crab Shack restaurants on claims that employees worked off-the-clock, were denied meal and rest breaks, and were required to purchase t-shirts to wear at work. Because the case was handled by our EpsteinBeckerGreen colleagues Michael Kun and Aaron Olsen, we do not believe it is appropriate to comment on the decision or its implications. If you would like to read the decision, a copy may be found here.
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If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
By: Amy Traub
Following up on our previous blog posting from November 2, 2010, on December 16, 2010, the New York State Department of Labor issued a new minimum wage order (the “Order”) which will bring immediate changes to the restaurant and hotel industries. Under the Order, employees will be due a higher minimum wage and subject to new tip pooling rules. Meanwhile, employers will need to comply with more stringent recordkeeping requirements. Although employers have until February 28, 2011, to adjust their payrolls, they will still owe their employees back pay as of ...
By: Kara M. Maciel and Forrest G. Read, IV
The U.S. Court of Appeals for the Eleventh Circuit’s recent decision in Diaz v. Jaguar Rest. Group, LLC underscores the importance for hospitality employers to know which job duties their employees are performing in order to assert every potentially applicable affirmative defense when answering an employee’s FLSA lawsuit for non-payment of overtime. In Diaz, the Eleventh Circuit reversed the trial court’s decision that a restaurant, which failed to raise the administrative exemption to the overtime requirement at any point ...
By: Michael Casey, Peter Panken, and Steven Swirsky
The new Obama National Labor Relations Board (“NLRB” or the “Board”) has signaled that it will likely be granting union organizers the right to enter employers’ premises to conduct union organizing activity. This would reverse a trend in the last few years of preserving an employer's property rights, and of confining union organizers to areas outside of an employer's private premises, including those areas open to the public, in hotels, restaurants, clubs and other hospitality venues where non-employees ...
by Michael Kun and Doug Weiner
It is no secret that employers have been beseiged by wage-hour litigation, including wage-hour class actions and collective actions. These lawsuits have hit the hospitality industry as hard as any other industry, perhaps harder.
It is also no secret that the persons who benefit most from these actions are often plaintiffs' counsel, who frequently receive one-third or more of any recovery.
Now, as a result of an unprecedented new program initiated by the the Department of Labor's Wage and Hour Division ("WHD"), the WHD will be practically delivering ...
Please join me, Jay P. Krupin, Michael S. Kun and other attorneys from our firm, Epstein Becker Green, as we present a full-day program covering labor and employment law topics that have increasingly impacted hospitality employers over the past two years. In addition, we will offer an outlook of what we should expect in the coming two years.
Our keynote speaker is Darrel Thompson, Senior Advisor to Senate Majority Harry Reid, who will offer comments concerning the agenda of the 112th Congress. We are particularly pleased that Norah O'Donnell, MSNBC Chief Washington Correspondent, is ...
On December 6, 2010, the U.S. Attorney's Office in San Francisco announced that the owners of the El Balazo restaurant chain in the Bay Area had been charged in a 20-count criminal Information with tax fraud and harboring illegal aliens. These charges arise out of a raid made by federal agents in May 2008 that resulted in the arrest of 64 illegal aliens at several of these restaurants. The Information charges the owners with conspiracy to commit tax evasion, tax evasion, harboring illegal aliens for financial gain, and submitting false Social Security ...
Missouri Man Convicted in Scheme to Place Undocumented Workers in Hotels
On October 28, 2010, a Missouri man was convicted by the U.S. District Court in Missouri for his role in a racketeering scheme that involved placing undocumented workers at hotels in 14 states, including several hotels in the Kansas City, Missouri, area. United States v. Dougherty, No. 4:09-CR-00143 (W.D. Mo. Oct. 10, 2010). Beth Phillips, the U.S. Attorney for the Western District of Missouri, indicated that “Mr. Kristin Dougherty was found guilty of racketeering, participating ...
Recent Updates
- U.S. Court of Appeals Decision Highlights Retaliation Risks During Employee Separations
- Fast Facts About the DOL Proposed Rule for Electronic Disclosures for ERISA Group Health Plans
- San Francisco Amends its Fair Chance Ordinance
- New Massachusetts Employer Notice Obligation
- Watch: Change Is Coming from the EEOC—but When? - Employment Law This Week