With dozens of states and the federal government passing minimum-wage increases, Carolyn D. Richmond can look forward to a very busy 2007 as she works to keep her multistate restaurant clients compliant. Richmond is a labor attorney at Seyfarth Shaw LLP in New York, a full-service, multispecialty law firm with more than 700 attorneys in 10 cities. Richmond is national co-chair of her firm’s Restaurant Employment Practices Group, where she and her colleagues specialize in defending foodservice employers from wage-and-hour complaints, discrimination lawsuits, allegations of sexual harassment, and, more recently, attacks from those anonymously written blogs often called “cybersmear.”
With all of the different rates of minimum-wage increases, how should multistate operators make sure they don’t run afoul of wage-and-hour laws?
Multistate operators need to remember that when it comes to wage-and-hour laws the federal Fair Labor Standards Act is simply a floor—many states and even some municipalities have their wage-and-hour laws with minimum-wage rates that exceed the FLSA. In addition to knowing the minimum wage in each location, an operator should also be aware of which state permits a tip credit and which state does not.
What is the most common mistake operators make when it comes to payroll?
One of the most common mistakes that I have seen operators make is relying too heavily on outside payroll companies to implement minimum-wage increases or, for that matter, to correct any payroll error. When the Department of Labor or a court of law finds liability for a wage-and-hour violation, it will not assess a penalty against the payroll company. The financial penalty will be against the restaurant owner.
Another costly mistake is not properly paying employees for overtime hours. Under the FLSA, if a nonexempt employee works in excess of 40 hours in a one-week period, the employee is entitled to payment at one and one-half the regular rate of pay for those hours in excess of 40 hours.
Idon’t hear much anymore about restaurant employers getting in trouble for hiring only young, good-looking people. Is it still a problem?FAST FACTS
EDUCATION: bachelor’s degree from Cornell University’s School of Industrial and Labor Relations; law degree from New York Law SchoolBIRTHPLACE: New YorkHOBBIES: tennis, collecting early 20th century camerasFAVORITE LAW TV SHOW AND MOVIE: “L.A. Law” and “The Paper Chase”
I have seen a number of discrimination charges stemming from “help wanted” ads placed on Internet sites by restaurateurs seeking employees in protected classifications [such as age and gender]. I am often surprised by how many operators still do not realize it is not wise to seek “females only” for server positions or to indicate that bartender applicants should be “young men between 20 and 25.”
Asking for a picture with a resume is also taboo. A picture virtually invites a discrimination lawsuit if an applicant does not get an interview.
A hot-button issue for restaurant owners in 2007 has to be the hiring process. In 2006 the EEOC issued a report on its new “initiative” to combat systemic discrimination, that is, discrimination that has a broad impact on a particular industry, profession, company or geographic location.
In that report the EEOC indicated that the hospitality industry—along with retail—was one of its target industries. In addition to government taking a more detailed look at the restaurant community, employees themselves have been filing an increasing number of class-action litigation against multiunit operators concerning discrimination claims.