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Archive for the ‘Wage & Hour’ Category

DOL’s Regulation of Tip-Pooling May Change

Posted on: August 10th, 2017

By: Michael M. Hill

tipjarWe previously have written about the “tip credit” provision under the Fair Labor Standards Act and the developing circuit split regarding whether an employee’s tips belong to the employee or the employer. Since 2011, the U.S. Department of Labor (“DOL”) has taken the view that an employee’s tips are the employee’s property, whether or not the employer takes advantage of the tip credit or pays the full federal minimum wage in direct wages.

The DOL’s position on employee tips may soon change. The DOL has announced it soon will issue a Notice of Proposed Rulemaking that will propose to rescind the 2011 restrictions at least in part. Moreover, the DOL reportedly has instructed its investigators nationwide not to enforce this regulation with regard to employers’ tip-pooling policies.

We will keep monitoring this issue and provide an update when the Notice of Proposed Rulemaking is issued. For now, however, employers should be aware that the 2011 regulation regarding tip-pooling still is on the books. Thus, even though DOL investigators may not be enforcing it, individual employees still may bring claims based on this regulation. As always, employers should make sure their policies regarding tips comply with the interpretation of federal law in their circuit, as well as with the applicable compensation laws of their state.

If you have any questions or would like more information, please contact Michael M. Hill at [email protected].

2017 Florida Legislative Scorecard for Labor and Employment Laws

Posted on: August 9th, 2017

By: Melissa A. Santalone




In its 2017 legislative session, both houses of the Florida Legislature introduced bills on a wide array of topics that, were they to become law, would affect the interests of Florida employers in numerous ways.  Over all, most employment-related bills failed, but their mere introduction should place employers on notice of changes on the horizon.  Here are the key bills that were introduced, grouped by those that passed and failed:


  • Contractors on State-Funded Projects:  Both houses introduced bills prohibiting the State, counties, and cities from mandating contractors on State-funded public works projects to provide certain benefits to their employees or pay certain wages. The House version was passed and the law went into effect July 1, 2017.
  • Medical Marijuana:  This law codified Amendment 2, which Florida voters overwhelmingly voted in favor of in the 2016 election, that legalized medical marijuana by Constitutional Amendment.  We discussed the Amendment in detail here, and the law reflects the contents of the Amendment.


  • Raising the Minimum Wage:  The Senate introduced a bill that would have slowly raised the Florida minimum wage, currently $8.10 per hour, by $1.00-1.50 per year through 2021.  The bill died in Committee.
  • Wage Discrimination: Both houses introduced bills that would have broadened protections against wage discrimination on the basis of sex or gender identity and made it easier for women to sue over being paid less than male colleagues for the same work.  Both bills died in Committee or Subcommittee.
  • LGBT Anti-Discrimination: The House introduced a bill that would have amended the Florida Civil Rights Act to prohibit discrimination based on sexual orientation and gender identity in employment, and would have made it impermissible to discriminate on these bases in other contexts such as housing.  The bill died in the Careers and Competition Subcommittee.
  • Verification of Employment Liability:  The House introduced a bill that would have required employers to use the E-Verify system to verify the legal employment eligibility of new hires and prohibited an employer from knowingly or intentionally employing unauthorized aliens, imposing fines and suspensions and losses of license to do business in Florida for violations.  The bill died in Subcommittee.
  • Gun Liability:  Both houses introduced bills that would have created a cause of action against businesses and other organizations that prohibited those with concealed-carry gun permits from bringing firearms onto their premises if the permit-holder could demonstrate he or she was injured by a person or animal on the premises and the injury could have been prevented had the permit-holder not been disarmed.  Both bills died in Committee or Subcommittee.
  • Public-Sector Unions:  Both houses introduced bills that would have automatically decertified public-sector labor unions, except those for police, firefighters, and corrections officers, if they failed to collect dues from at least 50% of the workers they represented.  Both bills died in Committee or Subcommittee.
  • Workers’ Compensation Attorney’s Fees:  Both houses introduced bills that would have capped attorney’s fees for injured workers at $150 per hour (House bill) or $250 per hour (Senate bill).  Each bill passed its respective house, but died as the houses tried to reach a compromise on the rate.

Florida employers should keep an eye out next year for many similar issues in the failed bills to be taken up again by the Legislature.  Contact Melissa A. Santalone at [email protected] if you have any questions about the current status of any Florida labor and employment law.

Don’t Retaliate Over Spilled Milk

Posted on: August 8th, 2017

By: Timothy J. Holdsworth

blogThe Ninth Circuit Court of Appeals recently held that an employer’s attorney can be held liable under the retaliation provisions of the Fair Labor Standards Act (“FLSA”). In Arias v. Raimondo, 860 F.3d 1185, 1186 (9th Cir. 2017), an undocumented employee of a dairy farm in California filed a lawsuit in state court alleging various workplace violations under state law, including failure to pay overtime pay and provide rest and meal periods. Several weeks before the trial in the state lawsuit, the employer’s attorney began communicating with agents from U.S. Immigration and Customs Enforcement (“ICE”) in an attempt to have the employee taken into custody at a scheduled deposition and remove him from the country. The employee learned about the attorney’s actions and quickly settled his claims.

