New Cases - What We’ve Seen Lately

At Pelton & Associates we’ve had a busy spring so far, and we have several new cases to show for it! This is just a sampling of the wide range of cases that we handle; employment law violations can occur at just any every level and every type of business. In our experience, employers say a lot of things to convince employees not to pursue an issue of improper wages, whether it’s “That’s how we’ve always done it” or “You receive a salary, you don’t get overtime.”

Video Surveillance: Although we generally do not seek out press coverage and did not seek out media attention for this case, you may have read about one of our recent cases. While the focus of our case is the wage and tip violations, the media was very interested in our clients’ allegations that Defendants – a well-known chain of casual dining restaurants in New York City – videotaped employee changing rooms in express violation of New York Labor Law. New York law is clear that employers are prohibited from videotaping employees in restrooms, locker rooms or any room designated for changing clothes.

Fixed Wage Rates: A common tactic for employers is to pay employees a fixed rate per shift, per day or per week regardless of the number of hours actually worked. This frequently results in employees not receiving minimum wage for all hours worked and not receiving overtime premiums (time and one-half) for hours worked in excess of forty (40) per week. Employees who receive fixed rates may also be working off-the-clock hours or pre-or post-shift work for which they are not paid.

Prevailing Wages: Construction workers and certain other employees who perform work on government or other public works projects are often entitled to a wage rate known as “prevailing wages,” which is set by the state or city and is frequently higher than an employee’s regular hourly wage. In New York, prevailing wage rates including supplemental benefits can approach $100 per hour for specialized laborers. In our experience, some employers do their best to avoid paying prevailing wages while hiding this fact from the government agency paying for the work. We’ve seen kickbacks, checks made out to employees that are signed back over to employers, instructions by employers to employees to lie to city and state officials asking about wages and blacked-out documents that employees are forced to sign, among other illegal tactics.

“Exempt” Misclassified Employees: Over and over employees tell us that although they work long hours, they do not receive any overtime because they are classified as “exempt” salaried workers. It’s true that truly “exempt” employees are not entitled to receive overtime classification, but it is not a matter of an employer simply dubbing an employee “exempt” or paying them a salary. First, a salary must be a true salary – if deductions are taken for partial days or weeks when an employee works less than forty (40) hours, the employee may effectively be an hourly employee entitled to overtime. Second, as we explain in more detail on this page, whether an employee is “exempt” depends on the specific facts of the job. We’ve seen employees with extremely “professional” titles who perform essentially clerical and help-desk duties, which are typically not exempt from overtime.

The “Tip Credit”
: If an employer follows all of the conditions imposed by law, it may pay certain tipped employees a rate known as the “tipped” minimum wage, which is lower than the full minimum wage. However, in order to qualify to “take the tip credit,” employers must strictly follow state and federal wage and hour laws including: providing accurate wage statements (in New York), paying at least minimum wage for all hours worked including pre- and post-shift work, and paying the correct overtime rate (1.5 times the full minimum wage minus the “tip credit) for all hours worked in excess of forty (40) hours per week. Tipped employees must receive the full minimum wage through a combination of wages and tips, and tipped employees must be permitted to keep all of their tips, except for amounts that they pay into a proper tip pool and amounts no higher than the rates charged by credit card companies for processing credit card payments.

Tip Pools
: If employees participate in a tip pool, it must comply with employment regulations. For example, we have a case where a chain of restaurants required its servers to pay into a tip pool out of gross sales, which frequently resulted in servers taking home very little and sometimes none of the tips they earned. Participation in a tip pool must be voluntary, not mandatory. Management employees cannot participate in tip pools – tip pools are limited to employees who customarily receive tips.

Even More Tip Issues
: Another important aspect of the “tipped minimum wage” is that employees earning this lower rate must spend all or most of their time performing tip-producing work. Employees who receive a substantial portion of their time (usually considered to be 20% or more) performing non-tip producing work, such as cleaning, setting up, preparing food and re-stocking, should receive the full minimum wage for time spent performing non-tip producing work. Service charges are also extremely tricky: New York law requires that if customers would reasonably believe that amounts billed as “gratuities” or “service charges” or “service fees” would go to tipped employees, tipped employees must actually receive these amounts.

Many of these issues are state-law specific, and employment law as a whole is constantly changing. For the latest updates and an analysis of a specific employment situation, you should contact experienced, knowledgeable attorneys with a proven track record of fighting for clients. At Pelton & Associates, e-mail and telephone consultations are always free.