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Thursday, December 18, 2014

Utility Drug Test Refusal Done Wrong

By: Tommy Eden

 

Jwaun Ward, an employee of Decatur Utilities, was randomly selected, along with five other employees, to take a drug test. This was the second time during 2012 that Ward had been randomly selected. 

On the morning of his selection, Ward was instructed by his supervisor, in the presence of other employees, to drive to the front office and to "go pee in a cup in front of the work group." Ward testified that he felt "humiliated, embarrassed, and belittled," according to his lawsuit. Ward also gave deposition testimony that  during the previous months of May and June, the same supervisor had said that Ward "was going to be the first n that he fired [for failing] a drug test," and that he was going to make Ward take "four or five" more drug tests before the end of the year in an effort to "kill him with the drug test."

Rather than drive to the front office to take the test, Ward went to the Superintendent’s office and said that he was going home, explaining that he was "not going to entertain his supervisor's request because of the way he asked." Ward then called the Human Resources Manager before leaving the premises and told her about his supervisor's comments. She told Ward that he was selected at random, and that if he refused to take the drug test, then his employment would be terminated. Ward left the premises, according to facts in the Judge's Order.

Ward met with Utility Managers the following morning, to discuss the drug test and offered at that time to be tested. For the first time, Ward stated that he had suffered mistreatment from fellow employees and from his supervisors because of his race. Ward was suspended for refusing the drug test, and the Manager was assigned to investigate his racial allegations.

Ward was later informed during a telephone conversation, that he would be required to complete a drug awareness program in order to retain his employment at Decatur Utilities. Ward refused. The HR Manager later gave deposition testimony that if Ward had taken a later drug test and met with a substance abuse counselor he would not have been fired. Five days later, Ward’s employment with the Utility was terminated. 

On December 15, 2014, a Federal District Judge for the Northern District of Alabama granted summary judgment to the Utility on Ward’s race discrimination claim but found creditable evidence that Ward may have been retaliated against since he offered to take a later drug test but was not allowed to do so. The case is Ward v. Municipal Utilities Board of Decatur, Alabama.

Common Sense Counsel: Consistently following a well drafted DOT compliant public entity drug testing policy is absolutely critical to avoiding these types of adverse outcomes. When an employee refuses to be drug tested that is a “refusal” under DOT regulation and cannot be remedied by a later offer to be tested by the employee. The Utility appears to have simply made the wrong call when faced with a difficult dilemma. 

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Friday, December 12, 2014

Obama's Immigration Actions are Good for Employers, Too

By: Tommy Eden and Will Krasnow


When President Obama announced his Executive Actions On Immigration (to take effect in about 90 days), he said that the changes were intended to “make it easier and faster for high-skilled immigrants, graduates and entrepreneurs to stay and contribute to our economy, as so many business leaders have proposed.”

The President appears to be right. In particular, the proposals that are intended to improve our legal immigration system, and to make it easier to hire and retain professionals and entrepreneurs, seem to be beneficial to employers. Here are the highlights:

1) A larger pool of undocumented individuals will be eligible to receive work authorization.

2) Up to 5 million undocumented individuals will be eligible to receive work authorization as a result of

• expansion of the existing Deferred Action for Childhood Arrivals (“DACA”) program for persons who entered the United States. as children under the age of 16; and

• institution of a new program for parents of U.S. citizens or lawful permanent residents.

3) Other proposals should improve our legal immigration system.

• Visa Modernization – There are unreasonably long waits in many employment categories for applicants to obtain visas to become lawful permanent residents. The appropriate agencies are to look at ways to modernize the visa system, including efforts to ensure that all available visa numbers are captured. Agencies will also consider whether spouses and children of employees should be counted as individual applicants, or whether one visa could cover the entire family.

• Enhancing Options for Foreign Entrepreneurs. This initiative includes liberalizing the rules for national interest waivers that will allow employees to bypass the recruitment of U.S. workers via the PERM (permanent labor certification) process.

• Clarification of “Specialized Knowledge” Applicable to L-1B Visas – The U.S. Citizenship and Immigration Services is expected to adopt a more liberal interpretation of “specialized knowledge.”

• Expanded I-140 Portability – Employees with approved I-140 petitions who are unable to apply for permanent residency because of the unavailability of a visa number, will be allowed the benefits of adjustment of status – that is, employment and travel authorization, and the ability to transfer to a new position or employer in the same occupational classification as the one covered by the I-140 petition or a “similar” one. “Same or similar” also will be clarified to allow greater opportunities for job transfers and promotions.

• STEM (Science, Technology, Engineering and Math) – STEM-based optional practical training will be expanded. Currently, optional practical training is allowed for up to 29 months for U.S. graduates with bachelor’s or higher degrees in STEM fields.

• Spouses of H-1B workers who are in the latter stages of the permanent resident process will be allowed to apply for employment authorization. The proposed rule (announced before the Executive Actions on Immigration) is to be finalized by January 2015.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and Will Krasnow is a partner in Constangy's Boston office. Tommy can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with live links.


Wednesday, December 10, 2014

Waiting is Not Working says High Court

By: Tommy Eden



Jesse Busk worked for Integrity Staffing Solutions, Inc., a temporary staffing employer requiring its hourly warehouse workers, who retrieve products from warehouse shelves and packaged them for delivery to Amazon.com customers, to undergo a security screening before leaving the warehouse each day. Amazon mandated the security check to reduce shrinkage from employee theft of merchandise. Sometimes Busk had to wait in line for 25 minutes after he clocked out before the screening was completed.

