Legal Knowledge Center

The Georgia Restaurant Association’s top-notch team of member attorneys take the guesswork out of the multitude of laws and regulations affecting restaurants. Many resources, including a library of articles on legal issues are available to members only

Also, the National Restaurant Association offers a Legal Problem Solver with easy-to-understand summaries of key federal laws and regulations available to GRA/NRA members for free online.
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  • 23 May 2014 8:11 AM | Anonymous member (Administrator)
    By: Eric Magnus, Shareholder
    Jackson Lewis P.C.


    Many organizations use interns, especially student interns, during the summer months. While interns often are excited for the opportunity and agree to provide services for no pay, businesses must consider the wage and hour risks of such arrangements. Simply put, an individual’s agreement to work in an unpaid position now does not prevent him or her from seeking alleged unpaid wages later. Unless specific conditions are met, a business usually is expected to provide an intern with at least minimum wage for all hours worked and overtime pay, if applicable. Federal and state departments of labor and private attorneys have become more aggressive in pursuing pay for interns in recent years, with several well-publicized collective/class actions filed during the past year. Employers with internship programs must analyze carefully the structure of their programs and the work performed by interns if they want to ensure such positions are unpaid.

    The federal Fair Labor Standards Act (FLSA) defines an employee broadly as “any individual employed by an employer.” The U.S. Department of Labor, consistent with U.S. Supreme Court precedent, recognizes that the FLSA payment obligations do not apply to individuals who are part of programs that provide training for their own educational benefit if the training meets the following six criteria (see U.S. Department of Labor Fact Sheet #71, available at http://www.dol.gov/whd/regs/compliance/whdfs71.pdf:
    • The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
    • The internship is for the benefit of the intern;
    • The intern does not displace a regular employee, but works under close observation of existing staff;
    • The employer that provides the training derives no immediate advantage from the activities of the intern and, on occasion, the employer’s operations may actually be impeded;
    • The intern is not necessarily entitled to a job at the completion of the internship; and
    • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
    State departments of labor standards often are similar, but not necessarily identical. For example, in some cases, school credit for an internship is a defense to wage and hour claims.
    While courts have not universally adopted the USDOL’s standard and have focused their analysis in some cases on the “primary benefit” of the internship, the USDOL standard is a good reference for internal reviews.

    Recommended Employer Actions
    Employers considering using interns must review carefully each aspect of the internship program and apply the DOL’s factors and any applicable state factors to the contemplated program, as well as considering the primary benefit of the internship. If interns perform productive work, especially if such work is not akin to the work product generated in an educational setting, the safest course is to pay minimum wage (and overtime, as required) for all hours worked. If the program's goal is educational, businesses should ensure that line managers understand the rules and manage the relationship consistent with educational goals and the above six factors. Actions such as rotating interns from department to department can help demonstrate an educational goal. Similarly, a business should not decrease regular staffing during periods of internships as such reduced staffing can support an argument the interns are doing the work normally performed by regular employees. Further, if the program is unpaid, the business should strongly consider asking interns to sign an agreement acknowledging the educational nature of the program, the program is unpaid, and the internship is not a direct route to employment. Additionally, if the employer provides a stipend, the business should ensure the stipend covers or comes close to covering minimum wage obligations and the phrasing of the stipend does not preclude the employer from defending a claim for alleged unpaid wages. Finally, if the employer decides after legal analysis to treat interns as unpaid, a best practice is to limit hours to reduce potential liabilities and help dispel any notion that the intern is being taken advantage of by the business.
    A determination of employee status has many implications. In addition to being entitled to withheld minimum wage and overtime pay, an intern found to be misclassified could be entitled to other damages, including “lost” employee benefits, meal and rest periods, and penalties.
    Even longstanding employment practices can have significant wage and hour considerations. Unpaid internships are just one example. Jackson Lewis attorneys are available to discuss this and other workplace law issues. 

    Please contact Eric Magnus at 404-525-8200 for advice on particular situations.
  • 09 May 2014 9:57 AM | Anonymous member (Administrator)

    A new law in Georgia protects employers from negligent hiring and retention claims by creating a presumption of “due care” for hiring and employing individuals with criminal backgrounds who have received a Program and Treatment Completion Certificate from the Department of Corrections or a grant of pardon from the State Board of Pardons and Parole. Governor Nathan Deal signed Senate Bill 365 on April 13, 2014. The law is due to take effect on July 1, 2014, however, no timeline has been released for the Department of Corrections to implement the new certificate program.

    While a presumption of “due care” is established if the individual meets the requirements described above, the presumption may be rebutted by evidence demonstrating the employer knew or should have known relevant information to rebut the presumption that extended beyond the scope of the certificate or pardon. Because of this exception, Employers should continue to assess applicants carefully.

