Rules relating to tip credit and pooling have resulted in significant debate among legislators, regulators, and the courts, leading to confusion, further litigation, and, in many cases, substantial liability or settlements involving employers that operate in the hospitality industry.  Today, the U.S. Department of Labor (“DOL”) published proposed rulemaking that aims to bring greater clarity to the morass of tip-related legislation, as well as previous agency rules and interpretations.  I describe below some of the notable elements of these proposed rules.

The proposed rulemaking will codify the DOL’s recent guidance that an employer may take a tip credit for any amount of time an employee in a tip-earning occupation performs related non-tipped duties that are performed contemporaneously with, or within a reasonable time immediately before or after, the tipped duties.  The proposed regulations specifically identify a server’s tasks of cleaning and setting tables, toasting bread, making coffee, and occasionally washing dishes or glasses as related non-tipped duties that qualify as time for which a tip credit may be taken.  In addition to these examples, the proposed rulemaking provides that a non-tipped duty is related to a tip-related occupation if the duty is identified as a task of a tip-producing occupation in the Occupational Information Network (O*Net).  This is distinguishable, however, from work unrelated to the tipped occupation, which would then be considered a “dual job” for which a tip credit cannot be taken.

The proposed new rulemaking also reiterates the provision in the Consolidated Appropriations Act of 2018 that prohibits employers, managers, and supervisors from keeping any tips received by employees.

In addition, the DOL will amend its regulations to remove language imposing restrictions on an employer’s use of tips when the employer does not take a tip credit, meaning that traditional back-of-the-house employees, such as cooks and dishwashers, could participate in a tip pool.  The proposed new rulemaking does not, however, affect current regulations providing that employers who take a tip credit against tipped employees’ wages may maintain a tip pool among only tipped employees and not employees who do not customarily and regularly receive tips.

The comment period for this proposed rulemaking will remain open until December 9, 2019, after which time the DOL will publish and implement a final rule.

I will be sure to update you on the state of this rulemaking as further developments unfold.

This week, a one-year “revival” period of statute of limitations began for individuals who assert civil claims of child abuse to file claims against institutions and individuals pursuant to New York’s Child Victims Act, even if those claims had already expired and/or were dismissed because they were filed late. The premise behind the Child Victims Act is that children are often prevented from disclosing abuse due to the social, psychological and emotional trauma they experience.

Additionally, the Child Victims Act, also expands the statute of limitations for bringing criminal claims against alleged perpetrators of child sexual abuse, and  permits alleged victims of these crimes to file civil lawsuits up until they reach age 55. This aspect of the legislation will have a significant impact on the volume of criminal cases, and even more so civil lawsuits, 385 of which were filed in the first hours of the revival periodwith hundreds more geared up for filing in the upcoming weeks and months. Indeed, the New York State court system has set aside 45 judges specifically to handle the expected crush of cases.

Institutional Changes Following the New Child Victim’s Act

Religious and educational institutions, as well as hotels or clubs that run children’s programs on their premises, that are committed to providing a safe environment for children should be thinking about how they can implement safeguards against child abuse within their institutions. An important step is keeping internal lines of communication with staff and families open, as well as educating staff and leadership as to their reporting obligations under New York law and on how to provide appropriate support if child abuse is suspected.

The Child Victims Act joins the Sex Harassment Bill also signed into law by Gov. Cuomo as significant changes by New York Legislators involving sexual abuse and harassment in New York State.

Our Employee Benefits and Executive Compensation practice now offers on-demand “crash courses” on diverse topics. You can access these courses on your own schedule. Keep up to date with the latest trends in benefits and compensation, or obtain an overview of an important topic addressing your programs.

In each compact, 15-minute installment, a member of our team will guide you through a topic. This on-demand series should be of interest to all employers that sponsor benefits and compensation programs.

In our newest installmentTzvia Feiertag, Member of the Firm in the Employee Benefits and Executive Compensation practice, in the Newark office, presents “HIPAA Privacy and Security Rule Compliance.”

While employers themselves are not directly regulated by the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (“HIPAA”), most employers that sponsor group health plans have ongoing compliance obligations. This crash course offers a brief overview of who and what is covered by these rules, why employers should care about HIPAA compliance, and five tips to maintain compliance.

Click here to request complimentary access to the webinar recording and presentation slides.