Busk and several former employees of the company sued alleging that they were entitled to compensation under the Fair Labor Standards Act (FLSA) for the roughly 25 minutes each day that they spent waiting to undergo and undergoing those security screenings.They also alleged that the company could have reduced that time to a de minimis amount by adding screeners or staggering shift terminations. Because the screenings were conducted to prevent employee theft they claimed such were for the sole benefit of the employers and their customers and they should be paid to wait.

The United States District Court in Nevada dismissed the complaint, holding that the screenings were not integral and indispensable to the employees’ principal activities but were instead postliminary and non-compensable. The U. S. Court of Appeals for the Ninth Circuit reversed asserting that post-shift activities that would ordinarily be classified as non-compensable postliminary activities are compensable as integral and indispensable to an employee’s principal activities if the post-shift activities are necessary to the principal work and performed for the employer’s benefit. This decision alarmed similar large warehouse operations nationwide.

This week the United States Supreme Court held unanimously that the time spent waiting to undergo and undergoing security screenings is not compensable post-liminary activities under the FLSA. The Court reasoned that the security screenings at issue are not the principal activities the employees were employed to perform—i.e., the workers were employed not to undergo security screenings but to retrieve products from warehouse shelves and package them for shipment. Nor were the screening “integral and indispensable” to those activities. The Portal-To-Portal Act, which amended the FLSA in 1947, exempts employers from liability for activities that are “preliminary or postliminary” to a worker’s principle tasks.

Common Sense Counsel: FLSA violations are the most common and costly employment lawsuit being brought and employers are paying out millions in settlements and attorney fees. With the FLSA self help to determine if you are in compliance is simply not a legal option and an ounce of prevention with a wage and hour audit is the only risk reduction strategy. The top three most costly violations are: 1) Misclassification of Exempt Employees. 2) Not Counting Every Hour Worked; and 3) Not Calculating Overtime Pay the FLSA Way.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3

Friday, December 5, 2014

Final LGBT Non-Discrimination Rule Released

 By: Tommy Eden



The Office of Federal Contract Compliance Programs announced Wednesday that it is issuing a Final Rule implementing President Obama's Executive Order that prohibits federal contractors from discriminating on the bases of sexual orientation and gender identity.

This Final Rule will be effective 120 days after publication in the Federal Register (which has not yet occurred) and will apply to federal contracts entered into or modified on or after that date.

What does the Final Rule change? The EO Clause has been changed to include "sexual orientation" and "gender identity." However, those contractors that incorporate the EO clause by reference will not need to physically alter their subcontracts or purchase orders.

Contractors must notify applicants and employees of their non-discrimination policy by posting the "EEO is the Law" poster. Presumably, the government will be updating this poster to include these two new categories.

Contractors are also obligated to expressly state in job advertisements that all qualified candidates will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin. The Final Rule provides that employers can satisfy this requirement by including that verbiage or simply indicating that the company is an "equal opportunity employer."

Although employees hired outside of the United States are not covered by the regulations, if a contractor is not able to obtain a visa of entry for an employee or potential employee to a country in which it is doing business, the regulations require the contractor to notify both the OFCCP and the U.S. Department of State if the contractor believes that the refusal of the visa is because of the individual's protected characteristic. This requirement now applies to sexual orientation and gender identity status.

The section of the regulations regarding Placement Goals in AAPs has also been updated. Contractors are prohibited from extending preferences on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin due to specific placement goals.

Common Sense Counsel: The Final Rule simply adds sexual orientation and gender identity to the sections of the regulation where the other protected categories are listed, so the impact on federal contractors is limited. However, contractors should begin the process of determining whether and when they need to do the following:

• Update the EO Clause in subcontracts and purchase orders;

• Amend the EEO and AA Handbook policy to include sexual orientation and gender identity;

• Obtain new "EEO is the Law" posters;

• Modify their EEO tagline on job solicitations;

 Train appropriate personnel on the new protections; and

 Deal with “the restroom issue” now so it will not become a distraction.

In addition, the OFCCP has issued FAQs regarding its interpretation of the Final Rule. These will probably be updated periodically as contractors pose questions to the OFCCP.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and Cary Crotty (ccrotty@constangy.com) is a member of Constangy's Strategic Affirmative Action Practice Group Tommy can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with live links.




Monday, December 1, 2014

Headscarfs and Hand Scanners on Court’s Gift List

By: Tommy Eden



Abercrombie & Fitch’s religious headscarf battle headed to the United States Supreme Court in early October. Its stringent “Look Policy” dress code has come under fire in several cases from employees who say they were disqualified from getting, or keeping, a job because they wanted to wear a hijab, or headscarf. 

The Equal Employment Opportunity Commission (EEOC) filled suit on behalf of Samantha Elauf, a Muslim woman who was denied a job as a salesperson at an Abercrombie Kids store in Tulsa, Oklahoma, because she wore a headscarf at her job interview. However, Elauf didn't specifically say that she wanted a religious accommodation to wear it while working. A Federal District Court ruled in her favor, but an appeals court reversed the decision, holding that Elauf had to explicitly ask for religious accommodations. Look for Elauf to get her scarf back by Christmas.