    This law is the third part of Deal’s criminal justice reform he has been working on since 2012 with the General Assembly and the Criminal Justice Reform Council. Deal said in a statement, “[t]he incentives and re-entry programs included in this legislation are cost-effective strategies that will increase the number of former offenders returning to the workforce and supporting their families."

    If you have any questions about the Georgia law, please contact the Jackson Lewis attorney with whom you regularly work or Erin Krinsky, at erin.krinsky@jacksonlewis.com or (404) 525-8200, in our Atlanta office.

  • 02 May 2014 1:47 PM | Anonymous member (Administrator)

    By: Alisa P. Cleek and Douglas J. Miller
    Elarbee, Thompson, Sapp & Wilson


    It is no secret that today’s restaurants face stiff competition.  New chefs, constantly-changing dining trends, a “foodie” culture, and rising costs all threaten the long-term success and viability of virtually every dining establishment.  What if we told you, however, that one of the biggest risks facing your restaurant does not relate to these issues, but instead to the possible departure of your restaurant’s employees and confidential information?

    Imagine this scenario: your top chef, who you have groomed for years, to whom you have given your every secret recipe, and who has a meaningful relationship with all of your regular diners, tells you out of the blue that he is leaving your kitchen.  Not only that, you soon hear rumors that he is opening his own restaurant down the street, is taking several of your best employees with him, and will be serving a similar style of cuisine and beverage menu.  Your mind races and your heart skips a beat, as you are clearly (and understandably) concerned about the continued viability and success of your restaurant.  STOP.  Before additional panic sets in, you can be comforted by the fact that there are proactive and protective measures that you and your restaurant can take right now to help guard against this uncomfortable and frightening situation, several of which are outlined below.

    One of the best tools that your restaurant can utilize to protect itself against the unnerving situation described above is to have your key employees sign a restrictive covenant agreement, which is an agreement that places certain limitations on an employee both during and for a period after his/her employment ends.  One of the benefits of a well-drafted restrictive covenant agreement is that, if it is abided by the parties that sign it, the agreement can prevent potentially costly, time-consuming, and distracting litigation.  If, however, litigation does become necessary to enforce the restrictive covenant agreement, the outcome of winning the subsequent unfair competition lawsuit can include the following: (1) you may receive restitution for the money you lost due to your former employee’s unfair competition activities, and you may also be awarded any of his/her illegal profits; and (2) if your restaurant presents sufficient evidence showing a probability that your former employee will commit future violations of the unfair competition laws and/or his/her restrictive covenant agreement, an injunction may be issued ordering your former employee to curtail his/her unfair competition activities.

      

    Approximately three years ago, the State of Georgia substantially altered its public policy on restrictive covenants, and its new Restrictive Covenants Act (O.C.G.A §§ 13-8-50 et seq.) makes it significantly easier for employers to enforce restrictive covenants against former employees than was permitted by prior Georgia law.  While some may reasonably argue that requiring creativity-driven employees like chefs to sign such agreements will drive key talent to other establishments, some restaurants are in fact beginning to take advantage of Georgia’s new stance on restrictive covenants.

     

    By having your key employees (chefs, bartenders, managers, etc.) sign a well-drafted restrictive covenant agreement, you can, for example, prohibit them from opening a competing restaurant within a certain geographic region and for a specific period of time, restrict them from recruiting and hiring away your other employees to their new venture, keep them from soliciting business from your regular customers, and forbid them from disclosing or using your restaurant’s most secret and confidential information.  Importantly, these agreements can be hand-tailored to match a wide variety of restaurants and staff, including your own.


    Restrictive covenant agreements are not the only way to protect your restaurant from unfair competition, however.  With respect to your restaurant’s confidential information, which may include recipes, cooking techniques, food and alcohol sources, customer lists, and financial information, your restaurant must take internal measures to protect the confidentiality of this information.  These measures may include, for example, only granting access to this information to those employees with a need to know it and for the sole purpose of conducting the business of your restaurant.  Computer passwords, locked office spaces, and even combination safes should also be deployed, as necessary, to safeguard these secrets.  Additionally, when your employees leave your restaurant’s employment, you should take steps to make sure that they are not taking any of this confidential information with them, whether in hard-copy or electronic form.

