Author: Lindsay Massillon

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Understanding the Tip Credit – Part 2 of 3

The Tip Credit is a popular method of payment used by restaurants, bars, and other businesses. However, a surprisingly large percentage of business owners do not fully understand how to properly apply the Tip Credit in terms of overtime, minimum wage and participation. In this three part series, we will break down each of these components for the proper use of the Tip Credit.

Today we address minimum wage.  In short, any employee in Florida receiving wages subject to the Tip Credit must be paid no less than $5.08 per hour directly from the employer. This rule applies no matter how much the employee receives in tips.

Let’s look at two scenarios:

Scenario A – The employer pays $200 for a 40 hour work week and the employee additionally averages $750/week in tips.

Scenario B – The employer pays $300 for a 40 hour work week and the employee additionally averages $200/week in tips.

In both scenarios, the employee earns well in excess of the Florida minimum wage. Also, the employee in Scenario A earns far more than in Scenario B. However, the employer in Scenario A fails to meet the minimum wage threshold.

The critical issue is that the employer’s contribution must be equivalent to the minimum wage times the number of hours worked. The amount of tips earned by the employee doesn’t matter so long as the employee’s total pay exceeds minimum wage (in Florida, that would be $324/week at the present minimum wage rate of $8.10/hour for a 40 hour week).  Thus, Scenario A fails because the employer is paying only $5.00/hour and not the required $5.08/hour.

Did You Know? Employee Handbooks

Employee handbooks: love ’em or hate ’em, they are a powerful tool for employers and employees alike. Handbooks benefit employees by letting them know at the outset how they are expected to conduct themselves, how they may be rewarded for good work, how to properly request leave, and so on. Handbooks benefit employers by setting forth policies up front; so, in the event an employee runs afoul of the rules, the employee can’t claim ignorance. One huge pitfall with employers, however, is that either their policies are sorely out of date; or, even worse, they don’t have one at all.

At Law Offices of Charles Eiss, P.L., we implore our corporate clients to maintain and use an employee handbook. More than that, we make sure that the policies contained therein are up to date with the current laws and include policies covering new employment issues; such as social network harassment, internet use at work, and BYOD** policies.

I’ve always said that small business owners don’t want to be employers per se. Rather, the boutique owner with a shop in Coral Springs wants to sell her handmade jewelry; and the Greek restaurant owners in Pembroke Pines want to share their family recipes with the neighborhood. However, as these businesses grow, each owner may find that in order to continue meeting the needs of their customers, they must hire employees. With that decision comes a whole slew of new laws to learn and navigate to avoid lawsuits and disgruntled employees. An employee handbook, even in its most simple form, is a valuable tool all employers need to have in their arsenal.

If you are a small business owner in South Florida who wishes to protect your business from litigation, please give us a call.

** Don’t know what this is? Your employee handbook may be out of date!

A “Bump” In the Road: Pregnancy and Accommodations at Work

While many women have easy-going, uneventful pregnancies, many others develop medical issues while their body changes during pregnancy. These issues can be as common and harmless as frequent bathroom use to more serious, like preeclampsia. While such issues can be hard enough to deal with in the comforts of home, such inconveniences can be far more intrusive if you are dealing with them at work. Pregnancy discrimination is a growing concern for many women in the U.S. as was made clear when the EEOC issued their revised Enforcement Guidance for Pregnancy Discrimination and Related Issues on June 25, 2015. The EEOC issued this on the heels of the Supreme Court’s decision in Young v. UPS, which held that a company cannot treat pregnant employees any different than it does other temporarily disabled employees.

To be clear, pregnancy on its own will likely not qualify a woman for an accommodation, but any impairments associated therewith can be considered. For example, if your doctor advises you that you can no longer lift more than 15lbs at work, you should seek an accommodation. Such an accommodation would likely be offered to other employees who, for example, had lifting restrictions due to an injury on the job. For this reason, an employer must do for pregnant women what it would do for other workers who have restrictions due to issues other than pregnancy.

