DOL Proposes New Rules for Tipped Employees
|
10/23/2019
|
By: Forrest Rhodes
|
If
your
business
has
employees
who
receive
tips,
you
need
to
know
about
the
Department
of
Labor’s
(DOL)
proposed
changes
to
its
tip
regulations.
As
background,
the
Fair
Labor
Standards
Act
(FLSA)
generally
requires
covered
employers
to
pay
employees
at
least
the
federal
minimum
wage,
which
is
currently
$7.25
per
hour.
However,
the
FLSA
allows
employers
to
pay
tipped
employees
as
little
as
$2.13
per
hour
and
apply
their
tips
as
a
credit
toward
satisfying
the
full
minimum
wage
(the
“tip
credit”).
In
2018,
the
FLSA
was
amended
to
provide
that
an
employer
“may
not
keep
tips
received
by
its
employees
for
any
purposes,
including
allowing
managers
or
supervisors
to
keep
any
portion
of
employees’
tips,
regardless
of
whether
or
not
the
employer
takes
a
tip
credit.”
The
2018
amendment
also
rescinded
DOL
regulations
that
prohibited
employers
from
requiring
tipped
employees
(such
as
servers
and
bartenders)
to
share
their
tips
with
traditionally
non-tipped
employees
(such
as
cooks
and
dishwashers),
even
when
the
employer
does
not
take
a
tip
credit.
The
proposed
new
regulations
would
further
implement
and
clarify
these
2018
statutory
changes.
The
main
provisions
are
as
follows:
- Employers,
managers,
and
supervisors
are
prohibited
from
keeping
employee
tips
(including
participating
in
tip
pools)
under
any
circumstances.
- If
the
employer
pays
all
employees
at
least
the
full
federal
minimum
wage
(meaning
the
employer
is
not
taking
a
tip
credit),
then
the
employer
can
establish
required
tip
pools
between
all
workers,
including
customarily
and
Continue Reading...
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|
Bonuses: Don't Let Overtime Pay Requirements Grinch Your Holidays
|
12/10/2017
|
By: Forrest Rhodes
|
‘Twas
the
eve
of
the
holidays
and
all
through
the
plant,
There
was
hustle
and
bustle
from
all
plus
an
ant.
The
boss
was
pondering
--
What
should
I
offer?
A
holiday
bonus,
perhaps?
Is
there
enough
in
the
coffer?
A
bonus
sounds
good
--
could
it
be
any
trouble?
Our
employees
will
love
it;
they
may
even
work
double.
There
must
be
a
catch,
else
why
this
ol’
rhyme?
You
must
understand
--
it
may
affect
overtime.
No
employer
wants
to
be
a
Grinch
this
holiday
season,
but
every
employer
should
be
aware
of
how
Christmas
and
other
end-of-year
bonuses
can
affect
overtime.
If
you
decide
to
give
a
bonus
this
holiday
season,
the
manner
in
which
it's
announced
and
calculated
could
affect
whether
you
also
have
to
go
back
and
recalculate
your
nonexempt
employees'
overtime
pay.
This
probably
isn't
the
thank-you
that
you
wanted
for
your
holiday
bonus.
General
rule
on
bonuses
As
our
faithful
readers
are
aware,
nonexempt
private-sector
employees
are
entitled
to
be
paid
overtime
for
all
hours
worked
over
40
in
a
workweek.
The
Fair
Labor
Standards
Act
(FLSA)
requires
that
you
base
your
overtime
calculations
on
the
employee's
“regular
rate.”
This
is
typically
her
hourly
wage
rate
adjusted
to
reflect
certain
specific
forms
of
additional
compensation
you
may
provide
in
exchange
for
her
services.
Bonuses
that
are
provided
as
a
direct
or
indirect
incentive
for
employees
to
work
harder
or
more
efficiently
are
one
type
of
additional
compensation
that
must
be
included
in
an
employee's
regular
rate.
These
Continue Reading...
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|
Federal Court Puts DOL Salary Changes on Ice
|
11/23/2016
|
By: Forrest Rhodes
|
Late
yesterday
afternoon,
a
federal
judge
in
Texas
issued
an
order
preliminarily
enjoining
the
DOL's
proposed
amendments
to
the
white-collar
exemptions
under
the
FLSA. The
most
notable
aspect
of
these
proposed
changes
was
the
substantial
increase
in
the
minimum
salary
necessary
for
exempt
status,
from
the
current
$23,660
to
$47,476
per
year.
This
decision
arose
from
two
recently
filed
cases
brought
against
the
Department
of
Labor
by
a
group
of
state
Attorneys
General
and
a
coalition
of
business
advocacy
groups.
Although
the
court
did
not
issue
a
final
decision
on
the
merits
of
the
issues,
it
determined
that
it
was
substantially
likely
that
the
plaintiffs
would
prevail
on
their
argument
that
the
DOL lacked
the
authority
to
impose
a
salary
requirement
that
could
be
determinative
of
exempt
status,
regardless
of
an
employee's
job
duties
or
responsibilities.