    Evidencing the growing impact of this issue, some restaurants have sought relief after losing their key chefs or other employees, accusing them of leaving to create competitive dining establishments founded on their prior restaurants’ recipes.  Recent cases include 50 Eggs Rest. Co., LLC v. Chef Bee et al., No. 13-027964-CA-01 (Fla. Cir. Ct. Aug. 27, 2013) and Torchy’s Tacos v. Mario DeJesus et al., No. 2013-34135 (Tex. Dist. Ct. Aug. 19, 2013).  In each of these cases, the restaurant proprietor claimed that departing employees ransacked the restaurant’s recipe boxes, thereby engaging in trade secret misappropriation and unfair competition by using the recipes to establish new, competitive restaurants.  In Torchy’s Tacos, for example, the restaurant claimed that a former employee stole its “Taco Bible” – a document containing a start-to-finish recipe and process guide for each of its food items – and used it to start his own taqueria.

    If not handled properly, unfair competition issues can have a devastating impact on your restaurant; thus, time spent reviewing how to protect your restaurant, customers, employees, and confidential information from unfair competition is time well spent.  If you want to know more about how to protect your restaurant from these and other unfair competition issues, please contact Alisa Cleek or Douglas Miller at cleek@elarbeethompson.com or miller@elarbeethompson.com.

  • 09 Apr 2014 8:07 AM | Anonymous member (Administrator)
    By Charles H. Kuck, Managing Partner
    Kuck Immigration Partners LLC

    Although we are in the midst of H-1B hiring season, not all of these H-1B workers will be successful in their new jobs. We are frequently asked what obligation does an employer have when it terminates a foreign national employee like an H-1B visa holder, and what options are available to the foreign national employee if he is terminated. While this is general guidance to employers in dealing with immigration matters during the downsizing process, employers terminating foreign employees should also consider arranging for immigration counsel to advise foreign employees on the consequences of termination as one of the services provided to workers being terminated. There are many myths surrounding the termination of H-1B and other non-immigrant workers, and it is very important to understand the employers obligation, and to dispel the myths for the now former foreign worker employee.

    The foreign national employees referred to here do not include lawful permanent residents or U.S. citizens. Foreign national non-immigrant workers usually fall under the H-1B, L, E, O, and TN temporary work visa categories. The most common non-immigrant work visa, H-1B, is used for an “alien who is coming to perform services in a specialty occupation”. L visas are used for intra-company transferees that enter the U.S. to render services “in a capacity that is managerial, executive, or involves specialized knowledge. E visas are used for “treaty traders and investors” as well as Australian specialty occupation workers. O-1 visas are used for foreign nationals who can demonstrate the sustained national or international acclaim and recognition for achievements in the science, education, business or athletics. TN visas are used for Canadian and Mexican citizens to engage in business activities at a professional level as listed in the North American Free Trade Agreement.

    Non-immigrant work visas are generally issued for the specific employment with a particular employer. A foreign employee is authorized to remain in the United States as long as they are employed with the particular employer noted in the visa application. If the foreign employees are laid off, they immediately lose their visa status, and must immediately pursue one of four options outlined below.

    The immigration laws define a “lay off” as an action taken by an employer to cause the loss of a worker’s employment. A lay off does not include:
    • Loss of employment for inadequate performance;
    • A loss of employment for violation of workplace rules;
    • Voluntary departure or retirement;
    • The expiration of an employment grant or contract.
    But, a "termination" can include all of these things, and other reasons for terminating an employee.

    In case of either a "lay off" or a "termination" the employer must comply with the affirmative duties under immigration law with respect to those foreign workers. For most employment-related visa types, the employer has an affirmative responsibility to notify the U.S. Citizenship and Immigration Service (USCIS) Service Center which approved the petition underlying the foreign national’s visa, when terminating a foreign worker’s employment. The employer’s salary payment obligation for H-1B visa holders under the immigration law ONLY ends when there is a bona-fide termination of employment AND the employer also notifies the USCIS. The confirmed written notice to the USICS fulfills the requirements for bona-fide termination of employment.

    These affirmative responsibilities are particularly important because employers that do not comply with these obligations violate the immigration rules and are subject to various penalties, including back wages, even if the employee is no longer working for the company under a voluntary separation.. We include some brief explanations of the affirmative responsibilities employers incur when laying off foreign national employees:

    Laying off H-1B visa holders

    The employer must offer to provide the H-1B workers return transportation to their home country at the employer’s expense. This is an airfare cost only, and only for the foreign national employee. It is not for his spouse, children, home furnishing or dog.

