With the changes brought on by the new administration, there are multiple legal issues that may come to the forefront in employment law for the restaurant industry in 2017. Here are some areas that the employment law team at Swartz Swidler believes that you should watch.
Liability issues in a case that is currently on appeal following a National Labor Relations Board decision may have an impact on liability within the restaurant industry, including questions about whether franchisees or franchisors are liable in lawsuits. The case likewise raises questions about liability when contractors are involved.
in the case, the NLRB changed its test for what is required to establish joint-employer reliability. Traditionally, the test focused on wage and supervisory decisions, control and direct and immediate control. The elements were eased, broadening when joint-employer liability might be found. The new standard allows joint-employer liability when a company exercises indirect control over workers. If this rule stands, then multiple other parties beyond the direct employer may be liable for labor violations.
Many restaurants run into problems with their wages. While the federal minimum wage is set at $7.25 per hour, New Jersey’s minimum wage is $8.44 per hour. In Pennsylvania, the state’s minimum wage is $7.25 per hour, but there is a pending bill in the state’s House to raise it. Trump said during the early part of his campaign that he would be in support of increasing the federal minimum wage to $10 per hour, but the current political climate suggests that is unlikely, leaving it to the states to raise their own state minimums.
The U.S. Department of Labor published its final rule about overtime in early 2016, which would increase the annual salary threshold for administrative, executive and professional employees from $23,660 to $47,476. Under the rule, those employees who make less than the threshold amount would be eligible for overtime pay and minimum wage protections. While its effective date was supposed to be Dec. 1, 2016, a federal judge blocked it nationally in Nov. 2016 after 21 states filed a lawsuit stating that the new regulations were unconstitutional. Trump’s choice for his Secretary of Labor, Andy Puzder, is the former CEO of CKE Restaurant Holdings, which is the parent company of Hardee’s and Carl’s Jr. Under his governance, the Labor Department is unlikely to implement the rule as it stands and may either substantially revise it or scrap it.
Predictive scheduling is being considered in multiple states and cities. This would require employers to schedule most of the expected shifts and to post them publicly in advance. If employers ask workers to accommodate last-minute schedule changes, the employers would have to pay them extra compensation. A bill in New York about predictive scheduling would affect quick-service eateries, but it may later extend to other restaurants.
Under the federal tip-pooling rule, restaurants are not allowed to make waitstaff share their tips with back-of-the-house employees. An appeal of a ruling out of the Ninth Circuit Court of Appeals that upheld the tip-pooling rule is currently pending before the Supreme Court of the United States. It is likely that the current administration will oppose the rule because restaurants enjoy economic advantages by letting their back-of-the-house employees participate in the tip pools.
Wage disparity and the pay gap
In recent years, wage disparity between the genders and races has become a hot-button issue. Studies have demonstrated that significant gaps exist between the wages of men and women in restaurants and between minorities and whites as well. Employees are allowed to file complaints about unfair pay within 180 days after their employers’ pay decisions under the Lilly Ledbetter Fair Pay Act. Beginning on Sept. 30, 2017, the Equal Employment Opportunity Commission has indicated that it will require employers that have more than 100 employees to submit compensation reports.
LGBTQ workplace rights
In 2016, LGTBQ rights surged to the forefront with the right to bathroom use becoming a part of the national debate. The Supreme Court granted certiorari to a case that involved a transgender student in Virginia named Gavin Grimm who wanted to use the men’s restrooms at his school. When the Trump administration revoked the guidance that had been established by the Obama administration, the Supreme Court returned the case to the lower court in March 2017. The 4th Circuit Court of Appeals will hear the case this fall. While the case does not directly involve employment law, it may potentially have an effect on how the EEOC and the federal courts view discrimination against LGBTQ people if it is determined that discrimination against them falls under the category of prohibited sex discrimination.
Employment laws are constantly changing. The experienced team at Swartz Swidler constantly work to stay current on the law. If you’d like to know more about the rights that you have, contact us today to schedule your consultation.