The
injunction
does
not
end
the
litigation
in
those
cases,
but
it
effectively
places
the
regulatory
amendments
on
indefinite
hold
until
those
cases
conclude
through
final
decisions.
While
it's
possible
that
the
court
could
ultimately
decide
to
lift
the
injunction,
or
the
district
court's
decision
could
be
reversed
on
appeal,
neither
of
those
decision
points
is
likely
to
occur
in
the
near
term,
or
before
the
Trump
Administration
takes
over
the
DOL.
How
and
to
what
extent
the
Trump
DOL decides
to
continue
to
fight
for
these
amendments
remains
to
be
seen.
For
now,
employers
should
continue
to
follow
the
current
requirements
for
exempt
status,
which
are
paying
a
salary
of
at
least
$455
per
week
per
the
current
salary
Continue Reading...
|
|
DOL Finally Issues New FLSA Regulations
|
05/20/2016
|
By: Forrest Rhodes
|
On
May
18,
the
Department
of
Labor
issued
the
long-awaited
regulatory
amendments
to
the
white
collar
exemptions
under
the
Fair
Labor
Standards
Act.
Proposed
changes
were
published
last
summer,
and
after
a
period
of
public
comment
(and
more
DOL
thought
and
analysis)
the
regulations
in
their
final
form
(known
as
the
Final
Rule)
are
now
on
the
street.
In
general,
the
regulatory
changes
are
as
expected
and
will
go
into
effect
on
December
1,
2016.
The
focal
point
of
the
changes
was
to
increase
the
minimum
salary
for
exempt
status.
Although
the
proposed
changes
suggested
the
new
salary
could
be
at
or
above
$50,000
per
year,
the
Final
Rule
adopts
a
more
conservative
figure
(in
DOL’s
eyes)
of
$913
per
week
($47,476
annually).
While
certainly
less
than
what
it
could
have
been,
this
still
represents
a
more
than
100%
increase
over
the
current
minimum
salary
of
$455
per
week
($23,660
annually).
Similarly,
for
employers
who
utilize
the
exemption
for
highly
compensated
employees,
the
minimum
compensation
figure
will
increase
from
its
current
annual
amount
of
$100,000
to
$134,004.
Also
as
expected,
the
new
regulations
will
incorporate
an
automatic
salary
update,
but
instead
of
the
annual
updates
that
the
proposed
regulations
suggested,
the
Final
Rule
adopts
an
update
schedule
of
every
three
years.
Thus,
after
the
new
salary
amounts
go
into
effect
on
December
1st,
they’ll
remain
in
place
until
January
1,
2020,
and
will
update
every
three
years
after
that.
|
|
OSHA Addresses Unique Recordkeeping Scenarios
|
04/16/2016
|
By: Forrest Rhodes
|
For
those
employers
who
fall
under
OSHA’s
recordkeeping
requirements,
it’s
usually
relatively
easy
to
determine
whether
a
workplace
injury
must
be
recorded.
Sometimes,
however,
as
a
couple
of
recent
cases
highlight,
the
facts
are
a
bit
more
tricky.
Take
the
employee
at
a
West
Virginia
window
manufacturer.
He
sustained
a
small
cut
(more
like
a
scratch)
to
his
index
finger
while
working.
When
the
cut
began
to
bleed,
the
employee
asked
a
co-worker
to
help
him
put
a
Band-Aid
on
the
cut.
This
sounds
like
a
clear
case
of
basic
first
aid,
which
is
not
recordable.
But
as
the
late
Paul
Harvey
would
say,
there’s
more
to
the
story.
As
the
co-worker
was
applying
the
Band-Aid,
the
employee
saw
some
of
his
blood
and
fainted.
He
briefly
lost
consciousness,
but
did
not
suffer
any
additional
injury
from
the
fainting.
Does
this
change
the
recordability
of
the
events?
OSHA’s
Technical
Support
Division
said
“yes.”
While
the
scratch
was
not
recordable
because
it
only
required
basic
first
aid
for
treatment,
the
employee’s
fainting
was
a
separate
event
that
met
one
of
OSHA’s
express
general
recording
criteria
(i.e.,
loss
of
consciousness).
The
fact
that
the
fainting
was
caused
by
an
otherwise
non-recordable
event
did
not
impact
the
decision.
Another
recent
case
that
presented
unique
facts
occurred
when
the
employee
of
a
commercial
construction
contractor
hurt
himself
on
the
job,
but
subsequently
tested
positive
pursuant
to
the
employer’s
post-accident
drug
and
alcohol
test.
Turns
out
the
employee
was
drunk
and
the
alcohol
likely
contributed,
if
not
outright
Continue Reading...
|
|
DOL Proposes Significant Increase in Required Salary for FLSA Exemptions
|
07/01/2015
|
By: Forrest Rhodes
|
After
over
a
year
of
waiting
and
wondering,
the
Department
of
Labor
finally
issued
its
proposed
amendments
to
the
white-collar
exemptions
under
the
Fair
Labor
Standards
Act.