The employee then filed a federal lawsuit against his employer and the attorney for retaliation under the FLSA. The employee alleged that the deportation threats were apparently common practice for the attorney and even found an email the attorney purportedly wrote that stated:

“The time when I have had litigants deported, I have always simply taken action rather than make any threats. The attorneys find out when their clients are already gone.”

The district court dismissed the action against the attorney because it found that only an “employer” can be liable for retaliation under the FLSA.

The Ninth Circuit reversed, holding that the attorney could be liable for retaliation. Specifically, the panel held the FLSA’s anti-retaliation provision specifically applies to “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The FLSA defines “person” to include a “legal representative.”

The case will now return to the district court to determine if the attorney’s conduct constitutes retaliation under the statute.

This case serves as an important reminder to employers and attorneys alike that the reaction to a lawsuit can be just as damaging and costly, if not more, than the substantive wage and hour violations. It should also remind us that claims for substantive wage and hour violations and claims for retaliating against an employee require different evaluations, strategies, and actions. As the Ninth Circuit stated, “Retaliation is a different animal altogether.”

Moral of the story? Employers need to proceed carefully when facing claims from a current or former employee. Good legal advice can prevent a situation from turning bad to worse.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

DOL Invites Public Comment on Overtime Rule

Posted on: July 26th, 2017

By: Paul H. Derrick

The U.S. Department of Labor has announced that it is formally seeking public comment on the 2016 compensation revisions in the regulations defining the federal Fair Labor Standards Act’s so-called “overtime rule” or “white collar” exemptions.

The overtime rule, which has been blocked by a federal court since November 2016, would require employers to pay certain executive, professional, and administrative employees at least $913 each week in order to avoid having to pay them overtime for all time worked beyond 40 hours in a work week. Under pressure from the business community, the Trump administration previously has suggested that the DOL would likely come up with a salary threshold that is lower than $913 per week but higher than the current level of $455.

The DOL’s announcement says that it is seeking input on 11 broad topics, including:

  • Whether factors such as number of employees and geographic location should be considered in setting the salary threshold for a given employer;
  • Whether executive, professional, and administrative employees should be subject to different salary thresholds;
  • The extent to which employers had already increased salaries of exempt employees (to at least $913 per week) in anticipation of the overtime rule going into effect and what strategies might be in place to deal with employees who would have been eligible for overtime pay under the now-blocked rule;
  • Whether an exemption test that relies only on duties (and does not consider salary) might be preferable, and, if so, which duties should be taken into account; and
  • Whether and on what basis the compensation thresholds should be “automatically updated.”

A copy of the DOL’s request for public comment is available here. The 60-day comment period will end on September 25, 2017.

We will continue to keep you apprised of developments in this area as they occur. In the meantime, if you have any questions or would like more information, please contact Paul Derrick at [email protected].

Circuit Split at a Tipping Point

Posted on: July 19th, 2017

By: Michael M. Hill

Many people know that employers in hospitality industries, like restaurants and hotels, where employees customarily receive tips from customers, are allowed under federal law to pay their tipped employees less than the federal minimum wage as long as these employees earn enough in tips to make up the difference and the employer provides certain notices. Under the Fair Labor Standards Act (“FLSA”), this is known as the employer’s “tip credit.”

But what if the employer chooses not to take the tip credit and instead pays its employees the minimum wage? Can the employer then keep all the tips? In the Tenth Circuit, which covers federal courts in Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming, the answer is “yes.”

In Marlow v. New Food Guy, Inc., No. 16-1134 (10th Cir. June 30, 2017), a catering company chose not to take the tip credit and instead paid its employee $12 an hour and $18 an hour for overtime. But the employee sued under the FLSA, claiming that she also was entitled to a share of the tips paid by the company’s customers. A federal court in Colorado dismissed the case, and the Tenth Circuit affirmed, holding that the FLSA does not require employers to pay its customers’ tips to its employees if the employer already is paying at least the minimum wage.

The interesting thing about this ruling is the employee’s argument that letting the company keep the customers’ tips violated a 2011 Department of Labor (“DOL”) regulation that tips are the property of the employee. The Court did not disagree; its holding directly contradicts this regulation. But the Court held that the DOL exceeded its authority in issuing the regulation. Congress did not tell the DOL to regulate ownership of tips; nor was there any ambiguity in the statute that needed clarification. Thus, in the Tenth Circuit’s view, because the DOL spoke without invitation or authority, this regulation is invalid.

The Supreme Court may well step in as we now have a circuit split on the issue. In Oregon Rest. & Lodging Ass’n v. Perez, 816 F.3d 1080 (9th Cir. 2016), which we wrote about here, the Ninth Circuit upheld this same regulation in holding that a company could not force its tipped employees to pool their tips with non-tipped employees (such as kitchen staff), even if the company paid minimum wage or higher, because, under the DOL regulation, tips are the property solely of the employee. The Ninth Circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

The bottom line is that employers of tipped employees, with operations in multiple states, need to be sure their policies regarding tips comply with the interpretation of federal law in their circuit, as well as with the applicable compensation laws of their state.

For any questions, please contact Michael Hill at [email protected].