capitoldas2Well, the Connecticut General Assembly ended earlier this week and, as predicted, it ended with a whimper and not a bang.  Many employment law proposals failed to receive votes, including those on minimum wage and Paid FMLA, leaving many employers (and the CBIA) breathing a bit of a sigh of relief.

I’ve previously recapped most of the bills here and here, so I’m only going to recap the session here in the interests of time.

  • The Governor is expected to sign a bill expanding the requirements for employers to provide reasonable accommodations to pregnant employees. Again, I’ve recapped the measure here but this is probably the most significant bill to come out of the session regarding employers.
  • There will be no minimum wage hike and the introduction of Paid FMLA failed to get enough votes this term.  There is little doubt that the split in the Senate along party lines slowed momentum down for what was going to be the Democrat party’s signature achievement this session.
  • Also not getting votes this session was a bill that would have prohibited many employers from running credit checks on prospective employees and a bill that would required employers to give advance notice to employees about their work shifts.
  • Another bill that would change whistleblower protections in Connecticut also failed to clear the House.

Some of the other technical changes, to workers compensation or unemployment compensation, offer up a mixed bag. I’ve covered them in a prior post.

A special session is still on the way and it’s possible that some measures will get plopped into an “implementer” bill for the budget like it did a few years ago.  But my gut tells me that the budget is unlike to be used this way given the significant financial issues in play.  Nonetheless, employers should continue to watch for any developments in this area until the special session is closed.

file0001835967537The Connecticut Supreme Court, in a unanimous decision that will be officially released April 4, 2017, has ruled that employers may not use the “tip credit” for pizza delivery drivers and therefore, the employees must be paid the standard minimum wage.

You can download the decision in Amaral Brothers, Inc. v. Department of Labor here.  The decision is no doubt a disappointment to employers who believe that the Connecticut Department of Labor’s regulations in this area far outstretch the plain language of the applicable wage/hour statute.

The case arises from a request by two Domino’s franchises for a “declaratory ruling” from the Connecticut Department of Labor (DOL) that delivery drivers are “persons, other than bartenders, who are employed in the hotel and restaurant industry, …who customarily and regularly receive gratuities.” The request arises from Conn. Gen. Stat. §31-60(b), which has been amended over the years.

Why would the employer make such a request? In doing so, the employer wanted to take advantage of the “tip credit”, in which employees are paid below the conventional minimum wage, but his or her salary is supplemented by tips from customers.

Originally, as noted by the employer’s brief to the Court: “The DOL denied Plaintiff’s Petition for the following stated reasons: (1) the regulations were valid because they served a remedial purpose, were time-tested and subject to judicial scrutiny…; and (2) the only act of “service” was handing the food to the customer at the customer’s door and so delivery drivers’ duties were not solely serving food as required under Regulations of Connecticut State Agencies § 31-62-E2(c). The DOL’s decision was that only employers of “service employees” as defined by the DOL could utilize the credit, and Plaintiff’s employees were not service employees.

A lower court upheld the DOL’s conclusions “agreeing that the regulations were ‘reasonable’, ‘time tested’, and had ‘received judicial scrutiny and legislative acquiescence’. The court also determined that the ‘minimum wage law should receive a liberal construction.'”  (You can also view the DOL’s brief to the Court here.)

The Connecticut Supreme Court upheld the Department of Labor’s interpretations here finding that the regulations issued by the agency were “not incompatible” with the enabling statute.  In doing so, the Court noted that this is a bit unusual because the employer was contending that the regulations were originally valid when issued, but repealed by implication when there was an amendment to the statute at issue.

The Court’s decision traced the origin of the tip credit in a portion of the decision that only lawyers will love. But then they get to the heart of the matter: “It was reasonable for the department to conclude that the legislature did not intend that employees such as delivery drivers, who have the potential to earn gratuities during only a small portion of their workday, would be subject to a reduction in their minimum wage with respect to time spent traveling to a customer’s home and other duties for which they do not earn gratuities.”

While the court’s decision directly implicates delivery drivers, it only impacts those employed directly by the employer (see also: UberEats, GrubHub etc.).  Nevertheless, in upholding the DOL’s interpretation here, the scope of who falls within the tip credit at restaurants is going to be further challenged in the courts.

