If you had asked me one month ago to predict the winner of the presidential election, I would have been wrong. Therefore, rather than make my own [ill-fated] predictions of the changes that await employers when PEOTUS takes office, I consulted my trusty Magic 8 Ball. Here’s what it predicted:
On Tuesday, November 22nd, a United States District judge in Texas issued a preliminary injunction that blocks the U.S. Department of Labor (DOL) from implementing a controversial rule that would have expanded overtime protections from going into effect, at least for now. The pending regulations were scheduled to go into effect on December 1, 2016 and would have more than doubled the salary level required for employees classified as exempt under the “White Collar” exemptions. The Department of Labor estimated if the new regulations went in to effect more than 4 million workers would now be eligible for overtime. The salary level is currently $455 per week or $23,660 per year. The new regulations would have increased that amount to $913 per week or $47,476 per year.
The lawsuit was filed by 21 states and a coalition of business groups. The judge found the state plaintiffs have established a prima facie case that DOL’s salary level under the final rule and the automatic updating mechanism are without statutory authority. The judge then granted a nationwide preliminary injunction that prevents the regulations from going into effect pending further decisions from the court.
The timing of this decision provides some relief for employers scrambling to make sure they were in compliance with the new regulations. However, since you were in the midst of looking at your exempt positions, it is a good idea to continue the analysis to make sure the employees you classify as exempt truly meet not only the salary level test, but the duties test as well. If you have questions as to how this decision may affect your business, please contact Nancy Cooper at email@example.com or 503.553.3174, or Diana Shukis at firstname.lastname@example.org or 206.816.1475.
When we last visited this topic, the proposed regulations revising the overtime exemptions were still very new. The regulations are due to go into effect on December 1 of this year. There has been legislation introduced to stop them from being implemented and court cases are pending. This article will remind you of the obligations, answer some additional questions that keep coming up and will bring you up to date on the efforts to stop the regulations from going into effect.
Service charges, administrative charges, surcharges, house fees—whatever you call those charges assessed for food and beverage service in restaurants and in hotels—the rules about how they need to be disclosed to guests and how they must be allocated are propagating. More and more cities, municipalities and other local legal bodies are taking on service charges in detailed laws, and we expect more to come.
Interest in this issue at all levels of lawmaking seems to be increasing as living wage/minimum wage raise efforts become more and more popular throughout the country. Many such efforts result in laws that also affect how service charges may be collected, distributed and how they must be disclosed to consumers. In other words, the locus for relevant law in this area has shifted significantly from the state to the county or city level.
For example, over the last couple years, the California cities of Emeryville, Los Angeles, Oakland and Santa Monica have each addressed service charges, either generally or in hotel-specific ordinances. An amendment to a New York state labor law, effective in 2011, included a requirement that all disclosures about service charges be in 12-point font that was stuck between a rebuttable presumption that a service charge is a gratuity and how to handle tips paid with credit cards.
It’s a good idea to keep an eye on legislative efforts to raise the minimum wage across the country because, as mentioned, sometimes other important things are added when the relevant laws are passed. We are developing resources to keep track of all these various and sundry city, county and state changes in this area and encourage all hospitality industry members to do the same.
Hospitality industry stakeholders who host sites for online reviews or rely on review sites such as Yelp, Trip Advisor, Urban Spoon, or Oyster, may take comfort in the recent Ninth Circuit decision regarding the liability of the publishers of those reviews. See Kimzey v. Yelp! Inc., No. 2:13-cv-01734 (U.S.D.C. Wash. Sept. 12, 2016). But, there is an argument to be made that the protections afforded under Section 230 of the Communications Decency Act (“CDA”) may be wearing thin. As the industry looks for more ways to leverage data harvested from online reviews, it is slipping out from the protective umbrella afforded to “passive hosts” of user generated content.
On Monday, July 25, 2016, the Seattle City Council unanimously voted to place Initiative 124 (“I-124”), entitled the “Seattle Hotel Employees Health and Safety Initiative,” on the November 2016 ballot. Many voters will likely not even bother to look beyond the title before casting their vote. But they should. There is much more to this initiative than the title suggests.
I-124 is comprised of five substantive parts, plus definitions and a “miscellaneous” section (containing perhaps the most important piece of the entire initiative – more on that in the following paragraph). Each of these parts has an admirable statement of purpose (e.g., “Protecting Hotel Employees from Violent Assault and Sexual Harassment”), and a slew of requirements that are allegedly aimed at achieving that purpose. But, as with the title of the entire initiative, each part contains language that prompts countervailing concerns.
Julianne Henley is a guest author and a member of GSB’s Cannabis, Hospitality, Travel and Tourism, and Intellectual Property Practice Group. You can reach Julianne at email@example.com or at 206.816.1375.
Brexit, the United Kingdom’s (UK) decision to leave the European Union (EU), is headline news. Brexit is already impacting trademark rights in Europe, including in the hospitality industry.
Regular readers of this blog will know that we have been following the development and implementation of the FDA’s new menu-labeling regulations with some interest. After multiple rounds of drafts and public comment periods, the agency now has issued its final guidance for compliance with the new rules. According to the FDA’s press release, the guidance is intended to respond to the most frequently-asked questions from business potentially subject to the new rules, and “differs from the draft guidance by providing additional examples and new or revised questions and answers on topics such as covered establishments, alcoholic beverages, catered events, mobile vendors, grab-and-go items, and record keeping requirements.”
Nevertheless, the final guidance does not appear to substantively change the prior drafts insofar as the hospitality industry is concerned. Perhaps most noteworthy to hotel owners and operators is that the FDA has maintained the position, described in the earlier draft guidance, that a hotel’s complimentary breakfast would not be considered food offered for sale and thus would not be subject to the menu-labeling requirements.
As before, that guidance comes with the caveat that it merely reflects the “current thinking” of the FDA and does not establish binding rights or duties. Thus, while the guidance may be called “final,” the agency’s “current thinking” could always shift as the regulations – which are set to take effect in May 2017 – begin to be enforced. Which might lead one to wonder, what’s in a label, anyway? Only time will tell.
One big trend in the restaurant industry is no-tipping policies, replacing the optional gratuity line on the bill with a “service included” mandatory charge or higher menu prices. After a number of successful restaurants having tried and failed to transition successfully to this model, the service-included model is not necessarily the future of the industry.
The PCMA Pacific Northwest Chapter’s May education program was held on May 18, 2016 at the Metropolist in Seattle, Washington. For those of you who attended, or did not attend the program, my presentation, “The Evolution of Contract Negotiations” is available below. The presentation covers a number of current hospitality group sales contracting issues, including some thoughts on the future of the group travel segment. A huge thanks to the PCMA Northwest Chapter for inviting me to attend.