On January 6, 2020, Governor Ned Lamont signed bipartisan legislation addressing rates of pay for restaurant workers. The Governor vetoed a previous version of the bill which would have applied retroactively and effectively ended the viability of approximately two dozen pending minimum wage lawsuits. The new law does not apply retroactively, allowing the pending minimum wage suits to proceed.

In Connecticut, restaurants are permitted to pay waiters, servers, bartenders, and busboys – employees who perform “tipped” work – less than the current $11.00 hourly minimum wage based upon a tip credit. Tips are meant to cover, if not exceed, the difference between “tipped” and “non-tipped” hourly rates. “Tipped” work includes directly serving patrons, while “non-tipped” work includes the myriad of other tasks central to operating a restaurant, such as cleaning and table setting. Kitchen staff generally performs “non-tipped” work, and should be compensated at or above the $11.00 hourly minimum wage.

Because of the inherent difficulty in tracking a server’s time spent on discrete “non-tipped” tasks, restaurants followed the “80/20” rule, where if an employee spent at least 80% of his or her time on service tasks, the restaurant could pay the “tipped” hourly wage for the duration of the shift. (The 80/20 standard is derived from the federal Fair Labor Standards Act, which currently provides a significantly lower minimum wage than Connecticut). Connecticut previously adopted the 80/20 standard by regulation.  Whether an employee can be paid the lower “tipped” wage has focused on the 80/20 standard, with litigation focusing on whether employees claiming that they should have been paid at the higher “non-tipped” rate performed “non-tipped” work for more than 20% of the time.

The new law repeals Connecticut’s 80/20 regulation, and asks that industry representatives, employees, and other stakeholders comment on a replacement rule or standard by April 1, 2020. Whether the new regulation formally adopts the 80/20 rule, or some other formulation, remains to be seen. Commentators expect that, no matter the new rule, it will provide greater clarity than the previous scheme.

The bill also provides for the Connecticut Department of Labor to hire additional wage and hour investigators, and conduct seventy-five random audits a year to ensure that restaurants comply with the still to be determined new rules.

Finally, the bill makes it more difficult for employees to assert their claims as part of a class action. Specifically, plaintiffs will have to demonstrate that the putative class “performed nonservice duties . . . for more than a de minimis amount of time, that were not incidental to service duties” and that plaintiffs’ improper compensation resulted from the performance of “nonservice duties.”  Whether this will result in fewer class actions in the hospitality industry remains to be seen, because courts will still have to determine whether the non-service work was “de minimis,” which is itself a vague standard.

To discuss the impact of this legislation on your restaurant’s record keeping and payroll practices, please contact any member of the Murtha Labor and Employment team.

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Photo of Salvatore G. Gangemi Salvatore G. Gangemi

Salvatore G. Gangemi, a partner at Murtha Cullina, is a veteran labor and employment lawyer with nearly 30 years of litigation and counseling experience.

Employers from across the industry spectrum, including established companies in the senior living and health care fields; manufacturing, construction…

Salvatore G. Gangemi, a partner at Murtha Cullina, is a veteran labor and employment lawyer with nearly 30 years of litigation and counseling experience.

Employers from across the industry spectrum, including established companies in the senior living and health care fields; manufacturing, construction, retail and service firms; and emerging companies, seek Sal’s legal counsel to navigate today’s complex local, state and federal employment laws. His practice includes resolving disputes; advocating in courts and before administrative agencies; counseling on employment-related issues arising from acquisitions; and guiding clients in both long-range strategy and day-to-day administration of their workplaces and employees.

At the federal level, Sal brings extensive experience in OSHA investigations, audits and proceedings; the Fair Labor Standards Act (FLSA); Title VII discrimination matters; the Age Discrimination in Employment Act (ADEA); the Americans with Disabilities Act (ADA); and the Family Medical Leave Act (FMLA). He is also well-versed in state and local employment regulations.

Sal regularly represents clients in matters before the Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor and other federal agencies. On the state level, he appears before the New York State Division of Human Rights; the New York City Commission on Human Rights; the Connecticut Commission on Human Rights and Opportunities; the Connecticut Department of Labor; and the New York State Department of Labor. He has litigated cases involving misappropriation of trade secrets, restrictive covenants, breach of employment contract, fiduciary duty and other work-related common law claims.

Clients rely on Sal’s advice on routine human resources matters that arise in their businesses, including requests for reasonable accommodation for those with disabilities, family and medical leave issues, hiring and termination, and wage and hour concerns. Known for his proactive approach to identifying issues before they escalate, he conducts compliance training on sexual harassment prevention and other topics, performs worker classification practice and policy audits, and drafts employment policies and agreements. Sal shares his knowledge of the ever-evolving employment law landscape by speaking at events, conducting continuing legal education seminars and writing articles for a variety of publications.