    The employer must notify the USCIS of the termination of foreign workers’ employment

    Laying off other non immigrant foreign workers

    The employer must notify the USCIS of the termination of foreign workers’ employment

    Options for Terminated Employees

    The employer should also ensure that the foreign national worker understands his or her options upon termination. Essentially, there exist four options in most cases for the foreign national employee:
    • The employee can leave the United States immediately. Remember, there is no grace period currently in place for any non-immigrant work visa (H, L, E, O, TN) unless the employee has completed the fully authorized term of employment;
    • The employee can file for a change of status to visitor visa status (B-2), with proof of intended departure date, verification of support pending departure, and a valid reason for remaining (e.g., packing household goods, etc.). This application for change of status to visitor should occur prior to the expiration of any time period of severance, and is best filed while the employee is still employed. This request to remain in the U.S. as a Visitor can be for up to six (6) months;
    • The employee can file to change employers and remain in that visa status. This means, obviously, that the employee must already have an offer of employment from another employer. The same process is in place that obtained the current non-immigrant status for the employee. The employee must also file this change of employer petition while still in lawful status (e.g. during a severance period or while still employed); and
    • The employee can enroll in or return to school as an F-1 Visa holder. This means the employee enrolls in a university to seek a degree, typically a higher degree, and seeks to change status to that of a student visa holder (F-1). Obviously, there are serious costs associated with this option, as the employee must pay tuition and related expenses, and typically will not be allowed to work, unless the employee enrolls in a degree program that allows Curricular Practical Training (CPT). Again, this change of status petition must be filed while the employee is still “in status,” as noted above.
    Layoffs and terminations are difficult for all parties involved. Properly managed, both the employer and employee can come through this situation fully protected and compliant with all federal immigration laws. If you would like further information about specific case scenarios or situations, please call our office or email us at ckuck@immigration.net to speak to one of experienced immigration attorneys.
  • 28 Mar 2014 11:08 AM | Anonymous member (Administrator)
    By: Justin R. Barnes
    Jackson Lewis P.C.


    What do you do when a patron walks into your restaurant with a 150 pound dog in tow? Do you automatically point to the sign in your window that says “NO DOGS ALLOWED” and politely escort them and their furry friend out the door? The short answer is no, you should not have a blanket policy that prohibits all animals in your restaurant regardless of circumstances. Federal regulations under the Americans with Disabilities Act (“ADA”) require all public accommodations (including restaurants) to modify their policies to permit the use of a service animal by an individual with a disability. Restaurants must permit individuals with disabilities to be accompanied by their service animals in all areas of the restaurant where other patrons are allowed to go.*

    That being said, federal regulations do not require you to turn your restaurant into an off leash dog park. There are limits to the access that is required by the ADA regulations governing service animals. For example, public accommodations can refuse access to a service animal when the service animal poses a direct threat to the health or safety of others. In addition, regulations permit accommodations to ask an individual with a disability to remove a service animal from the premises if the animal is out of control or if the animal is not housebroken. If you do ask the individual to remove the service animal from the premises for a lawful reason, you should nevertheless give the individual the option to obtain services without having the service animal on the premises.

    Here are some practical tips you can follow to comply with federal regulations while balancing the interests of maintaining a clean, safe, and controlled restaurant:
    1. You can prohibit barking or aggressive behavior.
    2. Train your staff to properly deal with patrons with service animals.
    3. You can require individuals using service animals to use a harness or leash on the service animal, unless the handler is unable because of a disability to use a harness or leash, or if use of a harness or leash would interfere with the service animal's safe, effective performance.
    4. You should not ask about the nature or extent of a person's disability or demand documentation that the animal is qualified as a service animal, but you may ask if the animal is required because of a disability and what task the animal has been trained to perform (unless it is readily apparent that an animal is trained to do work or perform tasks for an individual with a disability).
    5. You should not ask or require an individual with a disability to pay a surcharge, even if people accompanied by pets are required to pay fees, or to comply with other requirements generally not applicable to people without pets. You may, however, charge an individual with a disability for damage caused by his or her service animal if you normally charge other patrons for the damage they cause to the premises.
    *Georgia law also provides that individuals with disabilities have the right to be accompanied by a service dog in any public accommodation. Because Georgia courts have held that this law does not provide a private cause of action, however, Georgia restaurants should focus primarily on ensuring compliance with the federal requirements under the ADA.
  • 24 Mar 2014 9:41 AM | Anonymous member (Administrator)
    By Bryan A. Stillwagon | Attorney
    SHERMAN & HOWARD L.L.C.