Earlier this summer, we reported on ground-breaking legislation in New Jersey that requires hotels with more than 100 guest rooms to supply hotel employees assigned to work in a guest room alone with a free panic button device and to adhere to a specific protocol upon activation of a panic button device by a hotel employee.  In what may signal the start of a national trend, Illinois just became the second state to pass similar legislation targeting not only hotels but also casinos located within its jurisdiction.

Under the newly created Hotel and Casino Employee Safety Act (Article 5 of Illinois Senate Bill 75), each hotel and casino must equip employees assigned to work in a guest room, restroom or casino floor on their own with a portable emergency contact device or panic button that can be used to summon help if an employee reasonably believes there is an ongoing crime, sexual harassment or assault, or other emergency.  Unlike its New Jersey analogue, the Illinois law applies to all casinos and hotels located in Illinois, regardless of their size, number of guest rooms, etc.  Significantly, the term “employee” includes both full- and part-time employees, as well as employees of subcontractors.

Similar to the New Jersey law, Illinois hotels and casinos must also develop and adhere to a written anti-sexual harassment policy to protect their employees from sexual assault and harassment by guests.  To comply with this requirement, the anti-sexual harassment policy must:

  • Encourage employees to immediately report any instance of alleged sexual assault or harassment by a guest; and
  • Establish a procedure whereby employees fearful of sexual assault, harassment, or other violence by a guest (i) cease work and leave the immediate area until assistance is provided by the employer and/or the police; (ii) receive a temporary work assignment for the duration of the offending guest’s stay at the hotel/casino; (iii) receive paid time off to file a police report or criminal complaint and, if required, testify as a witness at a resulting legal proceeding; and (iv) are informed of their state law rights against sexual harassment and retaliation (including retaliation for reasonably using a panic device and availing themselves of the protections afforded by the anti-sexual harassment policy).

The policy must be available in English, Spanish, and any other language spoken by a majority of its staff, and posted in conspicuous workplace locations.

The Hotel and Casino Employee Safety Act creates a private cause of action for employees and their representatives, provided that prior to filing suit, a representative of the employee notifies the hotel/casino employer in writing of the alleged violation and affords the employer 15 calendar days to remedy the violation.  Damages under the act include, but are not limited to, reinstatement, compensatory damages, and attorney’s fees and costs.  Economic damages are capped at $350 per violation but each day a violation continues constitutes a separate violation.

The Hotel and Casino Employee Safety Act becomes effective on July 1, 2020.  Illinois hotel and casino operators should use this time to order panic buttons appropriate for the size and physical layout of their building, develop a compliant anti-sexual harassment policy, and train staff on panic button procedures.

Earlier this year, we reported legislative efforts in Illinois to curb sexual harassment in the hospitality industry via Illinois House Bill 3551, which would require restaurants to adopt a sexual harassment policy and provide training to all employees.  While that bill appears to have stalled in the House, similar requirements appear in Illinois Senate Bill 75 (titled the “Workplace Transparency Act”), which, after sitting on the Governor Pritzker’s desk for several months, was finally signed by Governor Pritzker on August 9, 2019.

Section 2-110 of the Workplace Transparency Act requires every restaurant and bar operating in Illinois, regardless of its size or number of employees, to adopt and provide to all employees, within one week of hire, a sexual harassment policy (in English and Spanish) containing the following:

  • A prohibition on sexual harassment and retaliation for reporting sexual harassment allegations;
  • A description of how to report an allegation of sexual harassment internally;
  • An explanation of the internal complaint process available to employees;
  • Instructions on how to contact and file a charge with relevant state and federal agencies; and
  • A requirement that all employees participate in sexual harassment prevention training.

Notably, the definition of “restaurant” is very broad.  It includes “restaurants, coffee shops, cafeterias, and sandwich stands that give or offer for sale food to the public, guests, or employees,” as well as “kitchen or catering facilities in which food is prepared on the premises for serving elsewhere.”

While the Act requires all Illinois employers to provide annual anti-sexual harassment training to all employees, bars and restaurants must also provide annual “supplemental” anti-sexual harassment training to all employees, addressing issues endemic to the hospitality industry, as well as manager liability and responsibility under the law (i.e., training equal to or exceeding the free supplemental model training to be issued by the Illinois Department of Human Rights).

Violations of the Act not cured within 30 days could result in civil penalties up to $1,000 for the first offense.

