While new laws regarding Paid FMLA and Sexual Harassment Training have been receiving the majority of the press on the most recent legislative term at the General Assembly, one bill that passed in the waning hours will have a significant impact for restaurants in Connecticut.
House Bill 5001, which awaits the Governor’s signature at the time of this post, eliminates a key labor regulation that has served as the basis of several wage & hour class actions. The longstanding regulation suggested that restaurants with waitstaff performing non-service work during their shift (such as cleaning a restroom) might lose the tip credit that allows those employees to be paid less than minimum wage because the waitstaff should only be performing “service” duties when being paid at this lower rate.
The new measure is effective from the date of its signature and will also apply to all pending lawsuits too; this could have a significant impact on several class actions that have been filed in the last year or two against various restaurant groups.
The bill also requires the Connecticut Department of Labor to develop new regulations by the end of the year and consider using new USDOL guidance when doing so.
The USDOL guidance is important because it “no longer prohibits an employer from taking a tip credit based on the amount of time an employee spends performing duties related to a tip-producing occupation that are performed contemporaneously with direct customer-service duties or for a reasonable time immediately before or after performing such direct-service duties.”
Restaurants that use waitstaff to service tables in their establishments ought to take a fresh look at the duties performed by the employees and whether this new law will impact them.
Restaurants should further consult with their local counsel as soon as possible to talk about the implications and nuances of this new law as well.