In another case, Consolidation Coal Company in West Virginia installed an attendance tracking system for payroll purposes at their Robinson Run Mine that requires employees to electronically sign-in using a biometric hand scanner for purposes of identification and time clock tracking.
Employee Beverly Butcher is an Evangelical Christian with 35 years of service at the Mine. When faced with the biometric logging in, he meet with his manager and stated that he had a genuinely held religious belief that would not permit him to submit to biometric hand scanning providing his manager with a letter that he wrote discussing his genuinely held religious beliefs about the relationship between hand scanning technology and the Mark of the Beast and antichrist discussed in the Bible. He requested an exemption from hand scanning because of his religious belief.
At a later meeting, his managers proposed that Butcher should submit to hand scanning of his left hand turned palm up rather than his right hand. Butcher rejected their offer stating that he is prohibited by his religion from submitting to scanning of either hand. The managers declined to accommodate Butcher’s request to be exempted from the biometric sign-in telling him that he would be subject to disciplinary action if he refused to use the biometric hand scanning system.
Butcher promptly retired and specifically informed his managers that he was retiring involuntarily, telling them that he was retiring under protest and felt that he had no choice but to retire because of their refusal to grant an exemption from biometric hand scanning. At least two persons employed at the Mine had been permitted exemptions from biometric hand scanning due to missing fingers.
Last month the EEOC filed a Motion for Summary Judgment seeking a judgment for religious discrimination in its suit filed on behalf of filed Butcher in West Virginia U.S. District Court. Consolidation Coal last week urged the court to reject the EEOC's bid for summary judgment and instead grant judgment in its favor. Good chance Butcher will win this Bible sword drill.
Common Sense Counsel: A reasonable religious accommodation is any adjustment to the work environment that will allow the employee to practice his/her religion and still work. An employer might accommodate an employee's religious beliefs or practices by allowing tasteful religious attire, flexible scheduling, voluntary swaps or modification of login requirements. All an employee needs is a strongly held religious belief to make such a request. I do not think the employer has a prayer in either case.
Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com



            

Tuesday, November 18, 2014

Black Friday OSHA Safe Shopping Guidelines

By Tommy Eden



The Occupational Safety and Health Administration (OSHA) on November 12, 2014, sent a letter to Big Box retailers to implement crowd control plans and other safety measures in preparation for Black Friday shoppers.

In November 2008, Jdimytai Damour, a temporary employee at a Wal-Mart in Valley Stream, N.Y. Damour was knocked to the ground and crushed by a crowd of 2,000 shoppers rushing into the store for its "Blitz Friday" sales on the day after Thanksgiving.

OSHA found that the store had failed to implement reasonable and effective crowd management practices fining the store $7,000 which is the maximum penalty for a serious violation under the law.

To prevent a reoccurrence of this tragedy, OSHA sent the November 12th letter to major retailers, industry trade associations and local fire marshals advising them to adopt a crowd control plan to protect employees during the holiday sales season.

Under OSHA guidelines, employers are responsible for providing a place of employment free of recognized hazards that are likely to cause serious injury or death. OSHA also published a Fact Sheet entitled, "Crowd Management Safety Guidelines for Retailers," which contains safety guidelines retail stores may adopt in addition to its own safety procedures. The guidelines are also excellent guidance on crowd control for any large event.

Common Sense Counsel: OSHA recommends that employers planning a large shopping event adopt a plan that includes the following 4 elements (Full Checklist Fact Sheet):

Planning
·  Where large crowds are expected, hire additional staff as needed and have trained security or crowd management personnel or police officers on site.
·  Create a detailed staffing plan that designates a location for each worker. Based on the size of the crowd expected, determine the number of workers that are needed in various locations to ensure the safety of the event (e.g., near the door entrances and throughout the store).
·  Ensure that workers are properly trained to manage the event.

Pre-Event Setup:
· Set up barricades or rope lines for crowd management well in advance of customers arriving at the store.
· Make sure that barricades are set up so that the customers' line does not start right at the entrance to the store. This will allow for orderly crowd management entry and make it possible to divide crowds into small groups for the purpose of controlling entrance.
· Ensure that barricade lines have an adequate number of breaks and turns at regular intervals to reduce the risk of customers pushing from the rear and possibly crushing others, including workers.

During the Sales Event:
·  Provide a separate store entrance for staff. Provide door monitors there to prevent crowd entry.
·   Make sure that all employees and crowd control personnel are aware that the doors are about to open.
· Staff entrances with uniformed guards, police or other authorized personnel.

Emergency Situations:
·   Do not restrict egress, and do not block or lock exit doors.
·  Know in advance who to call for emergency medical response.


Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3


Wednesday, November 12, 2014

ACA Compliance Countdown

By Tommy Eden 



For employers with 100 or more employees, Affordable Health Care Act (ACA) compliance should be in your high beams. There is a great deal of recent guidance and activity, including a notice that 5 Justices of the United States Supreme Court accepted two ACA cases to review, King v. Sebelius (DC Circuit) and Halbig v. Sebelius (4th Circuit), which were in conflict on the issue of availability of a government subsidy to those persons not residing in one of the 34 states that did not establish a state health care exchange. As the drama unfolds, many employers still have much ACA compliance work to do and this checklist may be helpful:

ACACompliance Countdown Checklist

1. Are you an Employer covered by the “Pay or Play” Mandate?
□ Are you subject to the 2015 pay or play rules based on your 2014 workforce (100 or more Full Time Equivalents [FTEs])?
□ Have you included all controlled group and affiliated service group members in your coverage determination?
□ If using a staffing company, are their workers also your common law employees (i.e. do you direct the means and manner of work performed is the 1st test)?
□ Do any special transition rules delay your compliance deadline for 6 months?
□ Have you properly classified each 2014 employee’s status with written documentation in his or her personnel file (i.e. full time, part-time, variable hour, seasonal or temporary)?
□ Have you studied the NFIB Healthcare Playbook to see how your small business is scoring on ACA compliance? http://www.nfib.com/assets/The-Healthcare-Playbook-April-2014.pdf

2. If you are covered?
If you must “play” and provide affordable, minimum value coverage:
□ What measurement period will you use to identify those employees who have obtained full-time status (130 hours a month average) who should be offered coverage? (6, 9 or 12 months)
□ What standard waiting period, or minimum hours of service before coverage begins will you follow? (generally must offer coverage within 90 days of full time status)
□ Do you have a form for those eligible employee who decline coverage to sign?
□ If you use a staffing company, decide who will provide health coverage, or pay the premiums, and consider including that agreement in a staffing contract addendum (Client Employer must “participate” in the offer of coverage or risk ACA penalty).

