What Is the Payroll Audit Independent Determination Program?

Should You Participate in Payroll Audit Independent Determination (PAID)? The Payroll Audit Independent Determination (PAID) may be a solution for some restaurant owners to deal with wage violations. Even so, it is always wise to get a legal opinion so you can make an informed decision that protects your interests. How Does PAID Work? The incentive that PAID offers is that employers can resolve potential overtime and minimum wage violations under the FLSA without resorting to litigation. A few qualifications to participate in the program are that the employer has not been sued during the previous five years and is also not currently party to a lawsuit brought against them for FLSA violations. The PAID program encourages employers to do self-audits. If they find overtime or minimum wage violations, they can report the violations themselves and work to correct their mistakes and pay the affected employees the back wages owed. The self-audits focus on identifying potential violations, the employees affected by them, the timeframe of the violations and the amount of back wages owed. Once you have conducted the audit, you must submit the information to the Wage and Hour Division (WHD) and go through the compliance steps. The advantage of going through the steps and receiving WHD supervision and certification before paying back wages owed is that employees will have to waive their rights to pursue a private lawsuit. Challenges Restaurant Owners Face Paying a single employee back wages may not be the greatest threat that a restaurant owner faces. However, a collective lawsuit and paying many employees, plus penalties and other expenses can be daunting. Under the...

The Restaurant Industry and DOL Battle Over Tipped Wage Policy

Why Did the RLC Sue the DOL over Tipped Wages? On July 6, the Restaurant Law Center (RLC) sued the Department of Labor (DOL) over an enforcement policy that demanded tipped workers must receive full minimum wage under certain circumstances for non-tipped work. Workers spending 20 percent or more of their weekly hours doing tasks that were not tipped work had to receive full minimum wage for those hours. The RLC is the litigation department of the National Restaurant Association. It presented its case before a federal court in Texas, requesting that the court invalidate the policy. It claimed that under the Administrative Procedure Act, the policy was arbitrary and capricious. Tipped Wage Policy Details Tipped employees, such as bartenders and servers receive a minimum base of at least $2.13 per hour as long as their hourly pay plus tips is more than the full minimum wage of $7.25 per hour. If the employee’s tips plus $2.13 base do not total $7.25 per hour, the employer must make up the difference. Examples of side tasks that are not tipped functions include filling salt and pepper shakers, rolling silverware in napkins, stocking liquor, washing glasses and so on. Allegations Brought by the RLC According to a BNA article, the RLC alleges that the Obama Administration slipped a policy into the internal agency handbook without public notice or opportunity for dispute. Doing so was in violation of the Administrative Procedure Act (APA). The lawsuit requests the Court to set aside the provision and enjoin enforcement of the APA. The RLC argues that the policy is contrary to the Fair Labor Standards...

Paycheck Deductions: What Is Legal in New York?

Understanding NY Laws about Paycheck Deductions Laws vary from state to state regarding deducting for loans or legitimate business losses from an employee’s paycheck. New York has very strict labor laws regarding this, stricter than laws in many other states. In addition, current guidelines have changed from what they were in the past. Guidelines Regarding NY Paycheck Deductions New York State Labor Law provides guidelines that list what paycheck deductions are legal. After receiving notice of all terms and conditions of the payment/benefits and details about the manner in which the deductions will be made, employees must voluntarily authorize the deductions in writing. Authorized deductions include: Insurance premiums and prepaid legal plans Pension or health and welfare benefits Contributions to a bona fide charitable organization Purchases made at events sponsored by a bona fide charitable organization affiliated with the employer when 20 percent of the event’s profits are being contributed to a bona fide charitable organization U.S. bonds Dues or assessment to a labor organization Discounted parking or passes, tokens, fare cards, vouchers or items that enable mass transit for the employee Fitness center, health club, and/or gym membership dues Cafeteria and vending machine purchases made at the employer’s place of business and purchases at gift shops operated by the employer, where the employer is a hospital, college or university Pharmacy purchases made at the employer’s place of business Tuition, room, board and fees for pre-school, nursery, primary, secondary, and/or post-secondary educational institutions Day care, before-school and after-school care expenses Payments for housing provided at no more than market rates by non-profit hospitals or affiliates Similar payments for the...

