Jan 20, 2022 | Overtime & Wages
Tipped Employees In California & California Labor Code Section 351 (“Labor Code Section 351”)
Labor Code Section 351 prohibits employers and their agents from sharing in or keeping any portion of a gratuity left for or given to one or more employees by a patron. Furthermore it is illegal for employers to make wage deductions from gratuities, or from using gratuities as direct or indirect credits against an employee’s wages.
The California law further states that gratuities are the sole property of the employee or employees to whom they are given. “Gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons. It also includes any amount paid directly by a patron to a dancer covered by IWC Wage Order 5 or 10.
What Is A Tip?
A tip is money a customer leaves for an employee over the amount due for the goods sold or services rendered. Tips belong to the employee, not to the employer.
A customer pays their bill with a credit card, and the payment includes a tip. When can the employee expect to receive the money from the employer?
Payment of a gratuity made by a patron using a credit card must be paid to the employee no later than the next regular payday following the date the patron authorized the credit card payment.
Can my employer deduct the credit card processing fees from my tips?
No. Labor Code Section 351 provides that the employer must pay the employee the full amount of the tip that is indicated on the credit card. The employer may not make any deduction for credit card processing fees or costs that are charged to the employer by the credit card company from gratuities paid to the employee.
A worker is employed in a large restaurant as a waiter. The waiter’s employer told the employee that he/she is required to share tips with the busboy and bartender. Is there an obligation to do this?
Yes. Labor Code Section 351 provides that “every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”
The section has been interpreted to allow for involuntary tip pooling so long as the tip pooling policy is not used to compensate the owner(s), manager(s), or supervisor(s) of the business, even if these individuals should provide direct table service to a patron or are in the chain of service to a patron.
Further, the policy must be fair and reasonable. Therefore, an employer can require an employee to share tips with other staff that provide service in the restaurant, so long as the employees that share in the tip pooling policy are employees to whom the tip was paid, given, or left. In this regard, the courts have validated policies that distributed tips among employees who provide “direct table service” or who are in the “chain of service” provided that employee in the chain of service bears a relationship to the customers’ overall experience. (updated March 2013).
Are tips received considered part of one’s “regular rate of pay” for overtime calculations?
No. Since tips are voluntarily left by the customer of the business and are not being provided by the employer, they are not considered as part of one’s regular rate of pay when calculating overtime.
Is a mandatory service charge considered to be the same as a tip or gratuity?
No. A tip is a voluntary amount left by a patron for an employee. A mandatory service charge is an amount that a patron is required to pay based on a contractual agreement or a specified required service amount listed on the menu of an establishment.
An example of a mandatory service charge that is a contractual agreement would be a 10 or 15 percent charge added to the cost of a banquet. Such charges are considered as amounts owed by the patron to the establishment and are not gratuities voluntarily left for the employees. Therefore, when an employer distributes all or part of a service charge to its employees, the distribution may be at the discretion of the employer and the service charge, which would be in the nature of a bonus, would be included in the regular rate of pay when calculating overtime payments.
Is it legal for an employer to deduct tips from one’s paycheck?
No. An employer can neither take one’s tips (or any part of them) nor deduct money from one’s wages because of tips earned. Further, an employer cannot credit one’s tips against the money the employer owes the employee. Labor Code Section 351
An employee is paid less than minimum wage because the employer includes the employee’s tips in his/her hourly pay. Is this legal?
No. Unlike under federal regulations, in California an employer cannot use an employee’s tips as a credit towards its obligation to pay the minimum wage. California law requires that employees receive the minimum wage plus any tips left for them by patrons of the employer’s business. Labor Code Section 351
What can an employee do if his/her employer credits tips against one’s wages?
An employee can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner’s Office) or file a lawsuit in court against his/her employer to recover the lost wages. Additionally, if an employer is crediting an employee’s tips against wages, the employee is being underpaid wages and, thus, if the employee no longer works for this employer, the employee can make a claim for the waiting time penalty.