The Act takes effect January 1, 2020.  Between now and then, we advise covered employers to work with counsel to draft and implement a sexual harassment policy and training program for employees (or alternatively, to at least plan on utilizing the forthcoming, state-issued training materials).

This Employment Law This Week® Monthly Rundown discusses the most important developments for employers in August 2019.

This episode includes:

  • Increased Employee Protections for Cannabis Users
  • First Opinion Letters Released Under New Wage and Hour Leadership
  • New Jersey and Illinois Enact Salary History Inquiry Bans
  • Deadline for New York State Anti-Harassment Training Approaches
  • Tip of the Week

See below to watch the full episode – click here for story details and video.

We invite you to view Employment Law This Week® – tracking the latest developments that could impact you and your workforce. The series features three components: Trending News, Deep Dives, and Monthly Rundowns. Follow us on LinkedInFacebookYouTubeInstagram, and Twitter and subscribe for email notifications.

Our colleagues Maxine NeuhauserNathaniel M. GlasserDenise Dadika, & Anastasia A. Regne

Following is an excerpt:

In Wild, which we discussed in a recent client alert, plaintiff Justin Wild (“Wild”) alleged that his employer, Carriage Funeral Holdings (“Carriage Funeral”) failed to reasonably accommodate his disability (cancer) and unlawfully discharged him in violation of the LAD because he used medical marijuana, as legally permitted by CUMMA. Carriage Funeral terminated Wild’s employment after he tested positive for cannabis following an on-duty motor vehicle accident.

The trial court dismissed the lawsuit holding that the fact Wild tested positive for cannabis  constituted a legitimate business reason for his discharge because cannabis use (medical or otherwise) remains prohibited under federal law. In rendering its decision the trial court relied on a provision in the law stating that CUMMA did not require employers to reasonably accommodate licensed use of medical marijuana in the workplace. The Appellate Division reversed, holding that the fact that CUMMA did not “require” employers to accommodate an employee’s use of  medical marijuana in the workplace, did not affect an employer’s requirement under the LAD to reasonably accommodate an employee’s disability, which could include an employee’s off-duty and off-site use of medical cannabis. …

Read the full article here.

Colorado has joined a growing movement of states in passing laws that provide greater protections to employees and job applicants. Among these are the Equal Pay for Equal Work Act and a ban the box law, which limits criminal history inquiries for job applicants. The following is a breakdown of Colorado’s newest employment laws and how their implementation may impact employers and employees alike.

Equal Pay

Effective January 1, 2021, the Equal Pay for Equal Work Act (the “Act”) will expressly prohibit employers from paying employees of different genders different wages for “substantially similar work.” The law also prohibits pay discrimination on the basis of sex in combination with another protected category under Colorado law. Determining whether work is “substantially similar” depends on the nature of the job itself, as well as the skill set and level of responsibility of the employees involved.

Employers are permitted to have pay differentials if the employer can prove differences in compensation are based on one or more of the following factors:

  • A seniority system;
  • A merit system;
  • A system that measures earnings by quantity or quality of production;
  • The geographic location where the work is performed;
  • Education, training, or experience to the extent that they are reasonably related to the work in question; or
  • Travel, if the travel is a regular and necessary condition of the work performed.

Additionally, employers that can demonstrate a good faith effort through proactive measures to comply with the Act may be able to mitigate liability should a claim arise. Similar to “safe harbor” provisions in equal pay laws in Massachusetts and Oregon, such proactive measures should include regular audits of compensation practices. While these measures do not create a complete defense, employers that successfully present evidence of a “thorough and comprehensive pay audit” with the “specific goal of identifying and remedying unlawful pay disparities” may avoid liquidated damages. The key word here is “remedying”; employers that conduct pay audits, but then fail to take steps to correct unlawful pay discrepancies revealed by the audit, will not reap the benefits of the “safe harbor” defense and could instead find themselves without the proverbial port in a storm.

Notably, the Act goes further than most other comparable state wage discrimination laws by mandating notification to employees of employment opportunities. Employers must make reasonable efforts to provide notice of internal opportunities for promotion on the same calendar day the opening occurs. These announcements must disclose the hourly or salary compensation, or at the very least a pay range, as well as a description of benefits and other compensation being offered. Failure to comply with these provisions could result in fines of between $500 and $10,000 per violation.

