WASHINGTON – The U.S. Department of Labor has announced a proposal to rescind the final rule “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption.” The final rule has been in effect since Jan. 8, 2021. The Federal Register will publish the proposal on Nov. 9, 2021. Rescinding this rule would have the effect of returning department policy and practice to those that were operative during the presidencies of George W. Bush and Barack Obama.

Enforced by the department’s Office of Federal Contract Compliance Programs, Executive Order 11246 prohibits federal contractors and subcontractors from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin. The order contains a religious exemption for certain religious corporations, associations, educational institutions and societies with respect to the employment of individuals of a particular religion. The EO 11246 religious exemption is based on the religious exemption in Title VII of the Civil Rights Act of 1964. When analyzing potential discrimination under EO 11246, OFCCP follows the principles of Title VII, which prohibits employers from discriminating against applicants and employees on the basis of race, color, religion, sex (including pregnancy, sexual orientation and gender identity), or national origin.

The final rule that took effect on Jan. 8, 2021 departed from OFCCP’s long-standing policy and practice of applying Title VII principles and case law to interpret the exemption. OFCCP’s proposed rescission would preserve EO 11246’s religious exemption which would still be available to qualifying contractors. The proposed rescission would ensure that the EO 11246 religious exemption is applied consistent with principles and case law interpreting the Title VII religious exemption.

“The Office of Federal Contract Compliance Programs’ proposed rescission would protect against discrimination and safeguard principles of religious freedom. With this proposal, OFCCP would simply return to our policy and practice of considering the facts of each case and applying Title VII principles and case law and other applicable law,” said Office of Federal Contract Compliance Programs Director Jenny R. Yang.

In addition to EO 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws, as amended, make it illegal for contractors and subcontractors doing business with the federal government to discriminate in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran.

Learn more about OFCCP, or call its toll-free helpline at 800-397-6251.

HONOLULU – The owner of a Honolulu restaurant made earning a living difficult for its employees by allowing a manager to illegally keep a portion of workers’ tips and denying overtime pay to salaried cooks who worked an average of 55 hours a week, a recent federal investigation has found.

The department’s Wage and Hour Division investigation cited R-International Inc., owner of Rinka Restaurant, for its violations of the Fair Labor Standards Act, and recovered $85,000 in back wages and an equal amount in liquidated damages for 13 employees. The division also assessed the employer $10,000 in civil money penalties for the reckless nature of its violations.

“By failing to pay employees all of the tips they earned and refusing to pay overtime rates to cooks as required, the owner of Rinka Restaurant violated the law and demonstrated a reckless disregard for their workers’ rights,” said Wage and Hour Division District Director Terence Trotter in Honolulu. “This case should serve as a warning that violating federal law can have costly consequences. We encourage all employers to contact us or use department’s online resources before implementing potentially non-compliant practices.”

Since 2016, the Wage and Hour Division has conducted more than 2,650 investigations in the drinking and eating establishments industry in the Western Region, recovering $24 million in back wages for more than 15,300 employees. The division’s Honolulu District office conducted 228 of these investigations, finding violations in 219 cases and recovering more than $1.4 million in back wages for almost 1,700 employees.

For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

SAN ANTONIO – The operator of 19 San Antonio-area Dairy Queen locations failed to pay 31 managers as required and must pay back wages and interest to the employees, following a U.S. Department of Labor investigation and federal court order.

The department’s Wage and Hour Division recovered $358,200 in back wages and interest from R&S Dairy Queens Inc. for the employees. The division determined the managers, who received less than the required minimum salary for managers under the Fair Labor Standards Act, were entitled to the minimum wage for every hour of work and overtime when they worked more than 40 in a work week.

The U.S. District Court for the Western District of Texas in San Antonio affirmed the division’s findings in a consent judgment and issued an injunction prohibiting R&S Dairy Queens from future violations of the Fair Labor Standards Act’s overtime and recordkeeping provisions.

“Employers cannot avoid overtime requirements by simply giving an employee a title and paying them a salary,” said Wage and Hour District Director Cynthia Ramos in San Antonio. “Most employees – even those paid a fixed salary or flat amount per day or shift – are entitled to overtime unless specific FLSA requirements are met. We encourage other employers to review their pay practices, and to contact us with questions to avoid similar violations.”

R&S Dairy Queens Inc. operates 19 franchise locations in San Antonio and the surrounding area with approximately 350 full- and part-time employees.

