Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in Law360 Employment Authority, in “What's on the Wage and Hour Menu for Restaurants,” by Daniela Porat. (Read the full version – subscription required.)

Following is an excerpt:

From predictive scheduling laws to a potential overhaul of federal regulations governing tipped workers' wages, restaurants are facing myriad compliance challenges that are exacerbated by the COVID-19 pandemic and what employers view as a tight labor market, attorneys told Law360.

The coronavirus pandemic and related economic upheaval have put a lot of pressure on restaurants when it comes to wages, said Paul DeCamp, a former administrator for the U.S. Department of Labor Wage and Hour Division and a member of management-side firm Epstein Becker Green.

"That creates real challenges for a business that is trying to get by in an environment where customer flow is down, business volume is down and now apparently the wages required to get workers to show up have gone way up," DeCamp said. "That has been a real business challenge. It's not a legal challenge exactly, although it's caused in part by some laws."

Here, Law360 explores the wage and hour issues at the forefront of the restaurant industry.

Tip Credit Landscape

In June, the DOL proposed changes to the circumstances in which employers can pay gratuities-earning workers as little as $2.13 per hour as long as tips carry them to the standard federal minimum wage, or $7.25. …

The change would set a new standard requiring employers to pay the full minimum wage to any worker who spends more than 30 minutes of uninterrupted time on side work that "directly supports" tip-producing activity.

The regulations would also codify the 80-20 rule, which requires standard minimum wage for a worker who spends more than 20% of their time on side tasks that aren't directly related to customer service, such as setting up before a shift or cleaning up afterward.

Some states have done away with a tip credit — an approach that might create unintended disparities, DeCamp said.

In those states, he said, servers end up getting overcompensated compared with their colleagues in the back of the house because servers continue to get tips on top of their wages.

"I don't think anybody who was leading the charge to eliminate the tip credit in those states was trying to hurt the kitchen workers," he said. "But the way that restaurants operate, it really makes it a challenge." …

Predictive Scheduling and Unpredictable Work

Cities and states across the country have both embraced and shunned predictive scheduling laws, which generally require certain employers, such as retailers or restaurants, to give advance notice to workers of their schedules.

While these laws protect workers from the difficulties of having their schedules change on short notice, DeCamp said they present significant operational challenges for restaurants.

The day-to-day needs of restaurants tend to fluctuate wildly within the predictive scheduling notice windows because of circumstances such as weather changes or, in the case of a sports bar, for example, whether the local team is in the playoffs, DeCamp said.

"It leaves businesses unable to pivot to address changes in the business volume that may depend on events that happened within that window called for by the predictive scheduling," he said.


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