Using this as a guide, women should not be afraid to discuss accommodations with their employer. Communication is key. Once a pregnant woman discusses any issues she may be having with her pregnancy with her employer, the employer and employee should work together to find out what is a fair compromise. For example, if the pregnant woman finds that her work performance would increase if she were closer to the bathroom during her pregnancy, perhaps the employer could move her desk closer to the bathroom on a temporary basis. According to the ADA Amendments Act of 2008 (“ADAAA”), an employer is obligated to provide a “reasonable” accommodation to employees who qualify under the Act.  As one can guess, the interpretation of what is “reasonable” is usually a point of contention.

The essential take-away from recent trends is that employers and employees should work together on what work modifications would help the employee maintain productivity and not intrude on the business goals of the employer. If the two sides can strike a balance, pregnant employees and their employers will benefit greatly.

For additional information, check out the National Women’s Law Center.

Florida employees/employers: if you have questions about the above, contact our offices for a free consultation.

Outside of Florida: seek a qualified employment attorney in your area.

Disclaimer: This post should not be construed as legal advice. If you believe you have a legal issue, seek a qualified attorney in your state. Nothing contained herein is meant to create an attorney-client relationship, and any posts, comments, or responses are not confidential and are not legal advice.

Proposed Changes to FLSA Exemptions…Are You Ready?

In July 2015, the Department of Labor (“DOL”) proposed significant changes to the Executive, Administrative, Professional (“EAP”) or “white-collar” exemption under the Fair Labor Standards Act (“FLSA”). The FLSA makes it illegal for an employer to pay under the minimum wage and forces employers to pay overtime to those employees who are (properly) classified as “non-exempt.” The modifications, if they are approved, will increase the salary threshold for those white-collar workers who may now be exempt from overtime laws.

….So, what does this mean for employers??

First, it is important for employers to understand the changes proposed, should they go into effect. Here is an example of how the new rules may affect you, a business owner: Company, Inc. (which is an “employer” within the guidelines of the FLSA) employs an office manager named Robert. Under the current rules, such a position may be exempt under the Administrative exemption (you can read more about that here). In order to be exempt, Robert would have to earn at least $455/week, perform primarily non-manual labor which is directly related to the operations of the employer, and have independent discretion with regard to significant matters. Well, let’s say that Company, Inc. has an employment law attorney on retainer and knows that Robert is properly exempt from overtime. So, Robert works about 60 hours a week and gets paid $500/week, regardless of the hours he works.

If the proposed changes are made, the required salary Robert would have to make could be as high as $970/week. This is a massive increase to Robert’s pay. This is also a massive increase to Company, Inc.’s payroll expenditures. So, if Company, Inc. wishes to avoid paying Robert overtime, they will need to increase his salary from $26,000/year to $50,440.

It is important for employers to understand the “why” as well: the DOL pointed out that the current threshold of $455/week is actually below the poverty line for a family of four. What’s more, the last time any modifications to this part of the FLSA were made was more than 10 years ago, in 2004. Since then, there have been several increases to the minimum wage, yet no changes to this salary threshold. So, it makes sense.

However, if you are a business owner who has questions about whether or not you have to change the classification of some of your employees, need to change the the way some of your employees are paid, or may have to start using a time-keeping system given this new proposed rule, please contact a knowledgeable and qualified employment law attorney within your state.

Holiday Work – Know Your Rights

The familiar signs of December are all around; from the red cups at my favorite coffee shop, to the holiday lights and flags decorating the streets. Generally, the holidays mean parties, family, friends. However, to those who work in retail, the holidays mean extended mall hours, crazed shoppers, over-crowded parking lots, and more time spent fixing shelves and folding clothes.

Given all the extras that come with holidays, retail employees must make sure they are aware of the time they spent working during these coming weeks especially. Federal law mandates that all hours worked over 40 per work-week must be compensated at no less than time and one-half the employee’s regular rate for all non-exempt employees. All those late nights spent recovering the store likely counts towards your weekly hours. Also, if your supervisor asks you to cover or pick up another shift, just make sure that your pay stub reflects all that time. I have seen instances where Employee A covers a shift for Employee B, but Employee A does not get paid because the schedule sheet showed that Employee B worked that day. Don’t always count on your payroll specialist to get your pay right all the time. It is a good practice to mark down your hours worked every day and add them up at the end of the pay period to make sure that you are paid for all hours worked. If you have questions about when your pay period starts, or what days it covers, ask your manager. I know from experience working in the retail industry (especially during the holidays and directly after) can be a fast-paced and hectic environment, but the money you make is important!