3. Is your Plan compliant?
If you must “play”:
□ Review plan(s) to confirm they satisfy minimum essential coverage rules (i.e. a “skinny plan” without hospitalization coverage will get you a fat penalty).
□ How will you calculate whether plan coverage is “affordable” (a generally if the employee only premium is less than 9.5% of the employee’s W-2 wages then the plan is affordable)
□ Have you considered adding to your Alabama BCBS coverage a wraparound secondary policy of insurance for your employees to cover all deductibles and co-pays recently offered by BCBS of South Carolina? 

4. Are you prepared for new 2014 W-2 Reporting?
□ Who in your organization will be trained to file all required reports and required information on employee 2014 Forms W-2?

5. Are your employees prepared to pay the approximate $325 tax per family member for being uninsured in 2015? 
□ On Nov. 15, 2014 open enrollment for 2015 begins at www.healthcare.gov

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter and contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with live links and downloadable checklist. IRS Circular 230 Disclosure: this column is for educational purposes only and does not constitute tax or legal advice and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.


Wednesday, November 5, 2014

Some Workplaces Going to Pot

By Tommy Eden



In Rhode Island on November 12, 2014, the ACLU filed a state court Disability Discrimination and violation of the Hawkins and Slater Medical Marijuana Act lawsuit on behalf of Christine Callaghan, a University of Rhode Island graduate student intern applying to work for pay and class credit at Darlington Fabrics Corporation. Christine was also was a lawful cardholder in the Rhode Island medical marijuana program since 2013.

The lawsuit alleges that Christine used marijuana to treat her migraine headaches and disclosed to a member of Darlington’s human resources department that she was a medical marijuana cardholder during her final interview. She was later called on a company speakerphone and told she would not be employed because she was a medical marijuana patient, according to the lawsuit. The Rhode Island Act grants employee discrimination protection to qualified card holders. The Act is found at G.L. 1956 Section 21-28-28.6-1. The Complaint completely ignores the issue that marijuana is illegal under federal law. The Case is Callaghan v. Darlington Fabrics Corp. in the Providence Superior Court.

As a side note, the New York Times ran a story on November 6, 2014, that George Soros’ Open Society Foundation gave a 50 million dollar gift to the ACLU to mount an eight-year political campaign across the country to make a change in criminal justice policies, a key issue in local, state and national elections.  Darlington is the first case in the country that the ACLU has filed such a claim to take up the cause of a medical marijuana cardholder. There are at least seven other states with exploit “status protection” to cardholders such as: Arizona, Connecticut, Maine, Nevada, Rhode Island, Delaware, Illinois, Minnesota, New York.

In the State of Michigan on October 23, the Michigan Court of Appeals issued a ground breaking consolidated decision in three unemployment compensation appeals that all concerned medical marijuana cardholders.

Jenine Kemp was employed by Hayes Green Memorial Hospital in Charlotte, MI, as a CT technician. The Hospital maintained a zero-tolerance drug policy and employees were pre-employment and reasonable suspicion drug tested. In May 2011, a patient complained that Kemp had inserted an IV line in the patient without using gloves, discussed the patient’s insurance coverage in a crowded area, and told the patient about her family’s drug use, including that she ate “special brownies,” according to court documents.
An investigation followed and Kemp was directed to take a drug test. Kemp wrote on the consent form that she used medical marijuana. During the investigative meeting Kemp showed no objective signs of intoxication but tested positive for marijuana in a confirmed test. Kemp was terminated by the hospital for failing the drug test.

Kemp later testified that she suffered from lupus, neuropathy, and chronic pain in her hand and she has first obtained a medical marijuana card in December 2010, which was valid at the time of her termination in May 2011. According to Kemp’s testimony, she was never under the influence of marijuana at work but used it between 6:00 p.m. and 7:00 p.m., and to her the effects were usually gone within two hours. She worked the Hospital’s 6:30 a.m. to 3:00 p.m. shift.

Kemp applied for unemployment benefits but was initially disqualified for testing positive for an illegal substance. However, the decision was overturned by a Michigan Administrative Law Judge (ALJ) when she produced her medical marijuana card. The ALJ explained that because marijuana was legally available to use for medical purposes, the issue was whether Kemp’s use of marijuana constituted misconduct or was illegal, and must include consideration of the Michigan Medical Marijuana Act (MMMA). Because Kemp used marijuana for medical purposes, the ALJ found that her use was lawful and did not bar her receipt of benefits.

The MMMA provides that qualifying patients “shall not” (1) be subject to arrest, prosecution, or “penalty in any manner” or (2) be denied any “right” or “privilege,” “including but not limited to civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau. . . .” On October 23, 2014, in a ground breaking decision, the Michigan Court of Appeals zeroed in on that language to find that the denial of the unemployment compensation benefits to Kemp, and two similarity situated Michigan employees, constituted an improper penalty for the medical use of marijuana under the MMMA. Most significant is the Appeals Courts acknowledgment that marijuana is an illegal drug under federal law but held that this was purely a state law issue. These combined appeal decision by the Michigan Court of Appeals is  Braska etal v. Department of Licensing & Regulatory, Unemployment Insurance Agency decided October 23, 2014.

