Isn’t technology grand? Your friend picks up the coffee tab and, rather than fork over a 20-spot to cover the cost of your grande nonfat oat milk chai latte with two pumps of brown sugar syrup and extra vanilla sweet cream cold foam and caramel drizzle, you now simply whip out your smartphone, type a few characters into a peer-to-peer (P2P) payment app — utilizing a cute emoji to signify the purpose of the payment, of course — and you’re all square. These P2P apps have become more ubiquitous in everyday life, particularly following the COVID-19 pandemic when most establishments went cashless (and many consumers remain largely that way to this day). In fact, people have been known to unashamedly share their Venmo username seeking donations on signs during ESPN’s College GameDay show (though I am resisting putting mine into this article).

However, the rise in wage payments made via P2P pay applications, such as Zelle, Venmo, or CashApp, is starting to rear its head in employment issues. While these apps are quite handy for reimbursing your share of a dinner split among friends, they may be more troublesome for payroll purposes. Additionally, their use for paying employees may be fraught with heightened risk as compared to standard payroll processing programs or institutions.

Oregon statute (652.110(5) for those interested in that sort of thing) expressly provides that Oregon employers “may pay wages through an automated teller machine card, payroll card or other means of electronic transfer,” provided the employee expressly agrees to such method of payment, and the employee can “make an initial withdrawal of the entire amount of net pay without cost to the employee; or choose to use another means of payment of wages that involves no cost to the employee.” So, payments via these applications are seemingly valid so long as they do not cause the employee to incur fees and are voluntarily agreed to by them. However, other issues may arise for employers using these methods to pay wages.

Regardless of method of payment of wages, all Oregon employers still need to calculate the appropriate taxes and withholdings from each paycheck — and these P2P applications do not do so — as well as issue itemized wage statements. An employer may provide the required itemized statement in an electronic format, such as a PDF via email, only if the employee expressly agrees to receive the statement in such form. Oregon law requires employers to provide employees with a detailed itemized pay statement with each paycheck that discloses certain information, such as the date of payment, dates of work covered by the payment, pay rate, basis of pay, gross and net wages, itemized deductions, and regular and overtime hours worked with corresponding pay if applicable.

Proof of payment can sometimes be difficult as well for employers using a P2P application, as the recordkeeping for such payments on some of the apps is lacking or deficient for proving payments in court (which can be problematic if they are needed to combat a wage claim). It is imperative that employers establish that such payments are wages, and appropriate withholdings have been made from the wages, as detailed in the itemized statement that accompanies the payment. It is also important that employers clearly denote that the payment is an actual payroll payment, less applicable withholdings, as these apps are used for all sorts of other payments as well, so showing that the payment is payroll and not some other payment to the employee (personal loan, etc.) could be difficult if not clearly labeled.

Another issue can arise with respect to security and reversibility in case of error. Automated Clearing House (ACH) payments, the type typically used for paychecks issued via direct deposit, are secure, backed by consumer protection legislation, and can be traced and reversed. Conversely, P2P transfers are not protected and typically cannot be reversed by any third party.

A friend of mine has a typo in his Venmo username. He did not realize it before submitting the username and finalizing his account. If I type his name into Venmo to send him a payment, it will not go to him if spelled correctly (I must use the typo name). If money is accidentally sent to someone with a similar name as his (but spelled correctly), the likelihood of recovery of that money is small. However, with ACH transfers, incorrect or mistaken payments can be canceled or reversed under certain circumstances.

The method employers use to pay wages is crucial because violations of Oregon’s wage and hour law can carry draconian penalties that may far exceed the amounts of wages improperly paid. So, before you decide to utilize newer technology to pay wages, speak to a knowledgeable (and technologically savvy) employment attorney to ensure you maintain compliance with state and federal laws.

Sean Ray is a partner with Barran Liebman LLP. He advises and represents employers regarding a full range of labor and employment matters. Contact him at 503-276-2135 or sray@barran.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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There has been substantial discussion about religious accommodations over the past few months, largely stemming from vaccine mandates issued by government entities and private employers. This is largely unchartered territory for many employers that likely have not had to address a request for religious accommodation before.

