Articles Posted in Restaurant FLSA violations

Employment attorneys in New York and beyond are paying keen attention to the “Restoring Overtime Pay for Working Americans Act” currently under consideration in Congress.

Senator Tom Harkin of Iowa, along with eight co-sponsors, introduced this bill in mid-June. It addresses what the senators believe is an unnecessarily low threshold for the Fair Labor Standards Act (FLSA) “white collar exemption,” or the weekly income level at which employees become exempt from overtime requirements.

Currently, the minimum salary level to become exempt from overtime is $455 per week; the bill would increase this to $1,090 per week. Additional proposals include adjusting the “highly-compensated employee” designation from $100,000 per year to $125,000 per year and limiting the amount of work an exempt employee can spend every week on non-exempt job duties.

Our New York tip pool violation attorneys have spilled a lot of “virtual ink” talking about the trials and tribulations that restaurant workers face.

Sometimes, managers “nickel and dime” tipped employees by illegally pooling and then sharing their hard-won tips. Other times, restaurants unfairly confiscate tips (also illegally) to punish. And sometimes, awkward company policy just organically creates heartbreaking hassles.

In this case, fortunately, the story had a happy ending.

As we mentioned in our last post, wage and hour cases against fast-food restaurants, like Subway, Dunkin’ Donuts, and McDonalds, have been on the uptick over the past two years.

However, the fast-food industry is, if nothing else, hardy.

McDonalds, for instance, has withstood withering assaults from heath groups, who claim that the restaurant’s sugar-laden food causes obesity and diabetes, as well as from minimum wage advocates, who’ve agitated for years to raise the minimum hourly wage at various fast-food franchises.

In a recent expose on Subway wage and hour cases, this blog discussed a deeply disturbing CNN Money analysis, which revealed that the sandwich maker stands accused of 17,000 Fair Labor Standards Act violations committed over the past decade and a half.

The CNN analysis noted that there are 26,000 Subways across the United States — the highest number of any fast-food chains in the country, including McDonalds. However, the global mistreatment of Subway “sandwich artists” disturbed regulators enough to provoke the Department of Labor to get involved to boost Subway’s compliance with FLSA rules.

One Labor Department spokesperson told CNN: “it’s no coincidence that we approach Subway, because we saw a significant number of violations.”

Decades ago, during the height of the low fat diet craze, the Subway sandwich chain proliferated across the nation in short order. Buoyed by powerful marketing messages — one customer, “Jared,” claimed that he lost hundreds of pounds eating nothing but Subway sandwiches — the restaurant soon became an American institution, competing with fast food giants such as McDonalds, Burger King, and Wendy’s.

However, the last few years have delivered serious bad news for the sandwich maker.

Earlier this year, evidence emerged that Subway had been using a “yoga mat” chemical in its bread. This revelation grossed out thousands of consumers and forced Subway to fight a tough PR battle. Meanwhile, many new books and studies have emerged, suggesting that refined flour and bread (Subway’s main ingredients) may be responsible for diverse ills, including diabetes, obesity, heart disease and even Alzheimer’s.

In a push to make the labor market fairer, President Obama recently signed a memorandum that will offer overtime to many employees who currently don’t have that protection.

The Department of Labor (DOL) will likely soon mandate overtime for workers who earn more than $450 a week (roughly $23,600 annually). This move could have far reaching effects, not only for laborers and employers, but also for consumers and the general economy. For one thing, analysts believe this change will boost payroll tax revenue. Critics fear, however, that it will put greater burdens on businesses that are already struggling, thanks to the new healthcare regulations. Here are some other likely implications of this new overtime paradigm:

• Employees who had previously been exempt from getting overtime will now be able to collect time and a half for hours worked in excess of 40 hours a week.

In December, a New York federal judge heard arguments in a wage and hour case brought by Joseph & Kirschenbaum on behalf of contract attorney, David Lola. The case could have profound ramifications for law firms across the city and beyond.

Our own attorney, Maimon Kirschenbaum, argued that Lola should have been entitled to overtime pay, per the Fair Labor Standards Act (FLSA), since Lola needed to adhere to “extremely detailed protocols” when he did document review work, and that he had no ability to “exercise any judgment” that an attorney typically might render.

Unsurprisingly, representatives for Skadden, Arps, Slate, Meagher & Flom and Tower Legal Staffing — the defendants in this case — have taken a different view of document review. In a brief that they submitted to the court, Skadden made a passionate argument that “the federal overtime laws were not designed for advanced-degree professionals to accept premium wages and then make ‘gotcha’ arguments that they were misclassified for every period they performed a task a nonprofessional could allegedly also complete.”

Joseph & Kirschenbaum has been involved in many of the most prominent wage and hour cases of the 21st century – especially cases concerning restaurant tip pool violations. That said, even though we have deep experience and knowledge in this area of law – and about the cultural and economic implications of tipping – this topic is constantly evolving.

For instance, consider this curious trend: the proliferation of tipping at Starbucks and other coffee houses. Restaurant servers, who often earn less than minimum wage, often make up the difference through tips. Yet Starbucks employees earn above the federal minimum wage already, so the tips just add to their net. That’s a good thing, obviously. This model helps baristas earn a decent living, and it helps prevent management from engaging in practices that would violate the Fair Labor Standards Act (FLSA) or New York Labor Laws (NYLL).

Tips Going Up; Tippers Becoming More Numerous

Whether you work at a fine Manhattan restaurant or a small diner in the outer reaches of Queens, you’re protected by powerful pieces of legislation, including the Fair Labor Standards Acts (FLSA) and New York Labor Laws. Here are 5 common excuses that may be keeping you from getting the help that you really need:

• “They’re just taking a little money – it’s not that big a deal”

First of all, an injustice is injustice. An illegal act is an illegal act. Even small acts of “nickel and diming” can adding up. For instance, perhaps you’re “only” losing $50 a week due to unfair tipping or wage practices. That adds up to $200 a month or $2,400 a year!

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