    Restaurants across the country are facing class or “collective actions” brought by disgruntled delivery workers claiming their current and former employers underpaid them. Delivery workers fall into a murky - and potentially risky - area of the Fair Labor Standards Act (“FLSA”), which establishes the rules employers must follow when paying employees. Due to the nature of the job, delivery workers present unique management challenges for employers. The following suggestions are intended to help minimize legal risk if your company uses delivery workers.
    • Maintain accurate records of employees’ hours and tips. Keeping track of employees’ wage and hour data is the employer’s responsibility. Failing to do so can put the employer at a great disadvantage in the event of an employee lawsuit. If an employee claims that s/he worked a certain number of hours for which s/he was not paid, the burden falls on the employer to refute those claims with its own data. Employers must ensure they not only have, but enforce, time-keeping policies that include reliable methods of tracking tips earned and hours worked. If the delivery workers are tipped employees, the employer may pay them less than minimum wage in anticipation of their receiving tips. Before taking the “tip credit,” however, employers must track the employee’s tips to ensure s/he is earning enough to meet or exceed the minimum wage. It is the employer’s responsibility to obtain this detailed information from the delivery workers.
    • Limit non-tipped activities. Employers may take a tip credit for time in which tipped employees perform duties related to the tipped occupation, even though those duties (e.g., a waiter rolling silverware) are not directed toward producing tips. The Department of Labor states, however, that where tipped employees spend more than 20% of their time performing non-tipped work, such as general preparation or maintenance, the employer may not take a tip credit for such duties. For example, a pizza delivery driver should not spend more than 20% of his time folding pizza boxes or preparing other delivery materials, or the employer will not be able to take a tip credit for the employee’s additional, non-tipped work.
    • Ensure proper reimbursement for expenses. Expenditures for delivery workers are different than those for in-restaurant employees. Whether the expense is for a company uniform, gas and mileage for a personal vehicle, use of a personal bicycle, or special clothing required for working in the elements, an employee risks falling below minimum wage if s/he is not properly reimbursed for those expenses.
  • 12 Mar 2014 12:57 PM | Anonymous member (Administrator)
    Source: Law360, New York
    By Ben James

    (March 12, 2014, 7:54 PM ET) -- The Obama administration's anticipated efforts to change U.S. Department of Labor regulations to extend overtime pay rules to millions of workers currently considered exempt will face a groundswell of opposition from employers, management-side lawyers say, calling the potential changes an “ambush” and warning that they could be devastating for some restaurants and retailers.

    On Thursday, President Barack Obama will direct the Department of Labor undefined which has the authority to define the exceptions to federal overtime requirements through regulation undefined to strengthen overtime pay protections, a White House official announced Wednesday. Lawyers say this could be a harbinger of a lengthy rulemaking process that brings a slew of workers currently considered exempt within the scope of the FLSA's overtime requirements.

    Worker advocates saw benefits in potential changes to overtime regulations, but employer-side attorneys warned the move could increase litigation and hurt businesses, particularly in the restaurant and retail sectors, without conferring much of a benefit to workers.

    If the push to expand the Fair Labor Standards Act's overtime protections proceeds as anticipated, it will generate impassioned opposition from employers and potential congressional action aimed at thwarting the changes, lawyers said.

    “This tees up a pretty significant political battle because of what they appear to be trying to do. It sounds like the changes are designed to reduce the number of employees who have exempt status. That's a big deal,” said Paul DeCamp, former head of the DOL's Wage and Hour Division and leader of Jackson Lewis PC's wage and hour practice.

    “In the abstract, it sounds great to say: Hey, why don't we give all these people overtime so they can make more money? But the reality is that there's no free lunch,” he said.

    A push to change overtime regulations wouldn't be unprecedented. The DOL changed FLSA overtime rules in 2004 undefined a “tough job” that took more than two years, noted Tammy McCutchen, a Littler Mendelson PC shareholder who served as administrator of the DOL Wage and Hour Division from 2001-04.

    Even if the DOL begins revisiting the overtime regulations immediately, it could take a year undefined and probably longer undefined for changes to wind their way through its rulemaking process and take final effect, lawyers said.

    Recently, the conventional wisdom has been that the DOL was focused primarily on independent contractor versus employee misclassification, according to McCutchen, who said changes to the overtime regulations hadn't been listed on the DOL's agenda.

    “Its an ambush,” McCutchen said. “This is a surprise to everybody, at least on the employer side.”

    Specific changes that might be on the table include raising the threshold for invoking white collar exemptions under the FLSA, which currently require a worker to be paid a salary of at least $455 per week.

    Higher figures might make sense in places such as New York and California, which already have their own elevated thresholds of $640 and $600 per week, but they would threaten jobs and the viability of businesses if implemented in rural areas in the Midwest or the South, said McCutchen.

    Another change lawyers said might be in the cards concerns the executive employee exemption, which requires that the exempt employee's “primary duty” be managing.

    Setting a fixed percentage of an employee's work that has to be devoted to managerial tasks undefined like California's rule that more than one-half of an exempt employee's time has to be devoted to exempt work undefined could have a “devastating” impact in the retail and restaurant sectors, where managers frequently step in and handle nonexempt tasks when needed, said McCutchen.

