Legal Wage-hour Issues for Industry Employers

On March 6 and 7, Venable LLP offered key employment-focused legal seminars at the 2016 International Restaurant & Foodservice Show of New York at the Javits Center.

This is the fifth year that Venable has presented at the one of the nation’s preeminent foodservice trade shows. The IRFSNY is the only comprehensive event devoted to the Eastern U.S. restaurant, foodservice and hospitality market, and is attended by more than 16,000 industry professionals each year.

On Sunday, March 6, attorneys Allison Gotfried and Benjamin Stockman of Venable’s Labor and Employment practice in New York offered a presentation called, “A Table for Two: Joint Employer Issues for Restaurants, Franchises, and Food Service Employers.”

The seminar examined common scenarios in which two businesses jointly employ a worker and thus may be jointly liable for compliance with various employment and labor laws. Such a determination is based on the varying standards released by the National Labor Relations Board, the United States and New York State Departments of Labor and the United States Equal Employment Opportunity Commission. The Venable presentation addressed how each of these agencies is looking more closely at employers’ staffing practices.

Ms. Gotfried and Mr. Stockman explained that joint employer issues will continue to be a challenge for the restaurant and foodservice industry. They noted employers must be conscientious about who is performing their work, how relationships with third parties, franchisees, or subsidiaries are structured, and how they interact with these workers on a daily basis.

On Monday, March 7, Nicholas Reiter of Venable’s New York-based employment practice offered a seminar called “Don’t Get Burned: Five Common Wage & Hour Mistakes Restaurant and Foodservice Employers are Still Making.” In his presentation, Mr. Reiter offered a room full of industry managers clear detail on how current wage-hour laws and regulations work and what pitfalls to avoid.

He noted some of the issues causing restaurant operators the most headaches, including sick leave, overtime wages, tip credits and minimum wage, recordkeeping obligations, and mandatory uniform pay requirements.

Regarding paid sick leave, Mr. Reiter advised employers to always notify workers about their rights and to have any policy in writing as evidence that employees have been properly notified on sick leave.

Another key issue for restaurant employers are overtime wages, and which employees are entitled to them. Mr. Reiter explained that hourly employees must be paid 1.5 times their regular hourly rate when they work more than 40 hours a week. Mr. Reiter explained that employees who have management responsibilities – including a say on hiring/firing of staff, or those who make decisions about inventory purchases – are generally exempt from overtime consideration.

Mr. Reiter advised employers on the often-confusing rules governing tip credit. “If a tipped employee performs non-tipped work, such as stocking shelves or carrying inventory, for either two hours or 20% of their work shift, the employer is prohibited from taking a tip credit against the employees’ minimum wage for the entire work shift,” he explained.

Employers must also know when they are responsible for providing uniforms for staff. Mr. Reiter pointed out that if a covered employer requires a uniform, it must also cover the costs of cleaning it. One way to avoid incurring this cost is to require a dress code and provide removable name tags with company logos, he said.

Mr. Reiter drove home the importance of keeping records. He advised employers to maintain records regarding pay rate notices to new hires (and revised notices covering changes in compensation), as well as contemporaneous schedule and pay records, and to always provide written notices pertaining to sick paid leave, vacation days and personal time off.

“New York employers must maintain payroll and time-keeping records for employees for at least six years or face potential civil and criminal penalties,” he warned.

The three-day-long International Restaurant & Foodservice Show of New York was the first major restaurant industry event in the 2016 calendar year on the East Coast, and featured more than 500 leading vendors in the industry.

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