These
are
often
referred
to
as
the
salaried
exemptions
because
of
the
threshold
requirement
that
the
employee
be
paid
on
a
salary
basis
at
a
minimum
salary
level.
As
you
may
recall,
the
impetus
for
these
changes
was
direction
from
President
Obama
that
the
exemptions
were
too
many
employees
were
being
treated
as
exempt.
In
other
words,
the
stated
goal
of
the
proposed
changes
was
to
make
sure
that
more
employees
will
become
non-exempt
and
thus
entitled
to
overtime.
DOL’s
tool
for
effectuating
that
direction
is
to
raise
the
required
minimum
salary
for
exempt
status
from
its
current
level
of
$455
per
week
($23,660
per
year)
to
$921
per
week
($
47,892
per
year).
The
proposed
changes
also
affect
the
qualifying
salary
for
“highly
compensated
employees,”
who
are
exempt
under
less
rigorous
duties
requirements.
A
highly-compensated
employee
will
now
have
to
be
paid
total
annual
wages
(salary,
bonuses,
commissions,
etc.)
of
at
least
$122,148
(an
increase
from
the
current
$100,000).
In
addition,
the
amended
regulations
will
provide
for
annual
updates
to
the
requisite
salary
levels.
Of
note,
while
the
currently
proposed
changes
target
only
the
required
salary
levels,
DOL
said
that
it
continues
to
look
at
whether
changes
to
the
job
duties
tests
applicable
Continue Reading...
|
|
Wage and Hour Self-Audits
|
05/20/2015
|
By: Forrest Rhodes
|
In
all
too
many
cases
the
first
time
an
employer
takes
a
critical
look
at
its
own
wage
and
hour
practices
is
in
the
context
of
an
FLSA
audit
conducted
by
the
Department
of
Labor. This
is
less
than
ideal
because
the
employer
has
no
opportunity
to
fix
or
correct
issues
on
its
own
terms. If
the
DOL
determines
a
violation
has
occurred,
it
will
require
the
payment
of
back
wages
(typically
going
back
two
years)
and
depending
on
the
facts
and
circumstances
it
can
also
require
liquidated
damages
(effectively
doubling
the
back
wages). In
extreme
cases
or
those
involving
repeat
offenses,
DOL
can
impose
additional
monetary
fines
known
as
civil
money
penalties.
The
good
news
is
that
employers
don’t
have
to
wait
for
the
DOL
to
knock
on
their
door
to
internally
assess
their
wage
and
hour
compliance. Self-audits
are
an
effective
tool
for
this
purpose. They
can
be
tailored
to
the
particular
employer’s
needs
in
order
to
stay
cost-effective,
but
provide
the
most
benefit
when
the
scope
is
similar
to
what
the
DOL
would
do.
Not
only
does
the
audit
help
with
overall
compliance,
but
it
also
demonstrates
the
employer’s
good
faith
intent
to
comply
with
the
FLSA.. This
can
be
critical
in
litigation
because
it
helps
to
refute
the
showing
of
willfulness
that
the
plaintiff
will
be
trying
to
make
in
order
to
extend
the
period
of
potential
recovery
(i.e.
statute
of
limitations)
from
two
years
to
three
years.
There
are
additional
benefits
to
having
legal
counsel
involved
in
the
audit;
namely,
potential
protection
of
the
Continue Reading...
|
|
DOL Delays Proposed Amendments for White Collar Exemptions
|
11/26/2014
|
By: Forrest Rhodes
|
The
Department
of
Labor
recently
announced
that
the
roll-out
of
its
proposed
amendments
to
the
white
collar
exemption
regulations
under
the
Fair
Labor
Standards
Act
(which
were
previously
scheduled
for
a
November
release)
have
been
pushed
back
to
sometime
in
2015.
Various
reports
have
targeted
a
release
date
between
February
and
May.
From
comments
by
the
Secretary
of
Labor
earlier
this
year,
these
amendments
are
expected
to
significantly
restrict
the
scope
of
the
white
collar
exemptions
with
the
goal
of
making
more
employees
eligible
for
overtime.
It’s
likely
that
DOL
will
seek
to
achieve
this
goal
through
a
combination
of
a
higher
minimum
salary
(currently
$23,660
per
year)
along
with
stricter
job
duty
requirements.
While
these
changes
may
be
significant,
they
are
not
imminent.
The
proposed
amendments
will
be
open
for
a
period
of
public
comment
that
is
at
least
30
days,
and
usually
from
90
to
120
days.
After
that
period
is
closed,
DOL
will
digest
the
comments
and
determine
if
any
of
the
amended
regulations
should
be
revised
before
they
are
published
for
final
implementation.
It’s
unlikely
that
any
of
the
proposed
changes
will
be
in
place
before
the
end
of
2015
at
the
earliest.
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Editors
Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers, the General Employment Law Guy
Jason Lacey, the Employee Benefits Guy
Additional Sources

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