Alyssa Lopez

ILR 505
Project #2
November 30, 2009

This particular fact situation deals with recommendations given by a

compensation consultant that a certain restaurant has to follow. The first recommendation

says to keep accurate wage and hour records and to retain them for at least one year.

Although this is a good way to keep all records together and up to date, the restaurant

should maintain wage and hour records for at least three years. This will keep the

restaurant safe and prepare it for any legal issues involving employees and their records.

The second recommendation says to pay table servers $2.13/hr and require them

to share their tips with other employees. Employers can pay tipped employees $2.13/hr if

the employees are informed, if they individually or collectively retain all of their tips, and

if their pay plus tips equals at least the minimum wage. If employee’s tips do not add up

to minimum wage, employers must make up the difference. Pools are legal, however they

should include only those employees who customarily participate in the sharing of tips

and not people unrelated to the services provided.

The third recommendation requires employees to pay for their own uniforms and

deduct the cost from their paychecks. With employees’ consent, certain deductions can be

made from their paychecks for items such as employee contributions to insurance plans,

union dues, and savings plans. Although these deductions do not affect compliance with

the Fair Labor Standards Act, employers are not free to charge employees for items that

primarily benefit the employer such as uniforms or the laundering of uniforms. It is

known to be illegal and unethical when the effect of such deductions would push an

employee’s hourly wage rate below minimum wage.

Another recommendation that must be followed by the restaurant is to increase

productivity by reducing meal periods (unpaid) from one hour to twenty minutes and

eliminate all other breaks. This could cause problems with certain workers who have

been employed for a long time before these new rules were made. If employees are used

to having multiple breaks and an hour each workday for meals, things could get

complicated. If the restaurant manager informs each employee on the new rules and

conditions then it is considered ethical and should not face any legal issues.

The next recommendation says that since it should only take half an hour to clean

up after the restaurant closes, don’t pay employees for any more time than that. To limit

unwanted hours of work and overtime liability, employers should communicate and

enforce policies prohibiting employees from working outside of assigned work hours

without prior authorization. The employer should not ignore employees starting work

early, staying late, or coming in on scheduled days off. They should not assign work or

set deadlines that require work outside of work hours and they should not pressure or

allow employees to underreport work hours. If these are all followed, it is legal and

ethical to implement this recommendation.

Another recommendation requires that any non-exempt, full-time employees who

work over eight hours a day to take that time off later in the same workweek. A

workweek is defined as the basic unit of time for determining compliance with both the

Fair Labor Standards Act minimum wage and overtime requirements. The workweek is

known as any fixed and recurring period of seven consecutive days and does not
necessarily correspond to the calendar week or begin at the start of the workday. It does

not matter how many hours an employee works on a particular day but the issue is the

number of hours actually worked in the workweek. Implementing this particular rule

could cause problems if the employee is unwilling or if accurate records are not taken.

Employers usually rearrange hours within workweeks such as a long day followed by a

shorter day or a day off in the same workweek. This action is taken by most employers to

avoid incurring overtime liability.

The next recommendation says to not worry about paying overtime to shift

supervisors because they are paid a weekly salary. Employers have to pay at least one and

one-half times an employee’s regular rate of pay for each hour worked in excess of forty

in a workweek under the Fair Labor Standards Act. The act does not limit the number f

hours employees can be required to work but gives employers a financial incentive to

limit overtime because those hours of work must be compensated by a premium. This

premium is expressed in terms of an employer’s regular rate of pay. If the employee is

paid a weekly salary for a fluctuating numbers of hours, the regular rate would be the

weekly salary divided by the number of hours actually worked each week. Under the Fair

Labor Standards Act, this recommendation would be illegal and unethical to implement

in the restaurant.

The last recommendation given by the compensation consultant is to prevent

work from interfering with employee’s studies, limit minors (under 16) to no more than

eight hours a day during the school year. Employers must verify that young employees

are old enough to employ. They must not use employees under eighteen years of age for

certain dangerous jobs. People sixteen and over can be employed at all other jobs but
those who are fourteen and fifteen years old can be used for a range of retail and service

jobs. While school is in session, employers must not permit minors, sixteen and under, to

work during school hours, more than three hours a day, more than eighteen hours a week,

and outside the hours of 7 A.M. and 7 P.M. When school is not in session, employers

must not permit minors to work more than eight hours per day and forty hours per week.

This suggestion is ethical and does not violate any act or law.