Before employers make any further conclusions, Connecticut businesses should also be aware that the scope of the tip credit and of tip pooling is being debated at the federal level as well.  The National Restaurant Association has joined many others in asking the U.S. Supreme Court to hear a case on the subject. We should hear shortly whether the Court will accept such a case.

The Court’s decision is yet another reminder that restaurants in Connecticut should review the situations in which the tip credit is being utilized. Issues regarding tip pooling should be reviewed as well.  This case doesn’t answer all the questions that come up in the restaurant context. But in terms of figuring out the scope of the law, it helps to answer (albeit in a manner not helpful to employers overall) some outstanding questions.

capitoldasIt’s a challenge for employers to keep up with changes to employment laws. What’s the current status? What do I need to change?

So, here are four quick things you can look at right now to ensure that you are up to compliance in Connecticut.

  1. Connecticut increased the minimum wage effective January 1, 2017.  It’s now up to $10.10 per hour. Are all your employees now at that minimum wage?
  2. Connecticut’s new Fair Change Employment Law went into effect January 1, 2017.  That means that most employers are not allowed to ask about a prospective employee’s prior arrests, criminal charges or convictions on an initial employment application unless the employer is required to do so by state or federal law, or a bond is required for the position for which the applicant is seeking.  When did you last update your employment application? 
  3. Last summer, Connecticut updated it’s state family & medical leave law to mirror federal FMLA law that allows an employee to take a leave for a “qualifying exigency”.  Recall too that Connecticut allows employees to take leave in order to serve as an organ or bone marrow donor. When did you last update your FMLA policy?
  4. Effective October 1, 2016, employers may now offer the use of payroll cards to deliver wages so long as the employee “voluntary and express authorizes” the payment of wages by that method and the employer provides a “clear and conspicuous notice” to employees about the use of it.  Have you updated your notices and have your received authorizations from your employees on the use of payroll cards?

 

You might need a calculator
You might need a calculator

For yet another year, Connecticut’s minimum wage is on the increase.

Effective January 1, 2016, the Connecticut minimum wage will be raised to $9.60 per hour effective January 1, 2016.

Although the federal minimum wage is $7.25, Connecticut employers must pay the higher rate under state law. The updated wage and hour law poster, including the minimum wage rate for this year is available here.

This notice is required to be posted wherever covered workers are employed, and employers should make sure that the posting is up prior to January 1.

In addition, remember that the minimum wage will increase once again on January 1, 2017 to $10.10 per hour.  All of these changes were mandated as part of Public Act No. 14-1, which was passed in 2014.

Of course, the minimum wage isn’t applicable in all circumstances. In some limited areas, a sub-minimum wage can be used. And for waiters and bartenders, a still different minimum wage can be used too.

In any event, review your payroll now so whatever changes that need to be made can go into effect in a few weeks.

generalassemblyThe Connecticut General Assembly is winding down in the next eight days, but not before some very significant legislation gets a thumbs up or down.

As discussed before, the legislature has already passed a bill expanding an employee’s online privacy interests.  That bill was signed by the governor on May 19th.  It goes into effect October 1st.

Also passed was Senate Bill 963, which adds labor history to the topics that schools are encouraged to teach.  The bill still awaits the governor’s signature.

So, what’s still alive?

  • Senate Bill 1044, which will impose a tax on certain employers who fail to pay their employees $15 per hour.  (See also House Bill 6791, which also tax certain employers in other circumstances for the same failure to pay workers $15/hour.)
  • Senate Bill 428, which would create protections for interns to be free of harassment.
  • Senate Bill 914, which would create mandatory double damages penalties for employers in wage/hour cases.
  • House Bill 6789, which would both limit and broaden the circumstances under which an employer can require an employee or job applicant to consent to a credit report request.  It has already passed the House.
  • House Bill 6850, which would afford employees more opportunities to discuss their wages, beyond what is already contemplated by federal law.

There are others too but these seem to be the most high-profile ones at the moment.

Stay tuned!

When I made predictions/wishes for 2015 at the end of last year, I offered up one on what the Connecticut General Assembly might do:

My Prediction: We’ll see a new rule or two, but with all the mandates that have been passed in the last four years, I expect there to be more bluster from politicians, but that we’ll actually see a bit less interference when all is said and done — at least for now.

