Happy Holidays from all of us at Hanft Fride!
December 2018 – Vol. 20, No. 12
The Employer E-Letter: Labor and Employment Law News
from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.
Co-Editors, Scott A. Witty, saw@hanftlaw.com and Richard R. Burns, rrb@hanftlaw.com, or 218.722.4766. Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
This Month’s Topics:
- Department of Labor Revises Guidance Regarding Tipped Worker Rule
- NLRB ADVISORY MEMO: EMPLOYERS MAY WITHHOLD FINANCIAL INFORMATION CONCERNING TAX LAW
- Seventh Circuit Adopts Average Hourly Wage across a Workweek as Relevant Unit for Determining FLSA Minimum Wage Violation
- Considering Company Layoffs? Then Document the process
- Tip Of The Month
Department of Labor Revises Guidance Regarding Tipped Worker Rule
The United States Department of Labor (“DOL”) recently issued an opinion letter changing its guidance as to the wages required to be paid tipped employees. Opinion letters are issued in response to inquiries from the public and do not have the legal force of regulations, but they are given some consideration by the Courts in interpreting the law. The opinion letter at issue essentially rescinded what has been commonly referred to as DOL’s “80/20” rule. The 80/20 rule was implemented via an opinion letter in 2009. It required that any employee who received tips and was paid at the applicable state’s lower tipped minimum wage, but performed non-tipped work that constituted at least 20 percent of their work day, receive the non-tipped minimum wage for the time he or she spent performing non-tipped work. The rule was difficult for many employers to apply due to the fact it was hard for them to track how much time employees performed certain tasks. For instance, it was difficult to determine how much time a server spent filling and replacing condiments compared to how much time they spent serving customers. Wage and Hour Opinion Letter – FLSA 2018-27.
NLRB ADVISORY MEMO: EMPLOYERS MAY WITHHOLD FINANCIAL INFORMATION CONCERNING TAX LAW
The National Labor Relations Board (“NLRB”) recently issued an advisory opinion regarding whether an employer must disclose any financial benefit it received from the Tax Cuts and Jobs Act of 2017 (the “Act”) to the union that represented a portion of the employer’s workforce. The request was made in preparation for the bargaining process. The union argued that the intent of the Act was to provide a financial gain that would “trickle down” to employees, and the union wanted to know how much should “trickle down.” The employer refused to provide the requested information. In response, the union alleged that the employer did not bargain in good faith, in violation of the National Labor Relations Act. The NLRB memorandum states that the employer did not fail to bargain in good faith because the union failed to establish that the requested information was relevant and necessary. The union stated it needed the information in order to determine if unionized employees should receive increased compensation equivalent to nonunion employees. The NLRB advised that the information was not reasonably necessary to frame or support any union bargaining proposals. Nexstar Media Group, Inc., Case: 03-CA-220094
Seventh Circuit Adopts Average Hourly Wage across a Workweek as Relevant Unit for Determining FLSA Minimum Wage Violation
Consistent with prior rulings by its sister circuits and the Department of Labor, the Seventh Circuit Court of Appeals recently ruled that under the Fair Labor Standards Act (FLSA), the relevant unit for determining a pay violation is not wages per hour, but the average hourly wage across a workweek. The other circuit courts that have ruled the same way include the Second, Fourth, Sixth, Eighth, Ninth, Eleventh and D.C. Circuits. In Hirst v. SkyWest, Inc., the Court affirmed the dismissal of flight attendants’ FLSA claims because none of them could show a single workweek in which they were paid an average wage less than $7.25 per hour. However, because the FLSA reserves the authority to the states and localities to regulate the labor of their own citizens and companies, the appeals court reversed the dismissal of the employees’ state and local wage claims to be heard by a state court. Hirst v. SkyWest, Inc., Nos. 17-3543 & 17-3660, (7th Cir. December 12, 2018).
Considering Company Layoffs? Then Document the process
A recent decision by the Ninth Circuit Court of Appeals served as a good reminder that employers can generally avoid discrimination claims stemming from reductions in force by documenting non-discriminatory reasons for the layoff. The plaintiff in Simpson v. Computer Sciences Corp. alleged he was dismissed because he was diagnosed with prostate cancer. Case No. 17-55502 (9th Cir. August 20, 2018) The employer was able to successfully defend against the employee’s claim by pointing to documentation demonstrating that the decision to dismiss the employee predated his disclosure of cancer. The Ninth Circuit held that such documentation was fatal to the employee’s discrimination claim because the employee could not establish a prima facie case of discrimination. Had the employer in Simpson not documented its reduction in force process as well as it did, the employee’s claim may have been allowed to proceed, resulting in significant expense and liability exposure to the employer. Therefore, employers considering a reduction in force should be sure to diligently document each phase of the process because an employer never knows when a belated claim of discrimination will arise. Documenting the process may well make the difference between a discrimination claim that is summarily dismissed and one that is allowed to proceed to trial.
TIP OF THE MONTH: Handling chronically tardy employees can be challenging. Many employers verbally admonish an employee that is frequently late to work, but documenting such admonishments is important as well. A supervisor’s contemporaneous note or more formal written reprimand can serve as important and convincing evidence in a case where an employee is terminated for repeated late arrivals but then alleges the discharge was discriminatory.
Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota. Visit our website at www.hanftlaw.com for general information on the firm and our attorneys. Our employment lawyers include Tom Torgerson, Rob Merritt and Scott Witty. Richard Burns is now of Counsel.
The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E‑letter.
To subscribe or unsubscribe to Employer E-Letter, e-mail your request to lml@hanftlaw.com or call Scott Witty at 218.722.4766.
Copyright 2018 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218.722.4766; Fax 218.529.2401.