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A recent news release in Amarillo, Texas, illustrates what can happen if employers do not carefully monitor and observe DOL regulations on how they are paying tipped employees.
The Big Texan Finds Itself In A Wage And Hour Investigation
The Big Texan Steak Ranch in Amarillo, which has a national reputation, has agreed to pay $650,000 in minimum wage back wages and $150,000 in liquidated damages to 279 current and former wait staff following an investigation by the U.S. Department of Labor's Wage and Hour Division. The DOL found violations of the Fair Labor Standards Act's minimum wage and record-keeping provisions arising from a tip pooling arrangement by the restaurant.
There’s a new issue for employers to struggle with now. Early this summer the American Medical Association (AMA) officially determined that obesity is a disease. That leads to the inevitable next question for employers subject to the Americans with Disabilities Act (ADA) (those with 15 or more employees): Is obesity a disability, considering all of the ramifications that flow from that possibility? Then all shades of other questions pop up, such as “how overweight must a person be to qualify as ‘obese’”; “how does an employer determine whether an employee is obese enough to require accommodations in job performance”; and “what accommodations might be required to allow him or her to perform the essential functions of the job?”
Texas Court Finds A Real Independent Contractor
Finally, a victory for an employer on an independent contractor worker classification! This usually is a losing battle for employers who try to classify workers as independent contractors instead of employees, thus avoiding payment of overtime, minimum wage, withholding and social security taxes, and the like. Many employers have been subjected to Department of Labor audits and private collective action lawsuits (or Texas Workforce Commission or IRS audits) over this issue and have lost.
Recently, however, the Federal District Court for the Southern District of Texas held that gate attendants who worked with a prominent provider of oilfield gate attendant services correctly were classified as independent contractors under the FLSA. Gate Guard Servs., L.P. v. Solis, 2013 U.S. Dist. LEXIS 20156 (S.D. Tex. Feb. 13, 2013). This case is a primer for employers on what it takes to meet the heavy burden of supporting such classification of a worker.