Common Sense Counsel: so what is your employer survival plan as more states go to Pot? Try these 7 practical steps:
 1. Understand the laws on Medical Marijuana that are specific to states where employees report for duty;
2. Adopt a legally vetted pre-duty prescription medication and impairing effects substances safety policy that makes it all about safety;
3. Update employee job descriptions to cover critical safety sensitive issues;
4. Adopt an ADA complaint handbook policy on reasonable accommodations in those more difficult states that grant some level of employee status protections;
5. Let employees know your stance on Medical and Recreational Marijuana use;
6. Update your drug-free workplace policy and forms to stay in compliance and reduce the risk of claims and lawsuits; and
7. Stay tuned as this issue continues to create new employer challenges almost monthly.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3



Friday, October 31, 2014

Urine Drug Testing Latest ADA Battleground


By Tommy Eden



Laura Jones completed an application for employment at the Wal-Mart store in Cockeysville, Maryland and was told that she would have to take a drug test if offered a sales position. She told an assistant store manager that she had end stage renal cancer that prevented her from taking a typical urine test. Jones then went to the drug testing collection center and requested that an alternative specimen test be performed; which the center said could be done. She then took that information back to the store manager who refused to allow for the alternative specimen test and her application was closed for failing to submit to the urine drug test; according to the allegations of the lawsuit as reported in the EEOC Press Release.

On October 21 the Cockeysville Wal-Mart store entered into a consent decree with the EEOC, who had earlier allegedly in a federal court lawsuit brought on behalf of Jones, that the store had breached the Americans with Disabilities Act by failing to reasonably accommodate her disability by refusing to accept an alternative specimen test. Wal-Mart agreed to pay Jones $72,500 plus entered into a consent decree that provides for notice to applicants of alternative specimen testing for those persons "whose physical condition prevents them from producing urine" and who request some accommodation in the pre-employment drug screening process. The consent decree provided for a blood test as the alternative specimen that is rarely used in workplace drug testing.

Wal-Mart also agreed to provide 90 minutes of hiring manager training on the accommodation process and to post a mandated notice to all store employees. The case is the EEOC v. Wal-Mart Stores East, LP in the Baltimore United States District Court. The EEOC also has a pending case against Kmart involving an almost identical issue in Hyattsville, Maryland.

Common Sense Counsel: since 2001 the United States Department of Transportation has followed a shy bladder procedure found at 49 CFR Parts 193 & 195 of the DOT drug and alcohol testing regulations. This process is meant to differentiate a legitimate medical explanation for not being able to produce a urine specimen from those trying to beat a drug test.

The smart course of action for an employer faced with any drug testing issue is to use a well-qualified Medical Review Officer (MRO) to guide your decision-making. MROs are medical doctors educated on the DOT regulations; alternative specimen testing and can make the medical call for you. With this new ADA wrinkle the EEOC has thrown into the process by this consent decree, employers would be wise to develop a notice, written procedure and training for situations when an applicant like Laura Jones hands you an application and says, “sorry I can’t go.”

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3

Friday, October 24, 2014

Worker Misclassification: AL Department of Labor Tag Teams with Feds

By: Tommy Eden

Earlier this month the U.S. Department of Labor’s Wage and Hour Division and the Alabama Department of Labor signed a memorandum of understanding covering misclassification as something other than employees, such as independent contractors. The agencies committed to work together to cross report possible violations when discovered.

This Misclassification Initiative, with the stated goal of preventing, detecting and remedying employee misclassification, has already been signed with state agencies in California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

The DOL Wage and Hour Division reports on its website that in Fiscal Year 2013, investigations resulted in more than $83,051,159 in back wages for more than 108,050 workers in industries, such as janitorial, food, construction, day care, hospitality and garment.

Common Sense Counsel: Next time you are trying to decide how to properly classify someone, as an employee or an independent contractor, understand that the right to control the means and manner of performance is a key factor-with about 20 other factors to boot.  So ask yourself the following questions before you hire that person as a 1099 contractor and not an employee.

Does the business want to hire this individual as an employee to provide the same or similar services following a “test period” as an Independent Contractor?
Will the individual be required to devote essentially full-time hours to perform services for the business, making the individual unable to perform services for other customers during the performance period?
Will the individual be expected or required to perform essentially full-time work hours at the business or at facilities operated by the business?
Will the individual be required to comply with instructions from a business supervisor, as to where, how, and when the work is to be performed?
Will the business be responsible for hiring, supervising, and paying workers who will substantially assist the individual in performing the requested services?
Will the individual be paid on a recurring basis for a fixed amount?  (For example, will the individual be paid every month for several months for a fixed amount, instead of on a per project basis?)
Will the individual work as part of a team of regular employees and will the individual’s day-to-day participation be essential to the successful performance of the employee team?
Is the individual expected/required to perform work during hours that are set by a business supervisor?
Will the individual perform services for which the business is concerned with the methods used to obtain the results (and not just with the results)?
Will the business provide a significant amount of tools, equipment, or other materials needed by the individual to perform the agreed-upon work?

(Click here for an expanded checklist.)

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901 and follow on twitter tommyeden3

Friday, October 17, 2014

Most Dangerous Specimen of Employee Wins Again

By Tommy Eden



In September 2006, Edward Lane accepted a probationary position as Director of Central Alabama Community College’s Community Intensive Training for Youth Program, a program for at-risk youth in Alexander City, Alabama. Lane promptly audited the program’s finances and discovered that then state representative Suzanne Schmitz was listed on the payroll but was not reporting for work and not otherwise performed tangible work for the program. Schmitz lived in Madison County but refused to report for work at the Huntsville campus.

