DOL Proposes Revised Wage-Hour Regulations (Part II)
A few weeks go I reported on proposed revisions to regulations under the Fair Labor Standards Act and the Portal-to-Portal Act of 1947. The regulations promise to revise rules that "have become out of date because of subsequent legislation or court decisions."
Now, having had a chance to review the proposed regulations, my colleague Mark Beutler and I have prepared a client alert that summarizes the proposed changes.
For the most part, the proposed revisions are unremarkable. Two changes to the "tip credit" rules caught my eye, however. First, a proposed regulation, 29 C.F.R. § 531.59(b), would provide that an employer is ineligible to take the tip credit unless it has informed its employees that it "intends to treat tips as satisfying part of the employer’s minimum wage obligation", and that the notice need not be in writing. While the FLSA requires that tipped employees be informed of the provisions of 29 U.S.C. § 203(m) before the employer can pay the reduced tipped wage, there are currently no regulations prescribing the content of the tip credit notice. The proposed rule would seem to mean that hanging a standard FLSA poster that contains an explanation of the tip credit rule would not suffice unless the employer has separately informed employees of its intention to treat tips as satisfying part of its obligation to pay the minimum wage. This proposed rule seems silly -- employees are smart enough to read a poster and figure out that their employer is taking a tip credit even if their employers haven't expressly informed them of this.
Second, the proposed regulation amends 29 C.F.R. § 531.54 to clarify that section 3(m) of the FLSA does not impose a maximum tip pool contribution percentage. Currently, Wage and Hour opinion letters and its Field Operations Handbook provide that a tip pooling arrangement cannot require employees to contribute a greater percentage of their tips to the tip pool than is "customary and reasonable." The Department took the position that "customary and reasonable" equates to fifteen percent (15%) of an employee’s tips or two percent (2%) of daily gross sales. See, e.g., Wage and Hour Opinion Letter WH-468 (Sept. 5, 1978). Several courts rejected the Department’s maximum contribution percentages on the ground that "neither the statute nor the regulations mention [the ceiling on the tip pool contribution stated in the Department’s interpretation] and the opinion letters do not explain the statutory source for the limitation that they create." E.g., Kilgore v. Outback Steakhouse of Fla., Inc., 160 F.3d 294, 302-03 (6th Cir. 1998). Indeed, the 15% rule makes little sense when the tipped employee receives substantial assistance from other employees in the tip pool. For example, in a restaurant in which the servers take the food orders, but the food is delivered by runners, and the tables are cleaned by bussers, there is no logical reason why servers cannot be required to share more than 15% of their tips with others in the tip pool. On this point, the revised regulations make sense.
Comments to the proposed regulations must be received by DOL by September 11, 2008.
On August 12, 2008, fifty-nine (59) foreign nationals illegally working at 
Mills Manufacturing Corporation (“MMC”) were arrested in North Carolina by U.S. Department of Homeland Security, Immigration and Customs Enforcement (“ICE”)'s agents. The arrests were based on a “critical infrastructure” investigation carried out by ICE which revealed that illegal aliens had used fraudulent social security numbers to obtain employment.
Delburt Richburg, assistant special agent-in-charge of the ICE Office of Investigations in Charlotte, stated that "When individuals use fraudulent social security numbers to get jobs, they hide their true identity and history. We need to know who is working on our critical infrastructure sites." All of those arrested today were transferred to the Henderson County Sheriff's Office for immigration processing. All have been placed into removal proceedings for being in violation of U.S. immigration law. At this point, no criminal charges have been presented against the arrested foreign nationals. The investigation, however, still continues. Among the arrested, were nationals of Mexico, Guatemala, Ecuador and Honduras.
On July 29, 2008, the owner of a Florida painting company pleaded guilty to 
one count of harboring illegal aliens in violation of the Immigration and Nationality Act (See United States v. Tinoco-Tinoco, M.D. Fla., No. 3:08-cr-00133-HLA-MCR, plea entered 7/29/08). Ruben Tinoco-Tinoco was indicted in the U.S. District Court for the Middle District of Florida in April following the arrests of 34 illegal aliens at various residences in Jacksonville (2 WIR 268, 5/5/08 ). According to the plea agreement, 29 of those aliens said they worked for Tinoco-Tinoco at Taurus Painting Inc., in Jacksonville, Fla. 
An Immigration and Customs Enforcement-led investigation revealed that from February 2007 through March 2008 numerous alleged illegal aliens were picked up at residences and driven to worksites in cars owned by Tinoco-Tinoco or his business, ICE said. Tinoco-Tinoco faces a maximum sentence of 10 years in prison and $250,000 in fines. In addition, under the terms of the plea agreement, Tinoco-Tinoco agreed to pay $50,000 and surrender two houses in forfeiture. "The recruitment, harboring and transportation of illegal aliens are very serious crimes that we will simply not tolerate," Robert Weber, special agent in charge of the ICE Office of Investigations in Tampa, said in a July 29 statement. "My office devotes significant resources to identify, prosecute and incarcerate these criminals and is determined to continue identifying and shutting down vulnerabilities to our immigration system such as harboring illegal aliens," Weber said. 