There still some time left in the legislative session, but I’m getting increasingly pessimistic on this one.

generalassemblyIndeed, if anything, it seems from the bills being proposed that even more legislation is on the horizon that could take Connecticut into places no state has gone before. (Cue the Star Trek theme.)

For employers, this should be a major cause for concern. Because if you think that the amount of regulations and wage pressures that the state has been placing has been overbearing, the bills being proposed suggest that you haven’t seen anything yet.

Let’s go through some of them:

Legislation backed by labor advocates this year seeks to fine big corporations like Wal-Mart $1 per hour for each employee paid $15 per hour or less. The fiscal note estimates that about 146,710 of the 743,328 employees who work for companies with at least 500 employees would be covered under the bill. The bill would result in a revenue gain to the state of up to $152.6 million in 2016 and $305.1 million in future years.

A similar bill is up for consideration in the House, reports to the CBIA.

  • Employers have often being paying unemployment taxes that seemingly go into an abyss. Indeed, already they pay some of the highest taxes in the nation in this area.  As my colleague, Henry Zaccardi pointed out during his testimony at the legislature, reforms are needed.  But we’ve seen this before and unfortunately, it seems unlikely that such reforms will be adopted which would make the trust funds more solvent.  As he testified:

I understand the need for a safety net like a UC Trust Fund, but when it goes broke and employers are leaving the state, we need to do a better job of balancing [the methods we use to keep the safety net from breaking].

There are other bills out there too that would also push the influence of labor unions into the school curriculum as well.  Senate Bill 910 is back again, and would require schools to teach about “worker history and law, including organized labor, the collective bargaining process and existing legal protections in the workplace”.

I’ve also heard rumblings, as I’ve noted before, about a proposed bill being floated that would make substantial changes to the CHRO process.

So much for 2015 being a quiet year for employers. Will any or all of these get passed? Stay tuned. The next two months promise to be a wild ride.

On New Year’s Day, I had the opportunity to launch model rockets with my son on a gorgeous (but very cold) day.

As it turns out, it was also a windy day.  We discovered this through launching two rockets super high — only to see them carried away deep into the woods a mile away.

But it was a good way to start the year. So with that image in your mind, it’s also time to go back over the minimum wage in Connecticut. We’ve seen increases over the last few years, and this year has yet another raise.

So, as of yesterday, the minimum wage has blasted forward another 45 cents to $9.15 per hour. For restaurant workers who are eligible to receive tips, there was also an increase to $5.78 per hour.

The minimum wage will continue to increase. On January 1, 2016, it will increase to $9.60 per hour. And finally on January 1, 2017, it will max out (at least for now) at $10.10 per hour.

Oh, Mystic Pizza!

In Connecticut, we all know that Mystic Pizza isn’t the best pizza in the state.  (I’m not even going to get into the argument about Pepe’s, Sally’s, or Modern in New Haven.)  One of my favorites is actually Harry’s Bishops Corner.

But Mystic Pizza still has a place in many of our hearts in the state due to a film in 1988 of the same name. After all, how many movies before it were filmed in Connecticut?  (Turns out there are 81 films total. Who knew?)

And better still, it starred Julia Roberts, right before she really hit it big in Pretty Woman.  And so, Julia Roberts, became one of us.

Sure, when you visited the real Mystic Pizza, it was nothing like the romanticized version in the movie. But still, it was MYSTIC PIZZA!

Alas, I was distressed to read that the famous pizza place was recently cited for wage & hour violations. Specifically, 110 employees will be paid a total of $105,000 because, the state Department of Labor found, they were paid less than minimum wage or did not receive overtime.

Unfortunately, it’s a scenario that gets played out too often and could easily be remedied.

But perhaps, I should not be too distressed. Maybe Julia Roberts can star in a sequel about an owner who takes over Mystic Pizza and hires a prominent employment law attorney to help make the place a big success again.

Did I mention I’m available?

My kids are at overnight camp this week and of course, my brain never stops thinking about cute employment law lessons that can be gleaned from everyday experiences.