When Lane raised his concerns about Schmitz internally, College President Steve Franks warned him that terminating Schmitz’s employment could have negative repercussions for both Lane and the College. Despite these warnings, Lane terminated Schmitz’s employment for refusing to report to work.
Schmitz was eventually convicted of federal mail fraud and sentenced to 30 months imprisonment; 36 months of supervised release, 360 community service hours and pay back the $177,251.80 she received in public funds.

Within 90 days after Lane testified at Schmitz's first federal court trial, he was fired by College President Franks. Lane then filed a lawsuit claiming that his termination was in retaliation for his testimony given in the Schmitz case, in violation of his Free Speech First Amendment right.

On June 19, the United States Supreme Court held in a unanimous decision that Edward Lane should not have been denied First Amendment protection, and fired, for his subpoenaed testimony that was a matter of public concern. The high court then sent the case back to the 11th Circuit Court of Appeals on the equitable relief and damages issues.

On October 10, the 11th Circuit held that Lane may seek the equitable relief of reinstatement to his former position at Central Alabama Community College for the First Amendment violation. However, the Court did find that the 11th Amendment to the Constitution precludes an award of damages against the State of Alabama and the College President.

Common Sense Counsel: Edward Lane is a profile in courage whose 8 years of perseverance has been rewarded by the United States Supreme Court and now the 11th Circuit of Appeals. The Lane case deals with the most dangerous specimen of employee – the sacred (someone who engages in protected conduct then is retaliated against). Lane was a whistleblower and employers across America are playing millions in fines and verdicts every month to the Edward Lanes of this world. OSHA enforces 22 different whistleblower anti-retaliation federal laws from truck drivers to healthcare workers. Taking these 5 steps will help you avoid being the target of a whistleblower claim:

1) Prevent the whistle from being blown by putting in place ethics, no retaliation and harassment prevention policies in your handbook;

2) Regular training on your policies with documentation of attendance;

3) Conduct routine audits to tests compliance with polices;

4) Put in place a defensible reporting, investigative and response plan if allegations of wrongdoing surface; and

5) Praise the internal whistleblower instead of firing them.


Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Thursday, October 9, 2014

ACA Shoes Start to Drop for Part Timers

By: Tommy Eden



Wal-Mart, who once embracing the Affordable Care Act (ACA) exchange system, earlier this week notified its 30,000 part time associates, those working less than 30 hours a week, that it will be ending their group coverage January 1, 2015. It also began opening up enrollment kiosks staffed by licensed brokers of DirectHealth.com in 2,700 of its stores as a heath care shopping alternative.

With this move, Wal-Mart manages to cut the cost of insuring 30,000 of their employees by forcing them to either a subsidized ACA policy, or in some states that expanded coverage, on to Medicaid. Alabama chose not to expand Medicare coverage.

Target Corporation, Home Depot and Walgreens have already announced that they are dropping coverage for part time employees.

Wal-Mart also said insurance premiums for its other employees will be increasing in 2015 by $3.50 for a total of $21.90 per pay period.

Beginning in 2015, the ACA will require businesses with 100 or more employees to offer affordable healthcare coverage to employees who work at least 30 hours a week or pay a penalty. The same requirement will be extended in 2016 to businesses with 50 or more workers. No reprieve is on the current political horizon.

Another significant ACA issue for those who use staffing company employees, is recent ACA IRS interpretations that a Client employer must be able to prove that its staffing company employees were offered affordable health care coverage. For purposes of the pay-or-play mandate, when the Client is the common law employer, an offer of coverage made by the temporary staffing firm "on behalf of" the Client employer will be considered to be an offer of coverage by the Client employer. For an offer of coverage to meet the IRS test, the Client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm's group health care plan. For example, if the staffing contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company's coverage, the employer will not be considered by the IRS to have made an offer of coverage. This could lead to a Client employer penalty under the pay-or-play mandate's $2,000 per full-time employee "no coverage offered" if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.

Common Sense Counsel: Take these better late than never steps to protect your business from the looming ACA tsunami:
Step 1: “Strategically” decide to “Go or Stay Small”
Step 2: Count the Cost of non-compliance
Step 3: Update your employee handbook
Step 4: Give your employees a 2015 HSA
Step 5: Adopt a wellness plan
Step 6: Contractually Protect your Business
Step 7: Vote

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with expanded Common Sense Counsel and follow on twitter tommyeden3

ObamaCare: Top 5 steps every employer should consider now

By Tommy Eden, Constangy, Brooks & Smith, LLP





1) Step 1: “Strategically” decide to “Go or Stay Small”
Applicable Large Employers who have 50 FTEs must offer health coverage to all full-time employees or face fine.
Must correctly identify the "employer group" to correctly apply the rules (i.e., "who is the Employer" - IRS controlled group rules apply)
Go small by:
ü      contracting out distinct business functions (SWOT analyses)
ü      use Staffing Service
ü      break-up controlled group (within IRS Attribution Rules)
ü      reduce size of workforce
ü      sell your business
ü      sell parts of your business
ü      use part-time and variable hourly employees (still may be Applicable Larger Employer but no fines)

ü      solicit wise counsel so what you do will truly make a difference


2) Step 2: Count the Cost
show NFIB online calculator
http://www.nfib.com/advocacy/healthcare/credit-calculator
explain with example
what is your number?
then evaluate whether to play or pay - nondeductible $2,000 penalty for all FTE's -30 vs. anticipated cost of providing plan (make reasonable assumptions about who will take the plan if offered and how much cost will increase -- i.e., will a significant number really take the plan if offered, or will participation stay relatively stable).