The advent of the holidays also means it is high-time for seasonal workers. If you fit that bill, make sure that you understand the difference between an independent contractor and an employee. A lot of employers like to higher temporary or seasonal workers and may end up misclassifying those workers as independent contractors when they are really employees. Generally, an independent contractor will receive a pay check with no taxes deducted. If you receive such a pay check, make sure you fit the bill of an independent contractor.

If you have questions about any of these topics, ask an employment attorney in your state.

Did you know? Five Tips for Dealing with Human Resources

I often encounter clients who firmly believe that an employer’s human resources (HR) department is a safe haven for employees. While it is true that if you have a problem at work, your first stop should be to your HR rep, employees should remember that, at the end of the day, HR reps are paid by the employer to protect the interests of the business. Here are some tips that all employees should remember when dealing with an HR department.

Tip No. 1: Keep copies of emails, forms, whatever!

This is really important. If you complain to HR and they have you complete a form (whether you have to sign or not), ask for a copy. You can also take out your phone and take a picture of the form if you can’t get a copy. When you send emails to HR reps, send a copy to your own personal email address (check your company’s email policies first!) or print out the email and save if in a folder.

Why should you do this? Because as time passes, people forget things. The great thing about email is that it has names, dates, and the content of what topics were discussed. Also, if something like a termination or suspension occurs, you may not have access to your company email account without notice and you won’t be able to retrieve those important emails. Often times, once an employee is fired, the company will delete or archive those emails; some never to be seen again. If you save your own copies, you won’t have to worry about this!

Tip No. 2: Take Notes

If you speak to HR, jot down a few notes about the discussion right after the meeting/conversation, while everything is still fresh in your mind. Make sure to include the date and the names of those to whom you spoke. HR may ask to follow up at a later date; make sure to include that in your notes as well. If HR does not fix the problem and you have to seek further action, you will want an account of what you spoke about, when, and to whom. No matter how great you think your memory is, notes are always a good idea. The more detailed; the better.

Tip No. 3: Read the Policies before you Sign

With most companies, the first few weeks of employment involve orientation which means reading through (and likely signing) a lot of policies. I know you may be excited to start your new job, but take the time to read through the policies; especially when you are being asked to sign off that you did so.  A lot of employers have handbooks which come complete with a form saying that you received, reviewed, and understood the contents of the handbook. This is more than just a formality; you will actually be held to that statement and if you violate a policy, your signature will rear its ugly head and remind you that you agreed that you read and understood the rules of your new position. Don’t treat this lightly!

Already signed off on policies you didn’t read? Go read them now! Make sure you understand what it is that is expected of you. Can’t find your handbook? Ask for another one or see if it is available online or through your employer’s intranet.

Tip No. 4: Ask Questions

This goes along with Tip 3. If you read your company’s policy on, say, requesting leave and you don’t understand the process…ask HR (this would also be a good time to keep some notes regarding your conversation, see Tip 2). If you don’t ask, and you do the wrong thing, your leave may be denied. Believe me, you’ll want to understand how things work before you need to use them so that you are confident in what you need to do. Who knows? If you don’t follow policies with regard to taking leave, your leave may be denied, causing you problems when you least expect/need.

Tip No. 5: Complain…if you need to.

Many times, clients tell me that they knew something was wrong but never complained to HR for fear of losing their job, or rocking the boat. Generally, it is better to lodge a complaint internally with your HR department at the time you notice something is not right. Often, if an employee has to head to litigation, they will be asked by the attorney for the employer whether they ever complained about X. If the answer is “no,” it may seem to them that it wasn’t important enough to complain about–or worse–that it never happened. Of course, keep notes of your complaint and/or emails (email is best!).  Know the rules your company may have with regard to complaining about discrimination, harassment, violations of law, etc.

 

Disclaimer: Nothing contained in this post is meant to be construed as legal advice. If you require legal advice, contact a qualified attorney in your state. Nothing contained herein is meant to create the attorney-client relationship, and any comments, posts, or replies are not confidential and are not legal advice.