What can an employee do if his/her employer retaliates because the employee objected to the crediting of tips against one’s wages?
If an employer discriminates or retaliates in any manner whatsoever, for example, the employer discharges the employee because the employee objected to the crediting of tips against wages, or because a claim was filed or threatened to be filed with the Labor Commissioner, an employee can file a discrimination/retaliation complaint with the Labor Commissioner’s Office. Alternatively, the employee can file a lawsuit in court against the employer.
Source: California Department of Industrial Relations, Labor Commissioner’s Office, Tips & Gratuities (Accessed 1/20/2022).
Employees in California who believe they have been the victim of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
Jan 20, 2022 | Filed Securities Cases
Securities Class Action Lawsuit Filed On Behalf Of Investors Of TaskUs, Inc.
Kehoe Law Firm, P.C. is investigating whether TaskUs, Inc. (“TaskUs,” “TASK,” or the “Company”) (NASDAQ: TASK) violated federal securities laws.
On February 23, 2022, a securities class action lawsuit was filed in United States District Court, Southern District of New York, against TaskUs on behalf of all persons and entities that purchased or acquired TaskUs publicly-traded securities between June 11, 2021 and January 19, 2022, inclusive (the “Class Period”).
INVESTORS OF TASK STOCK WHO ACQUIRED THEIR SECURITIES DURING THE CLASS PERIOD AND LOST MONEY ARE ENCOURAGED EITHER TO CLICK HERE TO PROVIDE INFORMATION ABOUT THEIR TASKUS INVESTMENT LOSSES OR CLICK HERE TO DISCUSS JOINING THE CLASS ACTION LAWSUIT.
According to the complaint, the TaskUs defendants’ statements were materially false and misleading, as (1) TaskUs was experiencing severe financial strain and business challenges, particularly with its most important customer Facebook; (2) the Content Security market was smaller than Defendants represented and Defendants’ representations were based on outdated market data; (3) TaskUs improperly recognized revenue from certain key contracts; (4) Defendants overstated the size of TaskUs’ workforce as well as employee retention rates, and understated attrition rates; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
To request a copy of the class action complaint, please CLICK HERE.
TaskUs investors should also be aware that Spruce Point Capital Management issued a report on January 20, 2022 which, among other things, stated, that “[a]fter conducting a forensic financial and accounting review, Spruce Point believes shares of TaskUs . . . a highly promoted business process outsourcing (BPO) firm to digital and emerging technology companies, has a pattern of exaggerated and inflated business claims, including revenue, and is covering-up financial strain with reduced disclosures, cherry-picked market data, and non-standard key performance metrics.”
On this news, the stock price of TaskUs dropped significantly and traded down more than 20% during intraday trading on January 20, 2022. The TASK stock price closed at $30.13, down 15.34% on January 20, 2022.
TASKUS INVESTORS WHO ACQUIRED THEIR SECURITIES DURING THE CLASS PERIOD AND SUFFERED FINANCIAL LOSSES ARE ALSO ENCOURAGED TO CONTACT EITHER JOHN KEHOE, ESQ., (215) 792-6676, EXT. 801, [email protected], OR MICHAEL YARNOFF, ESQ., (215) 792-6676, EXT. 804, [email protected], [email protected], TO DISCUSS THE TASKUS CLASS ACTION INVESTIGATION OR POTENTIAL LEGAL CLAIMS.
Jan 20, 2022 | Overtime & Wages
Security Guard & Maintenance Services
The security guard service industry includes those firms that provide protection to firms or individuals. Usually security guards cover a post daily and are paid on an hourly basis.
The maintenance service industry includes firms that provide general janitorial services. Normally, the firm provides the necessary materials to do the cleaning, and employees generally perform work at one or more locations during the work shift.
If the security guard or maintenance worker is employed in an establishment that is engaged in commerce or in the production of goods for commerce, such as a warehouse, factory, bank or insurance company, he/she is covered by the FLSA.