Accommodations due to disabilities are more commonly encountered by employers, and thus are more commonly litigated, giving us a sense of how certain scenarios may play out in court. Religious accommodations, however, are not made so frequently. In fact, the seminal United States Supreme Court case dealing with the question of when an employer has to provide an accommodation on religious grounds – TWA v. Hardison – is from 1977.

Employee religious beliefs, practices and observances are entitled to protection under Title VII so long as they are sincerely held and provision of a reasonable accommodation would not pose an undue hardship on the employer. Previously, the most commonly requested accommodations based on religious reasons were schedule accommodations (so employees could observe the Sabbath) or dress code modifications to allow for religious clothing. Now, however, the most common requested religious accommodations have to do with vaccine mandates.

Importantly, with respect to objections to vaccine mandates, as the Equal Employment Opportunity Commission (EEOC) has noted, “social, political or economic philosophies, as well as mere personal preferences, are not religious beliefs protected by Title VII.” For example, an employee requesting an accommodation because of an anti-vaccination stance is not a religious belief and therefore receives no protection from Title VII. As such, there is likely more leeway to investigate and ask for additional information to gauge whether an employee’s request for an accommodation or exception to a mandatory vaccination policy is due to a sincerely held religious belief or not.

Sincerely held

As an initial point, employers are not tasked with playing “gatekeeper” to employees’ religious beliefs, and in many instances, the sincerity of an employee’s belief is usually not at issue. However, if the employer has information showing that the employee has acted in a manner inconsistent with his or her espoused religious beliefs, then that evidence factors into the evaluation of whether the employee’s religious beliefs are truly “sincere.”

The EEOC has listed its own factors that it believes could undermine an employee’s sincerity in his or her stated beliefs: “whether the employee has behaved in a manner markedly inconsistent with the professed belief; whether the accommodation sought is a particularly desirable benefit that is likely to be sought for secular reasons; whether the timing of the request renders it suspect (e.g., it follows an earlier request by the employee for the same benefit for secular reasons); and whether the employer otherwise has reason to believe the accommodation is not sought for religious reasons.”

In short, if an employer has an objective reason to believe the employee’s belief may not be sincere, the employer can ask for additional information prior to coming to a decision on the employee’s accommodation request. If, after gathering additional information, it is clear the proffered religious belief is not sincerely held, then the accommodation need not be granted by the employer.

Undue burden

Even if an employee has a sincerely held religious belief, an employer is not required to provide an accommodation for that belief if it would be an undue hardship for the employer. As the U.S. Supreme Court concluded in the TWA case, “To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.” Likewise, employers are not required to deviate from collective bargaining agreements or seniority systems in order to favor one employee over another based solely on that employee’s religious beliefs.

So how is an employer to know whether the accommodation would pose an undue hardship? As an initial consideration, in light of the TWA case, the standard for evaluating whether an accommodation on religious grounds is an undue hardship for an employer is lower than that of establishing an undue hardship based on disability accommodations under the ADA (that standard requires “significant difficulty or expense,” while the standard under Title VII is “more than de minimis”).

The EEOC provides some factors it believes should be considered in evaluating whether a requested religious accommodation is an undue burden on an employer, including whether “the accommodation is too costly; it would decrease workplace efficiency; the accommodation infringes on the rights of other employees; the accommodation requires other employees to do more than their share of hazardous or burdensome work; the proposed accommodation conflicts with another law or regulation; or it compromises workplace safety.”

In light of the COVID-19 pandemic and the reason behind these vaccine mandates in the first place (employee safety), considerations of religious accommodation to vaccine mandates focus on workplace safety issues; that is, would granting an accommodation to a vaccine requirement jeopardize the safety of fellow employees or customers (such as patients in a hospital or residents in a senior care facility)?