For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, and use its search tool if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

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BIRMINGHAM, AL – In the Southeast, the pest control industry employs more workers than anywhere in the nation, and pays its workers some of the industry’s lowest wages. So, when Beebe’s Pest & Termite Control – operating in Alabama, Florida, Louisiana and Mississippi – failed to pay all of the wages earned by 28 workers, the employer made it even harder for them to make ends meet.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined the company’s operators – Beebe’s Pest & Termite Control of Alabama and Beebe’s Pest & Termite Control Inc. of Louisiana and Mississippi – paid pest control techs a salary for all the hours they worked. The employer failed to pay these workers the overtime they were due when they worked over 40 hours in a workweek, a violation of the Fair Labor Standards Act. Beebe’s Pest also failed to pay other workers their last pay checks – leading to minimum wage violations – and did not keep accurate records of hours worked as the law requires.

The investigation led the division to recover $52,604 in back wages for 28 workers.

“Employers must pay workers all of the wages they have legally earned on their designated payday,” said Wage and Hour District Director Kenneth Stripling in Birmingham, Alabama. “To avoid violations like those in this case, employers must educate themselves on labor laws, regularly review their pay practices and contact the Wage and Hour Division to clarify anything they do not understand. Ignorance of the law does not make it acceptable to violate it.”

Beebe’s Pest & Termite Control provides residential, commercial, industrial & marine pest control services in Alabama, Florida, Louisiana and Mississippi.

For information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, and use its search tool if you think you may be owed back wages collected by the division.

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WASHINGTON – The U.S. Department of Labor today announced a final rule that sets reasonable limits on the amount of time tipped employees can spend in non-tipped activities when the employer receives a tip credit. The rule clarifies that an employer may only take a tip credit for the hours when an employee is doing work that is tip-producing or engaged in tasks that directly support tip producing work.

The final rule also amends the regulations in Executive Order 13658, which address the hourly minimum wage paid to employees performing work on or in connection with covered federal contracts, consistent with the amendments to the dual jobs regulations.

Under the final rule, an employer can take a tip credit only when the tipped employee is performing tip-producing work or when the tipped employee is performing work that directly supports tip-producing work as long as the tipped worker does not spend a substantial amount of time doing tip-supporting work. The rule defines substantial amount of time as more than 20 percent of the hours worked during the employee’s workweek or a continuous period of time that exceeds 30 minutes.

The final rule becomes effective Dec. 28, 2021. 

The rule’s publication will enhance the division’s ability to ensure these essential workers benefit from every protection the law affords them. Many tipped employees remained on the job throughout the pandemic at risk to themselves and their families.

“Women, people of color and immigrants represent more than half of all tipped workers. Today’s final rule enhances protections for this vital segment of the nation’s essential workforce, and combats income disparity and promotes equity,” said Wage and Hour Division Acting Administrator Jessica Looman.

For more information on protections for tipped workers and others under the FLSA, or learn more about the Wage and Hour Division. You may also call toll-free 1-866-4US-WAGE to speak directly and confidentially to a trained Wage and Hour Division professional. The division protects workers regardless of immigration status, and can communicate with workers in more than 200 languages.

NEW YORK – For several years, workers for a building services contractor maintained HVAC services, electrical and lighting systems, elevators, fire safety equipment and internal mail distribution at a federal office building in Jamaica, Queens, under a federal contract with the Social Security Administration. The contract was worth $3.4 million in its final year.

The U.S. Department of Labor’s Wage and Hour Division review of the contract found Dellew Corp. failed to pay 14 workers their prevailing wages for the jobs they performed at the Joseph P. Addabbo Federal Building and did not pay proper fringe benefits to the International Union of Operating Engineers Union Local 30, per a collective bargaining agreement. By doing so, the Waipahu, Hawaii-based employer violated the McNamara-O’Hara Service Contract Act.

To resolve the matter, the department’s Office of Administrative Law Judges approved consent findings and ordered Dellew Corp. and owners Druscilla Lewis and Kelsey Lewis to comply with the terms of an enhanced five-year compliance agreement intended to ensure future compliance with the Service Contract Act and prevent future violations. The department’s Office of the Solicitor negotiated release of $783,616 withheld on the contract prior to litigation.

Specifically, the Wage and Hour Division determined that the contractor failed to pay the employees $47,705 in prevailing wages and $1,102,288 in required health and welfare fringe benefits. The Wage and Hour Division credited Dellew for $366,377 in payments made during its investigation and requested that the Social Security Administration withhold $783,616 in contract payments to cover the balance.

The Consent Findings and Order requires the employers to hire an independent monitor, knowledgeable of the Service Contract Act and its requirements, whose duties include:

• Conducting regular compliance reviews and training.
• Reviewing wage determinations and time and payroll records.
• Setting up a confidential hotline for employees to report noncompliance.
• Investigating allegations of noncompliance.
• Providing twice-yearly compliance certification to the Wage and Hour Division.