The U.S. District Court for the Middle District of Florida certified as the 
class all migrant and seasonal agricultural workers employed on a "piece-rate" basis at the Florida operations of Ag-Mart Produce Inc. from June 1, 2005, through July 31, 2006. On July 18, the federal district court certified a plaintiff class of Mexican agricultural workers who sued a Florida tomato grower for allegedly paying them less than minimum wage (Mesa v. Ag-Mart Produce Inc., M.D. Fla., No. 2:07-CV-47-FtM-34DNF, class certified 7/18/08). Piece-rate tasks included laying plastic, irrigation, planting, staking, tying, picking, and removing plastic and stakes after harvest, according to the six-page order signed by Judge Marcia Morales Howard. The order adopted the March report and recommendations by a magistrate judge that the class of potentially 3,000 plaintiffs be certified on counts contained in a 2007 civil complaint alleging that the company routinely paid the workers less than the minimum wage mandated by the Fair Labor Standards Act and the Florida Minimum Wage Act. The defendant company, which operates as Santa Sweets Inc. in its grape tomato growing operations in Florida, also allegedly 
violated the recordkeeping, wage statement, and payment provisions of the Migrant and Seasonal Agricultural Worker Protection Act, according to the lawsuit filed by attorneys for the Migrant Farmworker Justice Project. The lawsuit, with 177 named plaintiffs, also alleges minimum wage violations of the FLSA but does not seek class certification, as that law provides its own statutory framework for collective actions, the magistrate's report noted.
On August 8, 2008, USCIS issued a statement informing the public that the 
new U.S. Passport Card may be used in the Employment Eligibility Verification form (I-9) process. USCIS also stated that "...last month, the Departments of State and Homeland Security announced that the new passport card was in full production. The new card provides a less expensive and more portable alternative to the traditional passport book, and will expedite document processing at United States land and sea ports-of-entry for U.S. citizens traveling to Canada, Mexico, the Caribbean, and Bermuda. While the new card is .jpg)
more limited in its uses for international travel 
(e.g., it may not be used for international air travel), it is a valid passport that attests to the U.S. citizenship and identity of the bearer. Accordingly, the card may be used for the Form I-9 process and can also be accepted by employers participating in the E-Verify program." USCIS states that the passport card is considered a “List A” document that may be presented by newly hired employees during the employment eligibility verification process to show work authorized status. “List A” documents are those used by employees to prove both identity and work authorization when completing the Form I-9. 
On July 31, 2008, the House approved "H.R. 6633" to extend E-Verify, the federal government's electronic employment verification system, by five years. In spite of the many signs previously given by U.S. Representatives approved without amendment, HR 6633 or the Employee Verification Act of 2008, 407-2. 
the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 to extend the life of the voluntary program five years to Oct. 31, 2013. U.S. representatives initially supported legislation to scrap E-Verify in favor of a new mandatory verification system, but according Giffords, she introduced a five-year extension to make time for more study of the current system. Further, Giffords told lawmakers during House floor remarks that "within five years or less, the federal government must develop a mandatory system that operates uniformly across all 50 states." Technically, the bill would 
authorize two Government Accountability Office studies about aspects of E-Verify. The first study would examine erroneous tentative nonconfirmations under E-Verify, specifically focusing on the causes of erroneous tentative nonconfirmations, processes to remedy errors, and the impact of such errors on individuals, employers, and federal agencies. The second study would analyze the effect of E-Verify on small businesses and other small entities using the program. That study would focus on the cost to small entities of complying with E-Verify, an estimate of the number of small businesses participating in E-Verify, an analysis of compliance requirements such as reporting and recordkeeping, and steps DHS can take to minimize the economic impact of participating in E-Verify. 
allow additional time to design a fair and effective employment verification system is a workable proposition for employees and employers alike. The bill now moves to the Senate, which is in recess until Sept. 8, 2008. 
The House subcommittee approved a bill that would allow the "recapture" of previously 
unused employment-based visas. The bill ("H.R. 5882"), introduced April 23 by Rep. Zoe Lofgren (D-Calif.), chairman of the subcommittee, and Rep. F. James Sensenbrenner Jr. (R-Wis.), was approved on July 31, 2008 during a markup session. Eight Democratic representatives approved the bill. The bill now moves to the House Judiciary Committee for consideration. The objective of the bill is to amend the Immigration and Nationality Act ("INA") to recapture visas that were authorized between fiscal year 1992 and 2007, but went unused due to bureaucratic delays. The bill prevents visas from being lost in the future by rolling them over to the following fiscal year. The visa recapture applies to both employment-based visas and family-based visas. 
Rep. Lofgren stated that "H.R. 5882 is about ensuring that bureaucratic 
inefficiency and waste do not stand in the way of U.S. citizen families and businesses trying to use our immigration system in a legal way." The bill does not change the present number of available visas and does not add visas to caps. What the bill does is find visas lost due to "bureaucratic inefficiency." If the bill eventually becomes law, it would mean that approximately 557,000 additional or "lost" visas would be available for use. It would appear that a broad coalition supports the bill. Such law could have a very positive effect on Florida, but immigration reform would still be needed to affect its economy. 
The U.S. Department of Labor proposed 
The EEOC has issued a 
An employee who was exposed to pornography involving a co-worker on three separate occasions stated a claim for a sexually hostile work environment under Title VII, according to the Eleventh Circuit Court of Appeals in an "unpublished" opinion released last week, 