If a religious accommodation is denied due to safety concerns (or another reason leading to the conclusion that the accommodation poses an undue hardship), the employer should consider whether another accommodation exists that can be offered instead. And while the standard is lower than under the ADA, it would still behoove savvy employers to discuss any decisions to deny an accommodation with their favorite employment law attorney.

Sean Ray is a partner with Barran Liebman LLP. He advises and represents employers in labor and employment matters, including those related to COVID-19. Contact him at 503-276-2135 or sray@barran.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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The governor recently allowed the final county in Oregon to move into phase one of the reopening process following the COVID-19 lockdown. As various counties progress through subsequent phases, and more businesses are allowed to reopen (or business picks up), employers will look to bring back workers who were laid off or furloughed when doors had to be closed. Due to social distancing guidelines and capacity restrictions, many employers will not bring back all employees at the same time. If employers recall some employees, but not all, what considerations do they need to take into account to limit liability?

Determining whom to bring back first

Ordinarily, employers would follow the written policies and procedures they have in place, or a collective bargaining agreement, for recalling employees. However, only those employers that regularly lay off and recall employees likely have such written procedures. Because the COVID-19 stay-at-home orders and business closures happened swiftly, most employers probably laid off or furloughed employees for the first time and without a plan for recalling them. So, what are the factors that an employer should consider when faced with recalling a portion of its staff?

The main concern in recalling certain employees is discrimination based on some protected characteristic, such as age, race, gender or protected leave, to name a few. In order to lessen the likelihood of litigation, employers should stick to factors far removed from protected characteristics. One such factor is length of time with the company. Tenure is easily measured and provides no room for argument – one employee either has a longer tenure than another or he or she doesn’t.

Another consideration is that specific roles may be needed. As businesses slowly reopen following COVID-19, it’s plausible that all roles will not be needed at first. If one employee’s role is vital to the reopening process, then that person can be recalled before others in less vital roles.

Another factor is job performance, though it is more subjective than the other factors and fraught with “unfairness” arguments. Hopefully, employers have documented employees’ performances, both good and bad, so that those evaluations or disciplinary documents can provide some objective evidence for the performance-based decisions. Ultimately, employers will likely consider a combination of factors to determine whom to recall first.

What if an employee declines to return?

A problem some employers may face is that some employees may not want to return to work for one reason or another. Many lower-wage earners could be making more money through unemployment benefits – thanks in part to the extra $600 per week provided by the Coronavirus Aid, Relief and Economic Security (CARES) Act – than they would if they were to return to work. As such, some employees may be reluctant to return until those benefits sunset at the end of July. Still others may not want to return out of fear of catching the virus, or because of a lack of child care.

How an employer handles a refusal to return will depend on the reason the employee does not want to return. Fear of catching the virus alone, or the desire to use up the remaining CARES Act benefits, will generally not confer any special protections on employees, and their refusal to return can be treated as a resignation by the employee. However, employers would do well to engage empathetically with such employees to determine their concerns, and whether they can be mitigated through protective measures, such as face mask requirements, social distancing, and extra cleaning measures.

If, however, an employee expresses a fear of returning due to a pre-existing medical condition that makes him or her more prone to serious complications if he or she contracts COVID-19, then the person likely has protections under the Americans with Disabilities Act (ADA). In these instances, the employer should engage in an interactive process with the employee to determine whether a reasonable accommodation can be provided, such as working remotely (if the position allows tasks to be completed in such a manner) or a temporary leave of absence.

Furthermore, if an employee must stay home to care for a child who cannot be in day care, sports camps or summer school because of COVID-19 restrictions, then that leave may also be protected; any decisions should be approached cautiously. Keep in mind the protected leave afforded to employees under the Families First Coronavirus Response Act (FFCRA), as that leave may still be available for some employees.

The decision to recall some employees, but not all, can create potential liability. Employers unfamiliar with such practices would be wise to have their plans reviewed by knowledgeable legal counsel.

