202.795.9999

Podcast: Legal Issues for Business Owners

On May 28, 2019, GMP Partner Tom Martin and Associate Attorney Kevin Hilgers appeared as guests on the Rhode Island Avenue Radio Podcast. Listen to the conversation with Kyle Todd, Executive Director of Rhode Island Avenue NE Main Street, as they discuss educating employers about the District’s new Universal Paid Leave tax, as well as D.C.’s next Minimum Wage increase on July 1, the legal status of marijuana in D.C., and overtime for tipped workers.

Please note that this podcast is created by, and remains the intellectual property of, Rhode Island Avenue Main Street.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999. 

Overview of D.C.’s Wage Theft Prevention Amendment Act

D.C.’s Wage Theft Prevention Amendment Act of 2014 (the “Act”) changed wage-hour laws with the aim of enhancing worker protections.  Under the Act, employers are subject to enhanced remedies, fines, and requirements aimed at enforcing wage payment laws.  Violation of some provisions may cost employers thousands of dollars.  Accordingly, employers are encouraged to learn how this Act impacts their business practices and to take measures to comply with the law.

Increased Penalties

The Act increased penalties for employers committing wage-hour violations and subjected employers to criminal liability for negligent noncompliance in certain instances.  The Act also permits the Mayor to assess administrative penalties against employers and makes legal representation more accessible for wage theft plaintiffs.  As a part of strengthening worker protection laws, the Act treats threats as a form of retaliation.  The Act makes it unlawful for an employer to retaliate against an employee for lodging a complaint alleging noncompliance with wage-related laws.  Employees are protected from retaliation even when an employer mistakenly believes a complaint was made.

New Liabilities

The Act also creates new wage theft liability for employers.  For example, under the Act, general contractors and subcontractors can be held jointly and severally liable when a subcontractor fails to pay an employee her wages earned.  Related provisions have similar implications for temporary staffing firms.

Notice Requirements

To hold employers accountable for the payment of wages, under the Act’s notice requirement provisions, employers must furnish employees with written notice of their employment containing the name, phone number and address of the employer; the employee’s regular payday; and the employee’s rate of pay as well as the basis for the rate.  Employers must retain copies for proof of compliance.

 

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999. 

Employer FAQs on the ADA

Under the Americans with Disabilities Act (“ADA”), discrimination can include an employer’s failure to make reasonable accommodations for applicants or employees who have physical or mental limitations that are known to the employer.  These accommodations must be provided unless the employer can demonstrate that the accommodation would impose an undue hardship on the operations of the business.  The following is a brief overview of these ADA requirements.

What is a Reasonable Accommodation?

A reasonable accommodation is any modification or adjustment to a job or the work environment that will enable a qualified applicant or employee with a disability to participate in the application process or to perform essential job functions. Generally, a reasonable accommodation must only be provided if the disability is “known” to the employer, the disabled individual requests one, and the accommodation would not be an undue hardship to the employer.

What are examples of reasonable accommodations?

Accommodations can include restructuring a job, modifying work schedules, acquiring or modifying equipment, permitting the use of service animals, providing qualified readers or interpreters, or appropriately modifying examinations, training, or other programs.

How can an accommodation be an undue hardship?

An undue hardship is a significant disruption, difficulty or expense on the employer. Factors to consider include:

  • Nature and cost of the accommodation
  • Financial resources of the employer
  • Number of employees at the employer
  • Overall resources of the employer
  • Impact on operations

For which conditions must accommodations be made?

 Accommodations must be made for people with physical or mental impairments that substantially limit major life activities, such as seeing, hearing, speaking, walking, breathing, performing manual tasks, learning, caring for oneself, and working.  In addition to disabilities, accommodations must also be made for pregnancy, childbirth or a related medical condition and all aspects of religious observance.

How can an employer be found liable under the ADA?

An employer will be liable for the denial of a “reasonable accommodation” if the employee proves:

  • She has an ADA covered disability;
  • Her employer had notice of her disability;
  • A reasonable accommodation would permit her to perform essential functions; and
  • Her employer refused to provide accommodation.

The above is for informational purposes only and is not legal advice.  If you are an employer and are faced with an issue related to the above, please go through the “Contact Us” page on our website, or call (202) 795-9999.

Maximizing the Employee Handbook

Clear communication between management and employees enables successful workplace operations and effective risk management.  For the new year, employers often find it helpful to revisit their employee handbooks with the help of legal counsel to ensure that their handbooks are consistent with recent changes in labor and employment law.  In this post, we provide a high-level overview of the importance of handbooks for employers in the District of Columbia, and some of the necessary components of an employee handbook.  This information helps employers manage workplace relations and expectations while mitigating litigation risk.

Legal Updates

A complete handbook informs employees about relevant labor and employment laws, including but not limited to, those addressing discrimination and harassment, “legal” marijuana use, reasonable accommodations, paid and unpaid leave, joint-employer status, and wages (e.g. minimum and wage theft).  The following describes some aspects of the important District of Columbia laws that employers address in updated handbooks.