    “I think the Obama administration wants federal law to look like California law, which is the law most favoring employees,” McCutchen said.

    Relatively low profit margins for retailers and restaurants, combined with the way those establishments are typically staffed, means those businesses could bear the brunt of the economic impact of changes to overtime regulations, DeCamp said.

    And according to DeCamp, expanded overtime protections are unlikely to put more money in workers' pockets, because employers will either lower base salaries to adjust for anticipated overtime or strictly limit work time to no more than 40 hours per week to avoid triggering overtime requirements.

    “The unintended consequences are going to be more severe than any benefit overall,” he said.

    But while the changes to the overtime regulations that could be on the horizon have their critics, they also have vocal supporters who say it's time workers got their due.

    “President Obama’s anticipated proposal to expand overtime protection for hardworking families is an important step towards raising wages, creating jobs and lifting the economic tide for millions,” AFL-CIO President Richard Trumka said in a statement Wednesday. “This will help to build an economy that honors work, not one that steals from workers,”

    A substantial group of workers are labeled as overtime-exempt managers but perform a lot of nonmanagerial work, and they deserve to earn overtime when they put in long hours, according to Kim Bobo, founder of the advocacy group Interfaith Worker Justice.

    “The basic thrust of the proposal makes absolute sense and is certainly in line with the direction and the goals of the FLSA,” Bobo told Law360 on Wednesday.

    Wigdor LLP's Douglas Wigdor said that clarity from the DOL could end up benefiting both workers and businesses.

    “I think that the guidance will be useful not only only to plaintiffs lawyers, but also the companies, which will have a clear picture of how they should be compensating their employees,” Wigdor said.

    So while question remain about exactly what the expected regulatory push will look like, a pitched battle appears to be looming. Some observers are already expressing concern about the use of regulation to achieve what they say is an end-run around an intractable Congress.

    “It's a bit startling to use the administrative rulemaking process to greatly expand coverage. Typically, this is something you would expect from congressional action. It should be a significant concern to employers,” said Kevin Hyde, chair of Foley & Lardner LLP's labor and employment practice. “This is a labor issue, but really, it is a political issue.”

    How November's midterm elections will impact the House and Senate is still unclear, and those elections may be a big factor in determining whether Republican lawmakers will be able to muster an effective challenge, said Seyfarth Shaw LLP's Alexander Passantino, a former acting administrator of the DOL's Wage and Hour Division.

    But it's a safe bet that stakeholders on both sides of the issue will stand up and make vociferous cases for themselves at the DOL, Passantino added.

    “This is going to be a significant rulemaking where there will be a lot of of activity on both sides undefined the employer and employee side undefined in an effort to move the needle on whatever proposal comes out,” he said.

    --Editing by Kat Laskowski and Chris Yates.

  • 07 Mar 2014 4:44 PM | Anonymous member (Administrator)
    By: Kuck Immigration Partners

    Many restaurant owners and employees have “green cards” or lawful permanent residence in the United States. Most have worked VERY hard to get that coveted green card. Sometimes though it’s not getting the green card that’s the hard part, it’s keeping it. Lawful permanent resident (LPR) status implies in its name “residency”. However many green card holders still maintain ties to their home countries and travel for family or business. It’s extremely important to be aware of what you need to do to maintain your LPR status. According to the USCIS, you may be found to have abandoned you permanent residency status if you:
    1. Move to another country intending to live there permanently;
    2. Remain outside the U.S. for more than 1 year without obtaining a reentry permit or returning residency visa. However you may also be deemed to have abandoned your residency even if absent from the U.S. for less than one year;
    3. Remain outside the U.S. for more than 2 years after issuance of a reentry permit without obtaining a returning residency visa;
    4. Remain outside of the United States for more than 2 years after issuance of a reentry permit without obtaining a returning resident visa. However, in determining whether your status has been abandoned any length of absence from the United States may be considered, even if less than 1 year;
    5. Fail to file income tax returns while living outside of the United States for any period;
    6. Declare yourself a “nonimmigrant” on your tax returns;
    If you are a permanent resident and plan to travel abroad for over 180 days in any given year period, consult an immigration attorney to be sure you are taking the proper steps to maintain your residency status. Also, if you ever travel back to the United States and are pressured by Customs and Border Patrol (CBP) to sign a form in order for you to voluntarily abandon your Permanent Residency Status, simply refuse to do it. Tell the CBP officer that you do not wish to abandon your green card and that you would like to exercise your right to contest a finding of abandonment of residence before an Immigration Judge. You will be scheduled for a hearing where you will have the opportunity to convince an Immigration Judge that you did in fact maintain permanent residency status. The best way to avoid any potential issues with abandoning your green card is to apply for citizenship as soon as you are eligible. Keep in mind that extended time out of the U.S. as a permanent resident may also delay your eligibility for naturalization.