Sean Ray is a partner with Barran Liebman LLP. He advises and represents employers in various labor and employment matters. Contact him at 503-276-2135 or sray@barran.com.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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Recent headlines may have employers wondering whether federal law prohibits discrimination based on sexual orientation. Many employers are already familiar with Title VII of the Civil Rights Act of 1964, which is the federal law prohibiting discrimination based on a number of factors, including an individual’s “race, color, religion, sex or national origin.” The term “sexual orientation” does not appear in the text of the federal statute, which has led to much debate as to whether Title VII covers sexual orientation discrimination.

The scope of the term “sex” under Title VII has been fiercely debated since its enactment. The “because of … sex” language in the statute was initially interpreted as Congress’ intent to provide protection to women and prevent discrimination against them based on their gender. Early court decisions interpreted Title VII to include pregnancy discrimination as discrimination “because of … sex.” Appellate courts subsequently interpreted “because of … sex” to include males as well, and all sexual harassment claims. In 1998, the U.S. Supreme Court even ruled that same-sex harassment was a cognizable claim under Title VII when lower appellate courts believed it fell outside the law’s scope.

More recently, the Supreme Court expanded the definition of “because of … sex” to include gender stereotyping – treating people differently because they do not follow socially-constructed gender norms. For example, in the landmark Supreme Court decision in Price Waterhouse v. Hopkins, a female employee was passed over for partnership. Co-workers had described her as “macho” and instructed her to “walk more femininely, talk more femininely, dress more femininely, wear makeup, have her hair styled and wear jewelry” in order to exhibit less masculine traits to boost her chances of making partner.

Nevertheless, cases based on sexual orientation discrimination have been a different debate. Cases alleging sexual orientation discrimination have survived when the discrimination is framed as “sex stereotyping.” Meanwhile, claims based purely on “sexual orientation discrimination” have been denied by multiple courts as outside the scope of Title VII. Several appeals courts have held that Title VII does not cover sexual orientation discrimination.

However, on April 4, the U.S. Court of Appeals for the Seventh Circuit was the first federal circuit court to hold that Title VII does indeed cover sexual orientation discrimination. The case centered around a lesbian adjunct professor at a community college whose applications for a full-time position with the school were rejected on at least six occasions. In overturning the lower court’s dismissal and allowing the plaintiff to proceed with her claim, the Seventh Circuit reasoned that discrimination on the basis of sexual orientation is intrinsically the same as sex stereotyping, which the Supreme Court has already brought within the purview of Title VII.

Just a few weeks later, on April 18, the U.S. Court of Appeals for the Second Circuit re-examined its prior rulings on the issue in a case involving a skydiver who claimed he was terminated after disclosing his sexual orientation to a customer. In that case, the Second Circuit noted that it is bound by prior panel rulings of the Second Circuit, explaining that one panel of judges from the Second Circuit cannot overturn a panel decision by Second Circuit judges on another matter. In essence, the entire Second Circuit, referred to as “sitting en banc,” would have to overturn the precedent established.

While it remains to be seen whether the Second Circuit will follow the Seventh Circuit’s lead, it appears change is coming at the federal level, and with the circuit split, it is possible that the Supreme Court will agree to hear an appeal on this issue to settle the matter. Of course, since the judiciary’s function is to interpret laws written by Congress, the legislative body can always add sexual orientation language into Title VII if that is its intent. But to date, attempts to do so (or to enact new legislation, such as the Employment Non-Discrimination Act, or ENDA) have failed.

So, what should Oregon employers do? Oregon, like many other states, explicitly prohibits discrimination based on sexual orientation in its state antidiscrimination laws. So, even if employees are not protected under federal law at this point, Oregon state law does provide them with protection from discrimination. As is true for other employment laws, employers must apply the law most beneficial to the employee (which, in this instance, would be Oregon state law). Oregon employers’ policies should reflect those protections for employees, and employers should ensure that they investigate reports of sexual orientation discrimination or harassment promptly and never make decisions based on sexual orientation.

Sean Ray is a partner with Barran Liebman LLP. He advises and represents employers in labor and employment matters and disputes. Contact him at 503-276-2135 or sray@barran.com.