Did you Know? Florida’s Minimum Wage to Increase in 2015

Hopefully the first post in a new series, “Did you Know?” which will serve to inform employers and employees about new (or maybe just lesser known) facts about work.

For all our friends in the Sunshine State, the minimum wage will be raised to $8.05 beginning January 1, 2015 and the minimum wage for tipped employees will rise to $5.03. This increase is due to the Florida Minimum Wage Act which authorizes the DEO (Department of Economic Opportunity) to annually adjust the minimum wage based on a variety of factors.

Employers: make sure you visit the DEO and get the latest minimum wage posters which must be displayed for your employees.

Employees: make sure that your new hourly rate is equal to or above $8.05, or $5.03 if you are a tipped employee, beginning January 1, 2015.

If you are in Florida and need assistance or advice regarding minimum wage and/or overtime, contact us!

Disclaimer: Nothing contained in this post is meant to be construed as legal advice. If you require legal advice, contact a qualified attorney in your state. Nothing contained herein is meant to create the attorney-client relationship, and any comments, posts, or replies are not confidential and are not legal advice.

 

SCOTUS October Term: An Overview of Employment-Related Cases before the Supreme Court

The October Term for the Supreme Court of the United States (SCOTUS) is underway. This term, the Justices have been petitioned to review cases involving interpretations of the McDonnell Douglas framework, the Pregnancy Discrimination Act, 42 U.S.C. section 2000e(k), religious accommodations, and the EEOC’s policies and procedures.

To set the stage for this overview, we must first understand how SCOTUS determines what cases it will hear, and which cases it will not. SCOTUS has original and appellate jurisdiction; and most of the cases it hears are those brought up on appeal. A party to litigation may petition the Court to hear a case through a writ of certiorari. Such writs are filed after the case has been heard by either (1) the highest court within a state, i.e., the Florida Supreme Court (if that court decided a case which involved a Constitutional issue); or (2) from a Federal Court of Appeals, i.e., the 11th Circuit. You can learn more about the procedures of the Court here.

So, how does the panel of nine justices determine 100-150 cases it will hear arguments on out of the 7,000+ writs filed with it? Since this is the highest court in the United States, it may be no surprise that one of the largest considerations of the Court is whether the case has importance or significance. Let’s take a look back at last term. The Court decided Burwell v. Hobby Lobby which held that a privately-held corporation can have religious beliefs and; therefore, can decide not to offer coverage for contraception to its employees based on those beliefs. Contraception, religion, the Affordable Care Act, and corporate governance all were–and are–current issues, so it made sense for SCOTUS to chime in. In addition to whether an issue is of importance, the Justices are also more likely to decide a case which involves conflict between circuits. There are eleven circuits in the U.S. You can see a map here. There are plenty of times where one circuit court interprets a law one way, while another circuit with an entirely different set of constituents interprets the very same law an entirely different way. Like siblings fighting, sometimes the parent (SCOTUS) needs to get involved and have the final say.

Now that we have a general idea of what piques the Justices’ interest, here let’s dive in to the employment law cases SCOTUS will be deciding this term.

Young v. UPS, Inc.

Peggy Young (Petitioner) worked at UPS as an air driver, driving packages marked “Air” to the airport. Generally, these packages were small letters or things that were not heavy since the cost-per-pound for air delivery is higher than ground delivery. In 2006, Young became pregnant and brought in a note from her midwife requesting that Young be restricted to lifting no more than twenty pounds. Given this restriction, Young asked to either continue her regular job or be assigned to light duty. UPS told Young that it offered light duty, but only for those people who either (a) had on-the-job injuries, (b) needed an accommodation under the American’s with Disabilities Act, or (c) had lost their Department of Transportation certification. Since Young did not fit into any of these three categories, UPS did not accommodate her and required her to take an unpaid leave of absence; during which she lost medical coverage. Under the PDA, an employer must treat pregnant employees “the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.” 42 U.S.C. section 2000e(k). The question before the Court is whether UPS treated Young in the same manner as those employees who had similar restrictions and were not pregnant. As Young argues, she was not treated the same as non-pregnant employees with the same or similar restrictions because she was refused light duty. UPS argues, on the other hand, that their policy was “pregnancy-blind” and therefore cannot be construed as discriminatory. The district court sided with UPS, and the Fourth Circuit Court of Appeals affirmed.  Arguments on this case are scheduled for December 3, 2014 and can be heard here.

