Six months after a little-noticed bill passed unanimously by the General Assembly (and was then vetoed by Governor Lamont), a new compromise measure passed yesterday in a special session.  For a full article, check out CT Mirror’s coverage here or CTNewsJunkie here.

The bill uses some of the same concepts that had been previously discussed, particularly at a public hearing in October. But the bill tries to address the issue in a more nuanced way. Perhaps the biggest concession that was made is that existing class actions on wage and hour laws challenging the so-called “dual duties” regulation may proceed though with limits.

You can read the bill here. Governor Lamont has indicated that he will sign the measure. 

Here are the other key provisions:

  • The biggest takeaway is that the bill requires the Department of Labor to revisit a 1950 regulation that has been interpreted by some as requiring time that a server spends on “non-service duties” be segregated.  Despite this regulation, the DOL had guidance that many restaurants had relied upon that said that segregation wasn’t necessary if less than 20 percent of the servers time was on “non-service duties”.The DOL must propose a “notice of intent” to modify the regulations by April 1, 2020 and, in making its proposal “shall consult with representatives of the restaurant industry, restaurant employees, service employees and other interested stakeholders prior to posting such notice.”  The DOL must also consider other state and federal guidance on the subject too.
  • As noted in the OLR’s bill review:  “The bill removes the court’s authority to award attorney’s fees in civil actions alleging wages owed under the current dual duties regulation if the employer had a good faith belief that the wages paid were legal. It specifies that a good-faith belief can include reasonable reliance on written DOL guidance. It does not change the award amounts and attorney’s fees permitted for cases that do not involve a good-faith belief by the employer.
  • The bill also places key restrictions on class action lawsuits including both current and future claims. Specifically,
    “No person may be authorized by a court to sue for the benefit of other alleged similarly situated persons in a case brought for violations of section 31-62-E4 of the regulations of Connecticut state agencies, unless such person, in addition to satisfying any judicial rules of practice governing class action certifications, demonstrates to the court, under the appropriate burden of proof, that the defendant is liable to all individual proposed class members because all such members (A) performed nonservice duties while employed by the defendant, for more than a de minimis amount of time, that were not incidental to service duties, and (B) were not properly compensated by the defendant for some portion of their nonservice duties in accordance with section 31-62-E4 of the regulations of Connecticut state agencies.”
  • Importantly, within 30 days after adoption of the new regulations, per an amendment to the bill that was also passed, the DOL will start conducting “random wage and hour audits of tipped workers” in at least 75 restaurants and prepare a report within a year to the legislature’s Labor committee.   The amendment also allocates funds to hire three more investigators.

For restaurants, the bill is a mixed bag.  Those involved with existing litigation will still have to address those claims in a judicial forum; however, the bill provides a needed “reset” to the existing rules.

It may not be the perfect solution that restaurants wanted after slipping the provision in unnoticed earlier. But it is a compromise that will pay dividends in the future without as much likelihood of a repeal too.  Sometimes you take a step back, to take two steps forward.