3) Step 3: Update your employee handbook
full-time for ObamaCare mandate is 30 hours a week
coverage not mandated for part-time, temporary, seasonal and variable hourly employees so must obtain handbook in job classification information in the new hire packets (look-back measurement periods)
carefully review leased employee arrangements
confirm that independent contractors are really IC's and not EE's as improper classification can lead to big problems
providing other benefits not mandated for traditional classification of full-time but must specify such in your handbook and also benefit proration
benefit disclaimer language critical to allow quick pivots on benefit related issues
move benefits to separate explanation of benefits booklet and out of handbook
sole authority to interpret benefits eligibility and “bad boy” disqualification language can be most helpful
Plan Design Choices for Groups Under 50

o                   Keep everything “as is”. Cover issues like “grandfather rules” and notices that still apply in ACA.
o                   Purchase group insurance through the SHOP Exchange to qualify for the company tax credit.
o                   Change to a self insured group plan to avoid taxes (can go down to 10 participants).
o                   Terminate group plan but replace with a defined contribution amount for health expenses so employees qualify for Federal subsidies through the Federal exchange.


4) Step 4: Give your employees a 2015 HSA
moving to consumer driven healthcare
health savings account highly favored as best way to keep loyal employees
Example HSABank information http://www.hsabank.com/hsabank/employers
use Q&A materials from website
monthly payroll contributions
IRS has over 40 medically accepted expense categories
use a visa charge card or pay with a check


5) Step 5: Adopt wellness plan
start with a smoke-free campus, store or shop
individual health risk assessments
individualized wellness plans
rewards can be participatory v. contingent
Challenge goals with reasonable design
carrot and stick approach with incentives and penalties; can be up to 30% of total cost and 50% for smokers with measurable ROI
App-based wellness tracking www.wellworksforyou.com
written wellness plan covering privacy and compliance
know your alphabet: HIPAA, ADA, EEOC, GINA, DOL, IRS


6) Step 6: Contractually Protect your Business Another significant ACA issue for those who use staffing company employees, are recent ACA IRS interpretations that a Client employer must be able to prove that the staffing company employees were offered affordable health care coverage. For purposes of the pay-or-play mandate, when the client is the common law employer, an offer of coverage made by the temporary staffing firm "on behalf of" the client employer will be considered to be an offer of coverage by the client employer. For an offer of coverage to be "on behalf of" the client employer, the client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm's plan. For example, if the staffing contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company's coverage, the employer will not be considered to have made an offer of coverage. This could lead to exposure to the Client employer under the pay-or-play mandate's $2,000 per full-time employee "no coverage offered" penalty if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.



Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with expanded Common Sense Counsel and follow on twitter tommyeden3

Friday, October 3, 2014

DOT Reminder to Medical Review Officers (MROs) Verifying an Employee’s Prescription

As a reminder, when a donor provides a prescription for a non-negative laboratory test result, as the MRO, you are responsible for determining whether the medical explanation is legitimate.   

In your role as the “gatekeeper” in this process, you must review and take all reasonable and necessary steps to verify the authenticity of all medical records the employee provides (see 49 CFR Section 40.141(b)).  For example:

    Call the pharmacy to verify the legitimacy of the prescription; and
    Call the donor’s treating physician if you have suspicions or questions

In accordance with 49 CFR Sections 40.137(c), 40.139(b), and 40.145(e), the donor has the burden of proof that a legitimate medical explanation exists.  The donor must present information meeting this burden at the time of the verification interview.  You may extend the time available for the donor to present the information for up to 5 days.  If the donor fails to provide information you have requested (e.g., does not produce a prescription or does not facilitate the treating physician’s contact with you), you may proceed in making your determination.

Any time you make the determination to verify a laboratory positive result negative because of a legitimate medical explanation, you may have a responsibility to raise fitness-for-duty considerations in accordance with 49 CFR Section 40.137(e)(4) and 40.327.  In raising these concerns, you are only authorized to provide information learned through your verification interview with the employee’s employer, a physician or health care provider responsible for determining the employee’s medical qualifications under a DOT agency’s safety regulations, a SAP evaluating the employee as part of the return to duty process, a DOT agency, or with the National Transportation Safety Board during the course of an accident investigation.


DOL Signs Employee Misclassification Agreement with Alabama Labor Department



Officials of the U.S. Department of Labor’s Wage and Hour Division and the Alabama Department of Labor yesterday signed a memorandum of understanding to protect the rights of employees by preventing their misclassification as something other than employees, such as independent contractors. The memorandum of understanding represents a new effort on the part of the agencies to work together to protect the rights of employees and level the playing field for responsible employers by reducing the practice of misclassification.

The Alabama Department of Labor is the latest state agency to partner with the U.S. Labor Department.    In Fiscal Year 2013, WHD investigations resulted in more than $83,051,159 in back wages for more than 108,050 workers in industries, such as janitorial, food, construction, day care, hospitality and garment. WHD regularly finds large concentrations of misclassified workers in low-wage industries.    “Misclassification deprives workers of rightfully-earned wages and undercuts law-abiding businesses,” said Dr. David Weil, administrator of the Wage and Hour Division. “This memorandum of understanding sends a clear message that we are standing together with the state of Alabama to protect workers and responsible employers and ensure everyone has the opportunity to succeed.”   “Working with the states is an important tool in ending misclassification,” said Wayne Kotowski, the Wage and Hour Division’s regional administrator for the southeast. “These collaborations allow us to better coordinate compliance with both federal and state laws alike.”

“We are pleased to be able to partner with the U.S. Department of Labor in order to better serve all employers and employees in Alabama,” said Alabama Department of Labor Commissioner Fitzgerald Washington. “This sharing of information between agencies can lead to better benefits for and a better understanding of the law by employees, as well as serving to level the playing field for employers who are legitimately reporting their employees’ classifications.”  

