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.