The post OP-ED: Sexual orientation discrimination law has courts split appeared first on Daily Journal of Commerce.

Earlier this year, a former “Raiderette” – the official name of an Oakland Raiders cheerleader – filed a lawsuit against the NFL team, alleging wage and hour violations. Several other cheerleading squads followed their lead. Several “Ben-Gals,” the cheerleaders for the Cincinnati Bengals, filed a similar suit; so did the “Buffalo Jills” – the cheerleaders for, you guessed it, the Buffalo Bills. The New York Jets’ “Flight Crew” is the most recent squad to join the pyramid.

Sordid details in the complaints reveal a somewhat shocking but perhaps not completely surprising culture among cheerleading in the NFL. One team of cheerleaders was forbidden from wearing panties under their practice or game attire or from having “slouching breasts;” another team was given etiquette lessons from how to wash “intimate areas” to how much to tip restaurant waiters. At least one team was also subject to the “jiggle test,” wherein the cheerleaders would do jumping jacks and their coaches and supervisors would scrutinize certain areas of their bodies.

While the rules regarding many of these issues apparently varied from team to team, one thing appears to be consistent: The cheerleaders were paid little, if anything, for the majority of work they performed. Much of the time spent practicing routines (estimated in one instance to be at least eight hours per week) and appearing at the multitude of mandatory functions (one squad was allegedly required to appear at somewhere between 25 and 35 unpaid community and charity events throughout the season) was unpaid, and fines for various violations of team rules (such as bringing the wrong colored pom-poms to practice or failing physique requirements) resulted in potentially unlawful deductions. In fact, at least one plaintiff alleges she made slightly more than $100 for an entire season of cheering (which, by the cheerleaders’ estimations would equate to a wage of mere pennies per hour).

Now, not every employer has guidelines dictating what its employees’ hair and fingernails must look like or how many bikini appearances the employees must make (and I am not encouraging you to do so here); however, these cheerleading lawsuits can serve as a reminder to all employers – not just professional sports franchises – of the importance of tracking all hours that nonexempt employees work, and compensating them. “Hours worked” entails the time during which an employee is on duty or at a prescribed workplace under the employer’s control. Employees must be paid for all hours they are “suffered” or permitted to work.

Oftentimes, it is pretty clear when an employee is performing work; however, sometimes it’s not. Employers often slip up on preliminary or subsequent activities – tasks that employees are sometimes forced to complete before clocking in or after clocking out. For example, courts have held that the donning or doffing of certain protective gear is compensable time and must be paid by the employer. Similarly, the preparation of a workstation, such as equipment maintenance (sharpening knives, restocking kitchen supplies, caring for police dogs, etc.) or startup of a computer are also hours worked and should be paid accordingly, even if such activities are performed before the employee officially clocks in or after the employee clocks out.

In the case of at least one of the cheerleading suits, changing into a uniform may be compensable because cheerleaders were forbidden from riding in a car in their uniform – thereby necessitating early arrival to games.

Additionally, time that cheerleaders spent practicing could be compensable. Time that employees spend attending employer-sponsored or employer-required training is generally compensable.

There is one exception to training being classified as hours worked: When 1, attendance at the training is outside of the employee’s regular work hours; 2, the attendance is voluntary (i.e., not subject to penalties for failure to attend); 3, the training is not directly related to the employee’s job; and 4, the employee does not perform productive work during the training session, the employee does not have to be paid for the time spent in the training.

Moreover, travel time may be compensable; not ordinary commute time, but travel to special events, such as the NFL Draft, may be “hours worked.” In general, travel time is compensable when it is part of the work day, such as driving from the office to an off-site meeting.

Employers would do well to remember what constitutes “hours worked” and pay employees accordingly, including overtime wages if the “hours worked” exceed 40 in a workweek, because a wage and hour lawsuit is nothing to cheer about.

Sean Ray is an attorney with Barran Liebman LLP, and advises and represents employers in labor and employment matters and disputes. Contact him at 503-276-2135 or sray@barran.com.