    Often it takes a lot of time and effort to obtain permanent residency status in the United States. As with anything in life, the benefits of having LPR status do not come without responsibilities to keep and maintain it. Educate yourself about your responsibilities as an LPR so you will best enjoy its benefits.
  • 05 Mar 2014 10:07 AM | Anonymous member (Administrator)
    By Abigail Rubenstein

    Law360, New York (March 04, 2014, 8:05 PM ET) -- The budget that President Barack Obama submitted to Congress on Tuesday seeks a noteworthy sum to boost the U.S. Department of Labor's Wage and Hour Division's enforcement capabilities, which attorneys say signals that cracking down on workplace pay issues remains a top priority for the administration.

    The president's proposed budget for the 2015 fiscal year would give the DOL $11.8 billion in discretionary funding, along with new, dedicated mandatory funds. While the budget would leave the allocation of funds to most of the department's agencies relatively close to the level they were at in 2014, it includes an increase of more than $41 million for the WHD to ensure workers receive appropriate wages and overtime pay, as well the right to take job-protected leave for family and medical purposes.

    The windfall to the WHD is intended to allow the division to staff up by hiring 300 new investigators and use risk-based approaches to target the industries and employers most likely to break the law. The budget also would allocate $14 million to combat the misclassification of employees, with $10 million in grants for states and $4 million for personnel at the WHD to investigate.

    “This is sort of playing into the bigger thematic of this war, if you will, on inequality and help for the middle class which permeates some of the other White House initiatives,” Ilyse Schuman of Littler Mendelson PC told Law360. “From the employer perspective, this budget request is a reflection of where the administration wants to use its resources, and it clearly wants to use its resources on enforcement, especially on the enforcement of wage-and-hour laws.”

    It's not unusual for the government to seek additional funding for the WHD each year, but it is rare for the request to be for such a big jump, lawyers say.

    “I think it is kind of extraordinary that in a time of record budget deficits and high unemployment and a struggling economy, the administration wants to increase the budget for the Wage and Hour Division by more than 18 percent,” said Paul DeCamp, the national chair of Jackson Lewis LLP's wage and hour practice group and a former WHD administrator. “It is an extraordinary request and one unlikely to make it through the appropriation process.”

    But whether or not the administration actually gets what it is asking for - which is unlikely given Republicans' control of Congress - employers should not ignore the message that the request sends.

    “Whether they get the 300 employees or not or get the $41 million or not is less interesting and less important than where they are going to put their priorities, and that is clearly on targeted industries and on misclassification,” Lawrence Lorber of Seyfarth Shaw LLP said.

    Even if the administration does manage to secure the funds, the immediate impact remains unclear, since attorneys say it would be difficult for the WHD to actually find, hire and train 300 new staffers in one year. Nonetheless, that the administration has such ambitious plans for the agency shows just how important the administration believes it to be, which means employers should be aware of their vulnerabilities and take steps to protect themselves, lawyers say.

    “Employers need to know that the Wage and Hour Division is going to be looking at them, so they really need to do as much proactively as possible to make sure that if the DOL Wage and Hour Division does come knocking, they're in good shape,” Schuman said.

    “There are going to be certain industries that the division is going to continue to target, probably the so-called fissured industries ... so employers in those industries really need to make sure they get things right,” she said.

    The “fissured industries” include hotels, restaurants, construction, janitorial services and others, and they are known to be a particular priority not only for the current agency but also for Obama's nominee to head the WHD, David Weil, who was approved by a Senate committee in January but has yet to have his nomination put to a full Senate vote.

    Although the significant budget increase for the WHD is certainly the most remarkable demonstration of the administration's commitment to the enforcement of workplace laws, attorneys noted that it was not the only place in the proposed DOL budget that would give additional funds for enforcement. The budget also would provide the Occupational Safety and Health Administration with an extra $4 million to enforce whistleblower laws, and would earmark $1.1 million of the Office of Federal Contract Compliance Programs' budget to strengthen efforts to eliminate pay discrimination affecting women.

    Meanwhile, on the legislative side, the proposal calls on Congress to raise the minimum wage to $10.10 an hour and to pass comprehensive immigration reform legislation - two legal proposals that experts say could have significant consequences for employers across the country.
  • 05 Mar 2014 9:47 AM | Anonymous member (Administrator)
    By: Tony Ventry and Laura R. Anthony

    While restaurants are facing more and more lawsuits filed by employees under the Fair Labor Standards Act (“FLSA”), the number of lawsuits filed against individuals, such as officers, managers, supervisors, and shareholders of restaurants, whom employees claim are also their employers, are increasing in frequency as well.