  • The Accrued Sick and Safe Leave Act of 2008 (amended in 2013) requires an employer who rehires an employee within one year to reinstate unused, accrued paid leave; allows an employee to accrue sick leave in the 90-day introductory period and access it after the end of the period; and requires certain employers with employees who receive tips or commissions to supplement a base wage below the minimum wage to provide a minimum of one hour of paid leave per forty-three hours of work, up to a maximum of five days per year.  These calculations can be changed by regulation, and employers are expected to stay current on all changes.
  • The Universal Paid Leave Act of 2017 will soon require all covered employers in the District of Columbia to pay into a government fund offering paid leave to all covered employees. Non-government employers will be required to provide notice to their employees of any benefits to which they are entitled.
  • District of Columbia Human Rights Law prohibits discrimination in employment because of certain protected traits. The District of Columbia Office of Human Rights maintains a current list of protected traits on its website.  As recently as October 2017, the number of protected traits was increased to 20 to include an applicant’s credit information, subject to specific exceptions.
  • The Protecting Pregnant Workers Fairness Act of 2014 requires employers to provide reasonable workplace accommodations to employees whose ability to perform job duties is limited because of pregnancy, childbirth, breastfeeding, or a related medical condition.
  • The Wage Theft Prevention Act of 2014, amended in 2016, subjects employers to enhanced remedies, fines, and requirements aimed at increasing accountability to bolster enforcement of wage payment laws. It steepens penalties for employers, establishes liability for failure to pay wages in particular circumstances, and strengthens worker protection through anti-retaliation provisions.
  • The Wage Transparency Act of 2014, with some exceptions, prohibits employers from barring employees from disclosing their wages to other employees. Employers are also prohibited from retaliating against employees for such disclosures, and from preventing employees from filing complaints against their employer for violations of the act.

Other laws may apply depending on each employer’s situation, including but not limited to the nature of the work and the number of employees employed.

Managerial Guidance

Employee handbooks also give management the proper tools to respond to matters that commonly affect employers such as attendance, paid or unpaid leave, codes of conduct, confidentiality, and complaint intake and investigation procedures.  A well-written handbook will guide management through the complaint intake and investigation process, and appropriate disciplinary procedures in response to potential violations of company policies.  The handbook is also a resource for management when setting employee expectations for conduct and performance in the workplace.  Examples of policies that manage employee expectations are social media and technology use, as well as “dating” policies, which are becoming far more common in the wake of the #me-too movement.  By ensuring that managers and employees are all aware of current employment laws, and by establishing clear policies and procedures to manage the employer-employee relationship and expectations, employers can successfully mitigate legal risk.

This post provides a high-level overview of the laws, policies and procedures that should be considered in any employee handbook.  This post does not constitute legal advice.  Determining whether employer policies and procedures contained in a handbook sufficiently preserve employee rights and protect employers requires careful review by an experienced human resources or legal representative.  If you are an employer with questions about the matter contained in this post, or if you are seeking legal advice or representation, please go to the “Contact Us” page of our website, or call us at (202) 795-9999.

Calculating Overtime Wages for Tipped Employees in the District of Columbia

Overview of the D.C. Minimum Wage

The minimum wage in the District of Columbia is $13.25 per hour and will increase to $14.00 per hour on July 1, 2019.  D.C. Employers may pay “tipped employees” less than this minimum wage, but no less than the tipped minimum wage of $3.89 per hour.  The difference between the D.C. minimum wage and a tipped employee’s direct wage paid by the employer is referred to as a “tip credit” that is applied to the employer’s minimum wage obligation.  Assuming an employer pays a tipped employee the minimum of $3.89 per hour, the employer would receive a maximum tip credit of $9.36.


Illustration 1:

  • [$13.25 (Minimum Wage)] – [$3.89 (Tipped Minimum Wage)] = [$9.36 (Tip Credit)]

Although Employers can apply the full tip credit to their minimum wage obligation, if the weekly average of an employee’s hourly earnings (tips + wages) do not equal the D.C. minimum wage of $13.25, the employer must compensate the employee with the difference.

 

Calculating Overtime Wages

While D.C. minimum wage obligations may be straightforward, calculating the tipped minimum wage for employees who work overtime is not as intuitive.  The Fair Labor Standards Act (“FLSA”) establishes the rules for calculating overtime wages.  This federal law entitles non-exempt employees to at least 1½ times their regular rate of pay for all hours worked over 40 hours in a workweek.

In the District, an employee who is compensated at the minimum wage of $13.25 is entitled to at least $19.88 for each hour worked over 40 hours in a workweek.  


Illustration 2:

  • [$13.25 (Minimum Wage)] x [1.5 (Overtime Rate)] = [$19.88 (Overtime Rate of Pay)]

In contrast, if an employee is compensated at the tipped minimum wage, that employee’s direct overtime pay will equal $10.52 per hour for each hour worked over 40 hours in a workweek.  So where does this number come from?

For the purposes of this example, let’s assume that an employee is compensated at the tipped minimum wage of $3.89 and at the minimum overtime rate of 1½ times their regular rate of pay.

A common misunderstanding by employers when calculating overtime is to pay 1½ times the employee’s tipped minimum wage of $3.89.  If a tipped employee is paid less than the minimum wage of $13.25, overtime is still paid at 1½ times the minimum wage of $13.25. 

However, the D.C. tip credit of $9.36 can still be applied. In this example, the tip credit would be subtracted from the overtime rate of pay, which would equal the “tipped overtime rate of pay.”


Illustration 3:

  • [$13.25 (Minimum Wage)] x [1.5 (Overtime Rate)] = [$19.88 (Overtime Rate of Pay)]
  • [$19.88 (Overtime Rate of Pay)] – [$9.36 (Tip Credit)] = [$10.52 (Tipped Overtime Rate of Pay)]

 

Conclusion

Assuming a tipped employee is paid the tipped minimum wage, overtime for that employee would be paid at $10.52 per hour for each overtime hour worked.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999.