If the security guard or maintenance firm has sales or projects sales in excess of $500,000 per year, or is part of other related businesses where there is common ownership, control, or business purpose and the combined sales or projected sales are in excess of $500,000 per year, then the FLSA will apply to all employees of the firm/enterprise.
Pay Requirements
The FLSA requires the payment of the federal minimum wage and the payment of time and one-half the regular rate of pay for hours worked in excess of 40 in the workweek. The FLSA also requires the firm to make, keep and preserve certain records among which are the hours worked on a daily and weekly basis by non-exempt employees.
There are also certain restrictions in the employment of minors under age 18, such as the number of hours worked per day/week, how late they can work in the day, and the work in which they may engage. The 1996 Amendments to the FLSA allow employers to pay a Youth Minimum Wage of not less that $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the Youth Minimum Wage.
Examples Of Industry Wage And Hour Problems
Security Guard Firms
The security guard cannot bear the cost of the uniform, gun, whistle, belt, and other employer/industry required tools if by purchasing them he/she receives less than the applicable minimum wage or such purchasing would cut into any overtime wages earned. This applies whether she\he buys the uniform directly or if it is sold to the employee by the firm.
The cost of dry cleaning the uniform cannot be borne by the employee, if this results in him/her receiving less than the minimum wage or the costs would cut into any overtime wages.
Overtime must be calculated on a workweek basis, and the hours cannot be averaged over a two week period.
The hours worked by guards in more than one post in the same week must be counted together for overtime purposes.
Travel time between work sites must be treated as hours worked.
All hours of work must always be recorded; sometimes they are hidden by showing “expense” payments for hours over 40 in a week, which is illegal.
Maintenance Service Firms
Every person who works must receive payment. If a man and wife team and/or other family members work together, each member of the team must be carried on the payroll and each must receive proper compensation for their hours worked.
Minors under the age of 16 cannot work past 7:00 p.m., except from June 1st through Labor Day, when they may work until 9:00 p.m.
If minors work, they must also receive proper compensation for the hours they work.
Overtime must be paid after 40 hours of work in the workweek to all non-exempt employees regardless of the method of compensation, such as hourly, piece rate, task basis, or salary.
The hours worked by a janitor who works in more than one establishment must be counted together for overtime purposes.
Source: U.S. Department of Labor (Fact Sheet #4, Revised July 2008).
Security Guards, Maintenance Services & Janitorial Services employees who believe they are victims of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] to request a free, no-obligation evaluation of potential legal claims.
Jan 20, 2022 | Overtime & Wages
U.S. DOL Files Lawsuit Against San Antonio, Texas Company Seeking $114,000 In Overtime Back Wages, Damages For 79 Security Guards
A U.S. Department of Labor investigation has found that the pay practices of a San Antonio, Texas company that exclusively hires military veterans to work as security guards violated federal law and shortchanged 79 employees of $57,465 in overtime back wages.
On Nov. 19, 2021, the Department of Labor filed a lawsuit in United States District Court for the Western District of Texas against Texas Veteran Security LLC and its owner, Gerard X. Morales, to recover the wages. The lawsuit seeks the back wages and an equal amount in liquidated damages totaling $114,930 for the workers, as well as injunctive relief.
Investigators with the Department of Labor’s Wage and Hour Division found the employer paid its workers on a bi-weekly basis and failed to compute overtime after 40 hours in a workweek on a consistent basis, resulting in the payment of overtime hours at the straight-time rate in violation of the Fair Labor Standards Act. The employer also violated the FLSA’s recordkeeping provisions.
Texas Veteran Security LLC provides armed and unarmed security guards, as well as private investigative services. The company also employs off-duty Texas peace officers and commissioned security officers.
To view a copy of the complaint filed by the Department of Labor, please click Texas Veteran Security, LLC.
Source: U.S. Department of Labor.
Victims of wage and hour violations are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