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Earlier this summer, the Oregon District Court invalidated Labor Department regulations that prohibited employers from collecting and redistributing employee tips among all employees, including traditionally non-tipped employees, even when the employer does not claim a tip credit under the Fair Labor Standards Act. An understanding of the FLSA’s requirements for compensating tipped employees is paramount to fully understand the ramifications of the court’s ruling.

The FLSA requires all employers to pay their employees at least minimum wage. However, the FLSA has an exception for tipped employees. The FLSA provides that the minimum wage requirement for tipped employees in most states – but not Oregon – can be met through what is called a “tip credit.”

A tip credit allows the tipped employee to be paid $2.13 per hour (rather than the full minimum wage rate) plus the additional amount the employee earns in tips, such that his or her total compensation is equal to or exceeds the federal minimum wage rate. If the tips are not enough to cover the difference between the lower $2.13 wage and federal minimum wage, the employer must supplement the wages so that the tipped employee makes at least the minimum wage.

Oregon, however, explicitly prohibits tip credits. Therefore, tipped employees in Oregon must be paid minimum wage, regardless of the amount of tips they receive.

The tip credit provision of the FLSA also provides that all tips received by an employee must be retained by that employee, unless that employee participates in a tip pooling agreement with other employees who customarily and regularly receive tips whereby the tips received by those employees are pooled together than divided amongst them.

Such customarily tipped employees include servers, bartenders, and bussers. Under this provision of the FLSA, tip pool agreements that also include kitchen staff – the so-called “back of the house employees,” such as cooks, dishwashers and janitors – are prohibited when the employer also claims a tip credit.

So, what about tip pooling agreements when no tip credit is claimed by the employer?

In 2010, in a case out of Portland, the Ninth Circuit addressed tip pooling agreements among all employees when a tip credit is not claimed by the employer. In that case, Cumbie v. Woody Woo Inc., the Portland employer paid its waitresses minimum wage and did not take a tip credit (consistent with Oregon law).

The employer maintained a policy that required its employees to pool tips and divided them among all employees, including dishwashers and kitchen staff. The plaintiff, a waitress, took umbrage with the policy and sued for the ability to keep 100 percent of her tips. The Ninth Circuit upheld the restaurant’s tip pooling agreement, holding that the FLSA limitation on tip pooling – that is, that only those employees who customarily and regularly receive tips may participate in tip pools – applies only if the employer is taking the tip credit toward minimum wage.

In 2011, following the Woody Woo decision, the DOL issued updated regulations concerning tip pooling under the FLSA. In those regulations, the DOL attempted to counter the decision in Woody Woo. The Ninth Circuit had determined that the FLSA did not impose any restriction on the use of employees’ tips when no tip credit is taken.

The DOL decided to fill the gap left in the statutory scheme by the Legislature’s “silence” on that issue. The DOL therefore issued regulations stating that “tips are the property of the employee whether or not the employer has taken a tip credit.”

The regulations further provided that tip pools can only include those employees who customarily and regularly receive tips, even if a tip credit is not used. Several restaurant and lodging associations and other interested parties (including a server) filed suit in the District of Oregon to challenge the validity of those regulations.

In Oregon Restaurant Lodging Association, et al. v. Hilda Solis, et al., the Oregon District Court held that the FLSA does not impose any restrictions on an employer’s use of tips when the employer is not taking a tip credit. Rather, the FLSA only imposes limitations on those employers who take a tip credit.

In cases where tip credits are taken, tips belong to the employee who received them absent a valid tip-pooling agreement only among those employees who customarily and regularly receive tips. In reaching its decision, the court determined that the Woody Woo case and the plain language of the FLSA left no room for DOL discretion in attempting to expand the reach of the FLSA through its regulations.

So, where does this leave employers whose employees receive tips?

Even though tip credits, which are permitted under federal law, are expressly prohibited by Oregon law entirely, Oregon law does permit tip pooling. This recent decision allows Oregon employers (as well as other employers who do not use tip credits) to enter into agreements with their employees to combine all tips received into a pool that is redistributed among all of the employee, even those who are not customarily tipped. Employers must be sure that all tip-pooling agreements are in writing and prominently posted in the workplace.

