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Will Manuel focuses his practice primarily on commercial and employment litigation. He has handled various disputes for both large and small businesses in both Mississippi and other jurisdictions. His clients include numerous manufacturers and commercial interests as well as various insurance and financial services companies. He has worked to defend these clients in both MDL litigation and individual actions brought in Mississippi. Will also has experience in advising businesses on issues involving age discrimination, sexual harassment and wage/overtime disputes. Will's focus is on active litigation from the initial discovery process through trial. View articles by Will

The Tipping Point:  DOL Rescinds 20 Percent Rule on “Side Work” for Tipped EmployeesIf you see your waiter or waitress grumbling during the holiday season, it could be due to the DOL’s Wage and Hour Division’s revision of the rules dealing with minimum pay due to “tipped” employees. Under the FLSA and accompanying regulations, employers can pay “tipped” employees (those who regularly receive not less than $30 a month in tips) not less than $2.13 per hour and take a “tip credit” for the difference they receive in tips up to the minimum wage. Waiters, bartenders, etc. are very familiar with this rule.

Dual Jobs vs. Side Work

Questions arise, however, when an employee may have “dual jobs.” For example, what if John, a hotel maintenance worker, also serves as a waiter in the hotel restaurant? In that situation, the employer can pay John as a “tipped employee” (i.e., $2.13/hour) only for the time he works as a waiter and must pay him at least minimum wage for the maintenance work.

What if, however, John is a server in the hotel restaurant and has regular “side work” that doesn’t generate tips (e.g., rolling silverware, wiping tables, or cleaning dishes)? Do you have to pay him minimum wage for the side work? Back in 1988, the DOL issued guidance stating that if 20 percent or more of a “tipped” employee’s work involved these non-tip-generating “side work” tasks, then the employer had to pay the full minimum wage for their time doing that side work. It’s not clear that this rule was ever aggressively pursued by the DOL, but it generated a lot of litigation. In January 2009, the Bush administration’s DOL explicitly rejected the 20 percent standard and instituted guidance stating that there was no limitation as long as the non-tip-producing duties were performed contemporaneously with the direct customer-service duties. Several months later, the Obama administration reversed course and re-instituted the 20 percent rule.

More litigation ensued over the 20 percent standard, including suits by restaurant advocacy groups claiming the guidance was unconstitutional. In November 2018, the Trump administration’s DOL went back to the 2009 Bush guidance and revoked the 20 percent standard. The DOL, in fact, simply re-issued the 2009 DOL letter on the guidance. Therefore, as it stands now, an employer can continue to use the “tip credit,” even if a server engages in more than 20 percent of their work in non-tip-generating work. However, that non-tip-generating work has to be contemporaneous with the customer-service work.

What Does All This Flip-Flopping Mean?

One of the reasons the 2009 letter (and now the 2018 letter) gives for changing the standard is to avoid all the confusion surrounding the rule. The letter cited a case where the court felt that the 20 percent rule could require “perpetual surveillance” or “precise time logs accounting for every minute” of an employee’s shift. However, even when the 20 percent rule was in place, it is unclear how much it was actually policed. The best takeaway for an employer faced with this situation is to evaluate the actual jobs being done by your employees. If you have a maintenance person who spends 85 percent of their time fixing things, but occasionally helps out with a shift behind the bar, you should not apply the tip rule to their maintenance duties. However, if you have your wait staff rolling silverware before their shift, you are probably OK continuing to apply the tip credit rule. Unless you have a HUGE amount of silverware.

Moving Up the Naughty List: Level of Progressive Discipline Can Be Non-Discriminatory Reason, Says Eighth CircuitMany employers have progressive discipline policies. Are they always followed? Probably not. Should they be? Absolutely, and Lindeman v. St. Luke’s Hospital of Kansas City, a recent case in the Eighth Circuit, demonstrates that being able to point to the use of a progressive discipline policy can help dispose of an ADEA/ADA case.

The Facts

Todd Lindeman worked in St. Luke’s Hospital of Kansas City where the progressive discipline policy had varying penalties for each infraction: verbal warning for the first; written warning for the second; suspension or second written warning for the third; and termination for any subsequent infraction. After a change in his supervisors, Mr. Lindeman quickly moved through the discipline system, incurring three infractions in a four-month period. Finally, Mr. Lindeman violated the patient confidentiality policy and was terminated as a result of this fourth infraction.

Mr. Lindeman, who was over age 40 and suffers from obsessive compulsive disorder, attention deficit disorder, and bipolar disorder, filed suit under the ADA and the ADEA. St. Luke’s moved for summary judgment stating that the reason for his termination—disclosure of confidential information in violation of hospital policies—was a legitimate, nondiscriminatory reason. The burden then shifted back to Mr. Lindeman to show that the reason was pretextual. Mr. Lindeman claimed that two other employees also revealed the confidential information but were not terminated. The district court granted summary judgment, noting that Mr. Lindeman had not shown that the other two employees were at the last stage of the progressive disciplinary policy, as he was. Mr. Lindeman appealed, and the Eighth Circuit affirmed.

Moral of the Story: Follow Your Policy

This may seem like a minor case on a minor issue, but it again points to the gospel that we preach over and over: If you have a policy—enforce it and enforce it consistently. You may find a disciplinary system beneficial, as the hospital did here, to show a non-discriminatory reason for treating employees differently. But it only works if you use it properly.

I Need My Squirrel at My Desk:  A Reminder about Service Animals vs. Emotional Support AnimalsMany people chuckled when they read the news story about the woman who attempted to bring her “emotional support squirrel” on a Frontier Airlines Flight early in October. However, it is hard not to notice the proliferation of “emotional support animals” — usually dogs or cats, but sometimes turkeys or even spiders. As an employer, what are your obligations when an employee tells you they need to bring an animal to work? Well, as is the case in most employment law questions, it depends.

Service Animals

Under the Americans with Disabilities Act (ADA), a service animal is one that is individually trained to do work or perform a task for a person with a disability. The most obvious example is a “seeing eye” dog for a blind person, but other examples may include a dog that assists someone in a wheelchair or a dog that is trained to notice when someone is about to have a seizure. The ADA limits service animals to dogs and, under certain circumstances, miniature horses. Importantly, for an animal to qualify, the work or task the animal performs must be directly related to the person’s disability. Animals whose sole function is to provide comfort or emotional support do not automatically qualify as service animals under the ADA. An employee can seek to have a service animal in the workplace as a reasonable accommodation. If an employee asks to bring a service animal to work, the employer should follow the regular interactive process. Usually, if the employee has a disability serious enough to require a service animal, the request for one is reasonable, absent any safety or public health concerns.

Emotional Support Animals

The ADA provides no definition of an “emotional support animal.” In many circumstances, these animals are not trained in any specific task, but instead provide “comfort” or emotional support to someone who may have a mental health issue. In some cases, a doctor may state that the animal is necessary for an individual’s mental stability. Emotional support animals are not limited to dogs or miniature horses — primarily because (unlike service animals) the federal law does not provide a definition. Does this mean you can ban emotional support animals from your workplace? Not necessarily. For example, what if an employee brings documentation that he or she suffers from PTSD and a physician states that an emotional support animal will help provide mental stability. If that employee requests an accommodation, you need to treat it like any other similar ADA request. However, unlike a service animal, there may be more room for an employer to suggest other, less burdensome accommodations. For example, instead of the emotional support animal, an employer could offer additional breaks, work from home, etc. It is important to note that unlike a service animal, emotional support animals do not enjoy the same type of endorsement under the ADA.