So, you may wonder: do camp counselors who, after all, spend 24/7 with the kids, have to be paid minimum wage? And what about babysitters that you may employ over the summer?

If you look at the state law itself (Conn. Gen. Stat. Sec. 31-60), it seems to require minimum wage:

Any employer who pays or agrees to pay to an employee less than the minimum fair wage or overtime wage shall be deemed in violation of the provisions of this part.

But one of the lessons you learn in law school is that just because the legislature uses the word “employee”, it may not mean what you think it means.

In other words: check the definition.

And sure enough, when you look at the definition of employee in Connecticut, it specifically excludes whole classes of people.

“Employee” means any individual employed or permitted to work by an employer but shall not include any individual employed in camps or resorts which are open no more than six months of the year … or any individual engaged in baby sitting ….

So, in some circumstances, those employees of camps aren’t really employees under state wage & hour law. (Federal law has an exemption as well, though with different requirements.)

Thus, for camps, a whole other set of requierments may apply.  (For any camps out there, before you start changing all your rules, please note that there are lots of other regulations that may apply, as noted in this detailed summary by the American Camp Association. Seek your appropriate legal counsel.)

But for the rest of us, it may be summer, but there are always lessons you can learn — even from camp.

Pizza workers may be covered.

This week, one of Connecticut’s own, Representative Rosa DeLauro introduced the “Schedules That Work Act” bill in Congress.  It would ostensibly help part-time workers secure stable schedules.

It would, among other things “ensure employees get two weeks notice about their work schedules, as well as extra pay to compensate for last minute changes”, as summed up by The New York Times.

I’m not going to spend time detailing all the nuances of the bill because, well, it has virtually no chance at all of getting passed in the gridlock that is Washington, D.C.  (If you want further details, the National Women’s Law Center has a good one here.)

One of the bill’s proposals, however, would establish a “reporting time pay requirement” which would entitle certain restaurant and retail workers to a minimum of four hours of pay even if the employer wanted to send them home early during a shift.

But what’s been missing in the discussion so far in the discussion is that Connecticut has long since had rules in place in the restaurant and mercantile industries that mandate something similar.  I first covered these rules back in 2011.

The problem for employers is that you won’t find those rules in the law itself.  Instead, you will find them in certain “wage orders” issued by the Connecticut Department of Labor. Thankfully, those orders are now available online.  (The mercantile trade order is here and the restaurant order is here.)

Both orders were updated in the last few months to take into account the minimum wage increases too.

(Speaking of minimum wage for a moment, did you check out Funny or Die’s Mary Poppins “quitting” because of her pay? Very well done.)

For restaurant workers, a two hour minimum rule (in 31-62-E1 (b)) applies, unless notice is given the day before and applies to the minimum rate, not the regular work rate.

An employee regularly reporting for work, unless given adequate notice the day before to the contrary, or any employee called for work in any day shall be assured a minimum of two hours’ earnings at not less than the minimum rate if the employee is able and willing to work for that length of time. If the employee is either unwilling or unable to work the number of hours necessary to insure the two-hour guarantee, a statement signed by the employee in support of this situation must be on file as a part of the employer’s records.

For mercantile workers, a four hour minimum rule (in 31-62-D2 (d)) applies, and its phrased slightly differently. Those employees get their “regular rate”.

An employee, who by request or permission of the employer, reports for duty on any day whether or not assigned to actual work shall be compensated for a minimum of four hours earnings at his regular rate. In instances of regularly scheduled employment of less than four hours as mutually agreed in writing between employer and employee, and approved by the Labor Department, this provision may be waived provided the minimum daily pay in every instance shall be at least twice the applicable minimum hourly rate.

What’s the practical application of this rule? Suppose you’re a retail store and have an employee who’s shift that day is from 1 p.m. to 9 p.m.  At 3 p.m., you realize that you have more than enough workers to cover the shift and send the employee home “early”.  Under Connecticut’s rule, that employee is entitled to a minimum of four hours of pay, even though they only “worked” for two.

And one more thing: For restaurant workers, the order also provides that on the 7th consecutive day at work , the employee is entitled to pay at time and a half.

So, ignore the headlines for the time being. Instead, use this summer to catch up on the rules that you may not have known about.