Business models that attempt to change or obscure the employment relationship through the use of independent contractors are not inherently illegal, but they may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem. Independent contractors are often denied access to critical benefits and protections, such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance, to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.  

Memoranda of understanding with state government agencies arose as part of the department’s Misclassification Initiative, with the goal of preventing, detecting and remedying employee misclassification. California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington state agencies have signed similar agreements. More information is available on the Department of Labor’s misclassification website at

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.dol.gov_misclassification_&d=AAIGaQ&c=N-Mzp04sWREArlpZB5_L_Q&r=ZEuZR48vjp9Tl8Q-4go2YtOhZKqFsh9DeOFZnjD6q84&m=IW4lc-O7oPSe4iezVXyuILlcafP2fOOzGoUenqyxIw8&s=-yOjGb2sN-gn2qFMqROO_UEkbsDh94o-b2rMxCXJOI8&e= .

The Constangy offices in Alabama have work extensively with the General Counsel for the Alabama Department of Labor and you may direct any inquires you have about this new MOU to Tommy Eden at teden@constangy.com or 334-246-2901.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter @tommyeden3 

Wednesday, October 1, 2014

Colorado Supreme Court Gets Rocky Mountain High Issue

By: Tommy Eden



Brandon Coats was partially paralyzed in a car crash as a teenager, using a wheelchair, and has been a medical marijuana patient since 2010 when he discovered that using pot helped calm violent seizures and muscle spasms. Coats was a telephone call-center operator with Dish Network for three years before he failed a cheek-swab random drug test in 2010 and was fired. Dish Network has a zero-tolerance policy against using illegal drugs.

On Tuesday, the Colorado Supreme Court heard oral arguments in Brandon Coats’ case that may have major impact on marijuana and the workplace. Colorado voters first approved a constitutional amendment authorizing the use of medical marijuana in 2000. Marijuana for recreational use was approved by voters in 2012 and started being sold in retail shops in Colorado on April 1, 2014.

Twenty-three states and the District of Columbia now have medical marijuana laws. Washington and Colorado laws specifically state that employers do not  have to accommodate employees’ marijuana use. But other states such as Arizona, Nevada, New York, Minnesota, and Delaware grant various levels of protections to medical marijuana card holders from discrimination.

Additionally, the Supreme Courts for the states of California, Washington, and Montana have all ruled that an employer has no duty to accommodate the use of an “illegal drug” such as marijuana. The fact that marijuana remains a schedule one “illegal drug” under federal law has been critical in each ruling for the employer.

Coats brought his lawsuit against Dish under Colorado’s lawful off-duty activities law, which specifically says employers cannot fire people for doing something legal on their own time. Originally the law was enacted to protect cigarette smokers and multiple states have similar laws. Both the trial judge and Colorado Court of Appeals have already ruled against Coats “legal use” argument holding that as long as marijuana is illegal under federal law the state law does not apply.

During the Tuesday Colorado Supreme Court hearing the justices did little to telegraph how they may vote. Only six of seven justices will decide the case as one recused himself because his father sits on the Colorado Court of Approval. Each side was asked to draft a proposal opinion for the justices to consider. A ruling may be months away. A tie means that the Court of Appeals ruling for Dish stands.

Common Sense Counsel: So what should an employer who has employees assigned to work in a medical marijuana state do? Consider these 5 Steps an employer can take to successfully walk the workplace marijuana tightrope:

1. Understand the laws on Medical Marijuana that are specific to states where employees report for duty;
2. Adopt a legally vetted pre-duty prescription medication and impairing effects substances safety policy;
3. Update employee job descriptions to cover critical safety sensitive issues;
4. Adopt an ADA complaint handbook policy on reasonable accommodations in those more difficult states;
5. Let employees know your stance on Medical and Recreational Marijuana use;
6. Update your drug-free workplace policy and forms; and
7. Stay tuned as this issue continues to create new employer challenges almost monthly.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter @tommyeden3

Friday, September 26, 2014

Tip Credits Can be Complicated

By: Tommy Eden


Leonzo Alvarado, a car wash attendant for Five Towns Car Wash, Inc. ("Five Towns") in New York claimed that Five Towns improperly benefited from the Fair Labor Standards Act tip credit because he claimed three supervisors improperly shared in the tip pool. Alvarado also claimed the Five Towns violated the FLSA by failing to inform him that a tip credit would be applied to his wages. Employers may pay tipped employees as little as $2.13 an hour if the employee makes enough in tips to reach the $7.25 minimum wage, but employers must provide advance notice to employees.

The Federal District Judge was unable to find clear evidence that that the car wash failed to provide Alvarado with proper tip credits notice or that the 3 others persons included in the Tip pools were supervisors, and found that such were fact questions were jury issues. The case is Alvarado v. Five Towns Car Wash.

Common Sense Counsel: This is a great case to review DOL Tip Credit regulations.
Tipped employees are those who customarily and regularly receive more than $30 per month in tips. Tips are the property of the employee. The employer is prohibited from using an employee’s tips for any reason other than as a credit against its minimum wage obligation to the employee (“tip credit”) or in furtherance of a valid tip pool.

The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly received tips, such as dishwashers, cooks, chefs, and janitors.

Tip FLSA Credit Requirements. The employer must provide the following information to a tipped employee before the employer may use the tip credit:
1) the amount of cash wage the employer is paying a tipped employee, which must be at least $2.13 per hour;
2) the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25);
3) that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;
4) that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and
5) that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.

Dual Jobs are those when an employee is employed by one employer in both a tipped and a non-tipped occupation, such as an employee employed both as a maintenance person and a waitperson, the tip credit is available only for the hours spent by the employee in the tipped occupation. Knowing the regulations is your best tip to say out of court.


Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3