 Sean Ray is an attorney with Barran Liebman LLP, where he advises and represents employers, including restaurants, in labor and employment matters and disputes. Contact him at 503-276-2135 or sray@barran.com.

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Last month, a lawsuit was filed in Florida alleging that Darden Restaurants Inc. – the world’s largest full-service restaurant company with brands such as Olive Garden and Red Lobster – violated the Fair Labor Standards Act.

The suit, which was filed as a proposed class action and names two former employees as plaintiffs, alleges Darden failed to properly compensate employees under the federal law by forcing them to perform work while not clocked in, failing to pay overtime wages to employees who worked more than 40 hours in a workweek, and requiring tipped employees to perform nontipped “side work” (such as refilling condiments and rolling napkins) that effectively resulted in them earning less than minimum wage.

At this early stage of the litigation, it is unknown whether the class will be certified and whether it will include any Oregon employees or former Oregon employees of the named restaurants. Nevertheless, such lawsuits can serve as a good reminder to employers, particularly restaurateurs, about the importance of compliance with state and federal wage and hour laws. This can be determined through informal audits.

It is important to remember that where Oregon and federal law address the same issue and different standards are provided, the stricter standard – the one that favors the employee – is the one by which the employer must abide.

Under Oregon law, the time an employee spends performing preparatory and concluding activities that are integral and indispensable to the employee being able to perform his or her job is considered hours worked and must be compensated at the appropriate rate. For example, preparatory activities conducted by an employee that are necessary over the course of a work shift, such as counting a till or preparing a food station, should be compensated regardless of whether such tasks are performed on the clock.

Additionally, concluding activities, such as cleaning up a work station or shutting down equipment, also must be compensated regardless of whether the employee performed the tasks on the clock. In essence, employees need to be compensated for work they are required to perform, even if done off the clock.

Oregon employers, under both federal and state law, are required to pay their employees who perform work in excess of 40 hours in a workweek overtime pay for that work. The overtime rate is one and one-half times the employee’s regular rate of pay. Although certain employees are exempt from Oregon’s overtime requirements, most in the restaurant industry would likely not meet the statutory definitions.

The misclassification of employees as “exempt” or “salaried” is one surefire way to invite a lawsuit. It is good practice to evaluate employee job descriptions for exempt positions on a yearly basis to ensure that the employees’ job duties fall within the statutory ambit.

But Oregon employers should also be cognizant of differences between federal law and Oregon law, particularly in the restaurant business. While federal law lets employers take tip credits – that is, an employer may pay a tipped employee less than minimum wage if the tips received by the employee cover the difference – Oregon law forbids the practice. Therefore, Oregon employers must pay their tipped employees the statutory minimum wage, regardless of the amount of tips collected by the employee.

These are only some of the wage and hour issues that face Oregon employers. It is important to regularly conduct internal audits to ensure that the employer is compliant with applicable law, whether federal or state, and to speak with a knowledgeable employment attorney to address questions or concerns about the employer’s practices.

Sean Ray is an attorney at Barran Liebman LLP. He focuses his practice on representation of management in employment and labor law. He also is a registered patent attorney. Contact him at 503-276-2135 or at sray@barran.com.

The post Lessons from a lawsuit: wage and hour reminders from the Darden class action appeared first on Daily Journal of Commerce.

In April, the Wage and Hour Division of the U.S. Department of Labor unveiled a Fair Labor Standards Act enforcement initiative centered on restaurants in the Portland-metro area.

The focus of these audits is to reduce common FLSA violations, such as failure to pay employees minimum wage or overtime pay, and violations of child labor laws. A visit from a local Wage and Hour investigator can come with some hefty consequences if violations are discovered.

Between 2006 and 2011, the Portland office of the Wage and Hour Division found violations at nearly 80 percent of the restaurants it investigated and collected more than $3 million in back wages that were owed to more than 1,600 employees.