EEOC v. Abercrombie & Fitch

Samantha Elauf, a Muslim, applied for a position with Abercrombie & Fitch Kids. Elauf came to her interview with A&F wearing a hijab (headscarf). The fact that she was wearing a hijab was not raised by Elauf or the interviewer. However, the interviewer assumed that Elauf wore the headscarf for religious reasons. Elauf was ultimately not hired because the District Manager determined that the wearing of the hijab violated A&F’s “Look Policy,” despite the fact that Elauf scored well on all other aspects of the interview. The district court granted summary judgment to the EEOC. In their ruling, the district court noted that the EEOC fulfilled their burden under the McDonnell-Douglas burden-shifting framework (infra) and that A&F failed to rebut the elements of the EEOC’s case. The court acknowledged that there was an issue of whether a person, when claiming religious discrimination, needs to explicitly state that s/he requires an accommodation (in this case, for religious purposes). The district court rejected that notion, and thus held that no explicit notice of an accommodation is required. The Tenth Circuit Court of Appeals, however, disagreed and reversed the district court’s ruling; stating that A&F had not received sufficient notice of the need for a religious accommodation. The question presented to the Supreme Court is whether an employer can be liable under Title VII for refusing to hire an employee based on a religious observance and practice only if the employer has actual knowledge that a religious accommodation was required and the employer’s actual knowledge resulted from direct, explicit notice from the applicant/employee. Arguments are not yet set on this case, but you can check here for updates.

Mach Mining v. EEOC

In this case, SCOTUS must determine whether the EEOC is allowed to bring a lawsuit against an employer without first attempting to resolve the issue(s) through conciliation (mediation). As a background, allegations of discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. section 2000e, et seq., must be brought before the EEOC before a complainant can file a lawsuit in an appropriate court. The EEOC is then required to review the charge, investigate, and attempt to conciliate or mediate the issues contained therein. 42 U.S.C. section 2000e-5(b). In this case, the EEOC presented the employer, Mach Mining, with a verbal conciliation demand, but later decided that the conciliation process had failed and that further conciliation efforts would be futile. The EEOC then filed a lawsuit on behalf of the charging party. Mach Mining raised an affirmative defense of failure to conciliate. The EEOC then moved the district court to grant summary judgment on that affirmative defense; which the district court denied, saying that all circuits agree that the requirement of conciliation is subject to some judicial review (meaning that the conciliation efforts of the EEOC can be evaluated by the courts). The Seventh Circuit Court of Appeals ruled, however, that the EEOC’s conciliation process is not subject to review by the courts; a decision which deviates from the holdings of all the other circuits. As it stands now, the Second, Fifth, and Eleventh Circuits all agree that the conciliation process is subject to a three-part inquiry; the Fourth, Sixth, and Tenth Circuits agree that the EEOC’s conciliation efforts must meet a minimum level of good faith; and the Seventh Circuit stands alone. This huge split between the circuits begs for SCOTUS intervention. Arguments have not been set on this matter, but you can check here for updates.

So, what does this mean for you, employers and employees alike? It means that the land of employment law is ever-changing and the issues related to employment matters are significant. Because of this, employers must keep up on the rulings of courts in their jurisdiction, as well as the Supreme Court, to make sure that they are abiding by the current interpretations of the laws and protecting themselves against litigation. Employees should also keep up on the employment laws so that they can seek out a qualified attorney in their state if they feel their employer has acted illegally. As with most things, knowledge is power.

Note: The Supreme Court may also hear arguments on Kalamazoo Cnty. Rd. Comm’n v. Deleon, a case which asks whether an employee’s request for a transfer can be considered an adverse employment action if the new position is less desirable than the previous position. Petition for writ of certiorari is currently pending.

Disclaimer: This post should not be construed as legal advice. If you believe you have a legal issue, seek a qualified attorney in your state. Nothing contained herein is meant to create an attorney-client relationship, and any posts, comments, or responses are not confidential and are not legal advice.