Salary History

Following the lead of nine other states (and a number of localities), the Act also includes a provision barring employers from asking applicants about their wage or salary history. Specifically, employers may not:

  • Seek the wage rate history of a prospective employee;
  • Rely on a prior wage rate to determine the wages or salary to be offered;
  • Discriminate or retaliate against a prospective employee for failing to disclose his or her wage history; or
  • Discharge or retaliate against an employee for asserting rights protected by the Act on behalf of a prospective employee.

Unlike many other bans on salary history inquiries, the Colorado law contains no exceptions that would allow an applicant to voluntarily disclose salary history information or an employer to confirm an applicant’s prior salary after a conditional job offer is made and where the prospective employee wants to negotiate a higher salary.

Pay Transparency

Another portion of the Act provides that once an employee is hired, an employer may not:

  • Prevent employees from discussing their own compensation information with others; or
  • Require employees to sign a waiver that prohibits their ability to do the same.

Employers that violate this provision may be subject to fines and other legal and/or equitable relief, including reinstatement, promotion, pay increase, payment of lost wage rates, liquidated damages and reasonable attorneys’ fees.

Ban the Box

Colorado has also enacted a ban the box law (HB19-1025) that prohibits employers from inquiring into a job applicant’s criminal history on an application form.

Additionally, employers may not:

  • Advertise that a person with a criminal history may not apply for a position;
  • Place a statement in an employment application that a person with a criminal history may not apply for a position; or
  • Inquire about an applicant’s criminal history on an initial application.

Employers may perform criminal background checks later in the hiring process. There also is no prohibition against an employer obtaining publicly available criminal background reports. Several additional exceptions to the ban on advertisements and application inquiries apply if:

  • Federal, state, or local law or regulation prohibits a person who has a particular criminal history from being employed in a particular job;
  • The employer is participating in a program to encourage employment of people with criminal histories; or
  • The employer is required by law to conduct a criminal history record check for the particular position.

The Colorado Department of Labor and Employment is charged with issuing warnings and orders of compliance for violations and has the authority to issue civil penalties for subsequent violations. Private causes of action are not authorized by the law.

The law goes into effect on September 1, 2019 for businesses with eleven or more employees; for smaller businesses, the law becomes effective on September 1, 2021.

This post was written with assistance from Jenna D. Russell, a 2019 Summer Associate at Epstein Becker Green.

After a long legislative battle, the New York State Gender Expression Non-Discrimination Act (“GENDA” or “Law”), which was signed into law and became effective on January 25, 2019, explicitly added “gender identity or expression” as a protected class under the state’s non-discrimination laws. Now, under a proposed state regulation, the New York State Division of Human Rights (“DHR”) would amend its regulations, codified in NYCRR §466.13, prohibiting discrimination on the basis of gender identity, gender expression, and transgender status to conform with the Law.

The proposed regulation would amend NYCRR 466.13(b) to define “gender identity and expression” as “a person’s actual or perceived gender-related identity, appearance, behavior, expression or other gender-related characteristic regardless of the sex assigned to that person at birth, including but not limited to, the status of being transgender.” The change would match the definition in the Law.  Additionally, the phrase “gender identity or expression” would replace “gender identity” throughout the regulation. A new section, NYCRR 466.13(c), would also be added to clarify that “gender identity or expression” is now explicitly a separate protected class under the Human Rights Law.

Although the regulations may undergo some modifications, NYCRR §§ 466.13(b)(3) and 466.13(d) and (e) remain, making clear that discrimination based on gender identity or expression can be a type of disability discrimination as well as a form of sex discrimination. Under the Human Rights Law, a person meeting the criteria for a medical diagnosis of gender dysphoria is entitled to the disability protections provided by the Human Rights Law, including the right to reasonable accommodations. The DHR’s regulations would clarify that gender dysphoria is a disability under the  Human Rights Law, and reaffirm New Yorkers’ right to obtain employment, education, housing, and use of places of public accommodations without discrimination on the basis of gender identity or expression.

This Employment Law This Week® Monthly Rundown discusses the most important developments for employers in July 2019. Both the video and the extended audio podcast are now available.

This episode includes:

  • State Legislation Heats Up
  • NLRB Overturns Another Long-Standing Precedent
  • SCOTUS October Term 2018 Wraps Up
  • Tip of the Week: How inclusion and trust can increase innovation in the workplace

See below to watch the full episode – click here for story details, the video, and the extended audio podcast.

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