Restaurant employers may also be subject to civil penalties for each violation and – for willful violations – criminal penalties including fines and imprisonment. Separate from the Department of Labor’s administrative efforts, the specter of potential lawsuits also looms large as aggrieved employees have a private cause of action to recover penalties and attorney fees in addition to back pay.

And if the prospect of a significant financial hit is not enough, there is another component to consider: public image. The investigation information is posted into a database available to the general public on the Department of Labor’s website.

So, what type of violations will the Department of Labor look for during these audits? While officials have not divulged particular criteria, here are a few of the common violations cited in the department’s enforcement audits:

Failure to provide mandatory breaks

In general, restaurant employees who work shifts longer than six hours must be provided with a 30-minute meal period during which the employee is relieved of all duties. Although there are a few narrow exceptions to this rule, many restaurants will not qualify and must provide meal breaks to all employees.

But what if an employee does not want to take a meal break? Meal periods are not optional, except for one category: tipped food and beverage servers who are at least 18 and satisfy a strict set of requirements.

For a tipped server to properly waive a meal period, a request must be made more than seven days after employment begins, it must be in writing on a specific form, and the employee must be allowed to consume food during his or her shift while continuing to work, in addition to other requirements. So, while tipped servers at a restaurant may waive meal breaks in certain circumstances, all other employees at the same restaurant must be given meal breaks.

Additionally, all restaurant employees must be given paid rest periods for every four-hour segment of work performed, or major part thereof (i.e., more than two hours). For eight-hour shifts, employees are required to take two 10-minute rest periods during which they are relieved of all duties and fully compensated – one during the first half of the shift and one during the second half. These rest periods may not be added onto or deducted from an employee’s shift to reduce the employee’s overall work period.

Failure to pay employees for all hours worked

Restaurant employees must be paid for all hours worked. It probably seems obvious that this should include all time during which the employee is “on the clock,” but it also includes any work performed prior to the employee officially “clocking in.”

For example, an employee who is asked to stock or prep a work station before a shift must be paid for that time.

Misclassification of workers as “exempt”

Although it may seem easier to simply classify every employee as exempt, there is no faster way to run afoul of wage and hour laws. Only certain employees are “exempt” from statutory overtime pay requirements, and all restaurant employees must be paid at least the prescribed minimum wage.

Even restaurant servers who receive tips must be paid at least minimum wage exclusive of any tips received (tip credits are not allowed in Oregon). Non-exempt employees who work more than 40 hours in one workweek must also be paid overtime pay, even if paid on a salary basis.

Violations resulting from employment of minors 

As one of the last bastions of employment for minors, restaurants (particularly in the quick service sector) can sometimes find themselves on the wrong end of child labor laws.

Although the words “child labor laws” frequently conjure images of adolescents working 16 hours a day overseas in dingy factories for less than $4 an hour, this is not usually the problem faced by restaurants here in Oregon. Rather, restaurateurs are more likely to be cited for allowing a minor to use or clean a meat slicer or other bladed kitchen equipment deemed too dangerous for people younger than 18 to operate.

Employers must also follow different rules for minors when it comes to meal and rest breaks and maximum working hours per week. Minors’ meal periods, although subject to the same 30-minute requirement as everyone else, must be taken at different times than those age 18 or older. Also, rest breaks must be 15 minutes long, rather than 10.

Youths age 14 or 15 are required to take their meal breaks, regardless of the nature or circumstances of the job. They also are restricted on the times they can start and end their shifts, and the maximum number of hours they can work per day and per week. These numbers vary depending on whether school is in session.

But youths age 16 or 17, on the other hand, have only a maximum number of hours they can work per week, and no daily restrictions.

Wage and Hour laws are replete with traps for unwary employers, particularly restaurants. Restaurateurs should stay ahead of auditors and review Department of Labor policies and procedures (in consultation with an employment attorney well-versed in laws) before a knock comes at the door.

Sean Ray is an attorney at Barran Liebman LLP. Contact him at 503-276-2135 or at sray@barran.com.

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