What Should You Do If an Employee Sues Your Company?

Guidelines for Dealing with Lawsuits As the saying goes, knowledge is power, and knowing what steps are important to take when facing a lawsuit can help you take effective and quick action to protect your interests. Consult with an Employment Defense Lawyer The first and most important step to take is to review the lawsuit with an experienced employment defense attorney. You can learn more about your legal rights and find out the best way to deal with the lawsuit. Your attorney will have you preserve any documentation or records that relate to the case, which could include the following: Written documents Reports Emails Web pages Photos Videos Voice messages Text messages Any other electronic communications Do Not Personally Communicate with the Plaintiff Once an employee has filed a lawsuit, direct contact with the plaintiff about the lawsuit is not wise because anything you say could be misconstrued or used against you. You should have your employment defense attorney handle all communications with the plaintiff’s attorney. Consult with Your Insurance Agent Many lawsuits fall under the umbrella of a liability insurance policy, depending on what your policy covers. For example, employment practices liability insurance frequently covers a lawsuit and pays for attorney’s fees, court costs and a settlement or judgment. Do Not Ignore the Lawsuit and Take Action Right Away The worst thing you could do is to ignore the lawsuit, hoping it will go away. Time limitations exist for lawsuits, and ignoring the lawsuit could lead to the plaintiff filing for a Request for Default. A Request for Default would result in the plaintiff automatically winning the case...

Company Security and Surveillance: Where Should Employers Draw the Line?

Are Your Security and Surveillance Policies Violating Privacy Laws? Companies have the right to protect against internal theft or property destruction. They also have a responsibility to evaluate productivity and ensure their resources are used efficiently and effectively. If a company faces litigation, gathering evidence becomes a priority. As a means of gathering information, companies often use surveillance systems, whether gathering information related to production, theft, property damage, or for litigation purposes. Types of Surveillance Installing cameras for video surveillance is one approach to surveillance. Putting GPS tracking on company vehicles is another form. Monitoring software is also available to install in company computers and cell phones. What Types of Legal Precautions Should You Take? According to Business News Daily, employers should post signage, which states that the premises are monitored by security cameras. For computer monitoring, when the employee uses a company device, there are virtually no ramifications for installing monitoring software to monitor what employees are doing at work. Employers have the right to know whether the employee is working on tasks related to the job and what tasks are getting done. It is better for employers to require that employees use the business’s computers because they would not have the same right to install monitoring software on a device the employee owns. Where employers can run into trouble is when they acquire too much information of a private nature. Finding out an employee’s medical information would violate HIPPA or could lead to a lawsuit that claimed violation of the Genetic Information Act. Spying on employees who are exercising their right to discuss unionizing, collective bargaining, wages...

What Employers Should Know About Retaliation Claims

Retaliation Claims May Include Emotional Distress Damages A precedent has been set in relation to retaliation claims brought against employers. Two courts of appeals, the Sixth and Seventh Circuit Court of Appeals had both ruled that employees have the right to recover for emotional distress damages in retaliation claims brought under the Fair Labor Standards Act (FSLA). The National Law Review reported that a third court, the Fifth Circuit Court of Appeals also delivered the same ruling regarding damages for emotional distress. What Are the Case Details in This Third Ruling? A maintenance man, Santiago Pineda, while working for an apartment complex owned by JTCH Apartments, LLC received discounted rent as part of his compensation for doing apartment maintenance. After Pineda sought unpaid overtime, he and his wife received notice to vacate the apartments with the reason being given that they had failed to pay rent. JTCH at that point was claiming Pineda owed rent for the course of his employment. Pineda sued for damages based on the eviction and demand for back rent. He also entered an appeal regarding the district court’s failure to instruct the jury about his ability to claim damages for emotional distress related to his retaliation claim. The Fifth Court of Appeals ruled that the court was in error when declining to instruct the jury regarding Pineda’s right to damages for emotional distress, and it reversed and remanded the case for trial so the jury could decide on this potential damage. How Could the Ruling About Retaliation Claims Impact Employers? Employers should be aware that employees who also file for emotional distress damages could...