    What is individual liability?
    Under the FLSA, an “employer” is “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Courts usually apply an “economic realities” test to determine if an individual is an employer. Relevant factors under the “economic realities” test include whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules and conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.

    When is a person individually liable?
    The individual liability of owners, managers, and supervisors of restaurants has become more frequent in the industry in the last few years, especially in Georgia and other surrounding southeastern states. For example, in October 2011, a federal district court judge in Georgia determined that the sole shareholder and president of a restaurant was individually liable for a cook’s damages. The court found that the shareholder and president had operational control over the restaurant, including the ability to hire, fire, discipline, and control its employees; she acted on behalf of the restaurant as to the cook’s compensation; she made the decision to not pay the cook at time and one half his regular rate for time worked in excess of forty hours; she was aware that the FLSA required that the cook be paid an overtime premium; and she actively engaged in a scheme to circumvent the FLSA by keeping two separate methods of recording work time.

    Similarly, in late January of 2013, a federal district court in Florida found that the president of a restaurant, who had active involvement in its day-to-day operations, was jointly and severally liable for damages under the FLSA because he possessed sufficient control over the terms and conditions of the employees’ employment to be held individually liable. Specifically, the court found that he hired and fired employees, trained employees, controlled employee work schedules, kept pay records, and handled payroll issues.

    Individual liability has also been an issue in the restaurant industry throughout the rest of the country. In late 2013, former employees of an Illinois restaurant sued the restaurant and its general manager for minimum wage and overtime compensation violations in federal court. The general manager asked the court to dismiss the claim against her, arguing she was not an “employer” under the FLSA. The court found, however, that the general manager interviewed job applicants; overruled other managers’ decisions; told one employee that she would pay the back wages; offered to pay another employee higher wages if the employee did not quit; prepared payroll checks for some employees; and oversaw aspects of the restaurant’s financial transactions and accounting. Based on these allegations, the court found a significant factual issue as to whether the general manager was legally responsible, at least in part, for the alleged FLSA violations.

    In early 2014, former restaurant employees brought an action in a New York federal court alleging minimum wage, overtime, and tipping claims under the FLSA against a restaurant, two managers, and a member of the restaurant operator’s board of directors. The court found that there were questions of fact as to whether the board member was an “employer” where there was evidence that he attended and supervised pre-shift meetings, held mandatory meetings for the employees, and changed the employees’ schedules. Notably, the restaurant did not even contest the employees’ allegation that the two managers were “employers” under the FLSA.

    When is a person not individually liable?
    Not every person associated with a restaurant is found individually liable under the FLSA. In the first Federal appellate decision to address the issue head on, the U.S. Court of Appeals for the Fifth Circuit held that a person is not individually liable as an “employer” under the FLSA merely by his or her status as a limited liability company (“LLC”) member. In early 2012, a bartender at a bar owned by an LLC alleged that he was not paid an hourly wage in violation of the FLSA. The LLC being out of business, the bartender sued a member of the LLC, in his individual capacity. The court applied the “economic realities” test and determined that the LLC member did not have operational control, as there was no evidence that he hired the bartender, signed the bartender’s checks, or supervised the bartender’s day-to-day work.

    How does a person avoid individual liability?
    Pursuit of individuals in FLSA cases is a growing trend in this economy because often the restaurant being sued is on the verge of closing due to insolvency and more money is available from individuals than the restaurant itself. Also, employees and their lawyers know that suing individuals, such as the owner, manager, or an LLC member, exerts more pressure on the restaurant to settle the case.

    To avoid being classified as an “employer” under the FLSA, passive investors of a restaurant should avoid having any real control over the employees’ day-to-day work, such as hiring, firing, supervisory, or payment powers. If an individual is determined to be an “employer,” it is important that he or she knows, and follows, federal and state wage and hour laws. They should review the restaurant’s payroll practices and job classifications to ensure that employees are classified properly. In addition, they should receive training and should be advised that they should not retaliate out of frustration if an employee does file an FLSA action. An audit on the restaurant should also be conducted to ensure that all individuals, including supervisors and managers, are following established procedures and are tracking employees’ hours properly.
    Courts’ expanding views of the scope of FLSA liability mean that more people in the restaurant industry have a practical obligation to know, understand, and abide by FLSA regulations than ever before. In recognition of this new legal reality, restaurant owners, managers, and anyone else acting in such a way that he or she is an “employer” as defined by the FLSA should regularly attend FLSA training programs or seek the advice of employment attorneys who can educate them on their evolving, individual duties under the FLSA in the workplace.
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