Employer favored ruling provides sigh of relief and good lessons on the importance of documentation!
The Eastern District of New York recently ruled in favor of a transportation provider employer whose pay practices were challenged. In Ellis v. Common Wealth Worldwide Chauffeured Trasp. of NY, LLC, 2012 U.S. Dist. LEXIS 40288 (E.D.N.Y. Mar. 23, 2012) the plaintiff-employee claimed that the defendant violated his employment rights by 1) auto-deducting the employee’s 30 minute meal period and 2) excluding gratuities from the regular rate of pay when calculating overtime.
While the FLSA itself does not require employers to provide meal periods, many states do have meal period requirements. The plaintiff in Ellis claimed that since New York has a meal period requirement, the defendant’s practice of automatically deducting 30 minutes from his timesheet was illegal. The Court was offered no evidence by the plaintiff that he had worked through lunch – entitling him to pay for the 30 minutes – or that he was forced to forego his lunch period. Further, the employer’s policy that employees notify management should they work through lunch and the plaintiff’s signed acknowledgement of such policy, combined with the above-mentioned lack of evidence left the plaintiff’s claim invalid.
The second issue the Court analyzed in Ellis was based on the plaintiff’s claim that the employer was required to include gratuities into the employee’s regular rate of pay for overtime computation. The plaintiff’s argument was based on the premise that the employer’s “suggested” gratuity of 20% resulted in gratuities being more analogous to commissions- which must be included in the regular rate of pay – than tips, which are excluded from the regular rate. Applying both the FLSA and New York Labor Law the Court found that the suggested gratuity was merely a suggestion – which was evidenced by customers remitting various rates of gratuity – and therefore, did not need to be included in the regular rate of pay for overtime calculation.
Here are some questions employers should ask themselves:
- Does your company auto–deduct lunch or break periods?
- Have you instructed employees of the appropriate procedure should an exception occur?
- Do you have proof of your policy’s distribution?
- Do you have solid records that can help defend you against wage and hour claims?
Does your organization need help with _______?
Compliance audits
Time and attendance systems
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Somer V. Jefferiss, Esq, PHR is a Legal & Labor Consultant. She can be contacted at svail@datamaticsinc.com or 1-800-673-0366 ext. 218.