“Enforcement of prevailing wage laws protects the wages of hard-working, middle-class workers in America. Violations of the Service Contract Act and other federal wage laws are preventable if employers and employees know and understand their responsibilities and rights under the law,” said Wage and Hour Division District Director Jorge Alvarez in New York. “We encourage them to contact the Wage and Hour Division to learn more.”

“The U.S. Department of Labor is committed to ensuring employees are paid the wages they have rightfully earned and Federal contractors comply with the law. When employers fail to do so, we will pursue appropriate legal means on behalf of the workers and the law,” said regional Solicitor of Labor Jeffrey Rogoff.

The Wage and Hour Division’s New York City District Office conducted the original investigation. Trial Attorney Megan J. Harris of the New York regional Office of the Solicitor litigated the case for the department.

Workers can call the Wage and Hour Division confidentially with questions – regardless of their immigration status – and the department can speak with callers in more than 200 languages.

For more information about the SCA, the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

IMO Dellew Corporation, Kelsey Lewis, and Druscilla Lewis.  OALJ Docket No. 2021-SCA-00008

DETROIT – The U.S. Department of Labor’s offices in Detroit and Grand Rapids and the State of Michigan, Department of Labor and Economic Opportunity, Wage and Hour Division have signed a five-year Memorandum of Understanding to provide opportunities for the agencies to conduct joint investigations and joint outreach as well as share training materials and other information as appropriate.

“The U.S. Department of Labor and the Michigan Wage and Hour Division are committed to working together proactively to provide compliance assistance and worker rights information to Michigan’s workers and employers,” said Wage and Hour Regional Administrator Michael Lazzeri in Chicago. “This agreement will help to promote greater engagement and dialogue to protect workers’ rights.”

“While independent of one another, these divisions enforce many similar standards sometimes with overlapping jurisdiction,” said Michigan’s Department of Labor and Economic Opportunity Deputy Director Sean Egan in Lansing, Michigan. “We cannot expect working people and employers to fully understand these nuances and by enhancing our working relationship we are better equipped to ensure stronger educational opportunities and more effective enforcement activity.”

This is the second Memorandum of Understanding the U.S. Department of Labor Wage and Hour District offices have signed with Michigan government agencies. In January 2020, the offices signed a joint Memorandum of Understanding with the State of Michigan’s Department of Attorney General, Payroll Fraud Enforcement Unit and the Michigan Department of Labor and Economic Opportunity, Unemployment Insurance Agency.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

Learn more about the Michigan Wage and Hour Division.

COLUMBIA, SC – Employers who expect their workers to use personal vehicles on behalf of the business must provide mileage reimbursement or they may be in violation of federal law, the operator of two sandwich shops in Clemson and Anderson has learned.

U.S. Department of Labor Wage and Hour Division investigators found Clemson Subs LLC and Anderson Subs LLC – operated as Jimmy John’s establishments by their franchise owner – violated Fair Labor Standards Act provisions by failing to reimburse drivers for their mileage expenses. The employer’s failure to pay mileage expenses reduced drivers’ wages below the federal minimum wage of $7.25 per hour.

The investigation led the division to recover $27,209 in back wages for 74 workers.

“Amid the pandemic, food delivery drivers provide vital service to homebound customers and help many restaurants replace revenue lost when indoor dining is limited,” said Wage and Hour Division District Director Jamie Benefiel in Columbia, South Carolina. “The operator of these Jimmy John’s locations failed to comply with laws regarding employee use of personal vehicles, a situation now resolved by our investigation. Workers and employers alike are encouraged to contact us with questions about pay practices, mileage reimbursement and tips as a part of wages.”

For information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

HONOLULU – Some restaurant industry employers disregard federal wage and hours requirements recklessly making it harder for vulnerable, low-wage workers to earn a living and for law-abiding employers to compete.

A recent U.S. Department of Labor’s Wage and Hour Division investigation found GU Industrial & Business Corp. – operators of six Golden Coin locations in Hawaii – set its payroll system to deduct meal break time from pay routinely without fully considering whether the breaks were long enough for their purpose or, in some instances, whether staff actually took the breaks. As a result of their improper timekeeping policies, the department determined the employer failed to count and pay for all the hours employees worked, including those workweeks when they worked more than 40 hours, which led to violations of the Fair Labor Standards Act’s overtime provision.

The investigation led to the recovery of $97,503 in unpaid overtime wages for 137 workers. The division also assessed Golden Coin $23,240 in penalties for the reckless nature of its violations.

“Golden Coin deducted meal breaks automatically without affirming whether the employee was actually relieved from duty for a sufficient length of time or in other instances whether the meal breaks were actually taken. That is illegal under federal law,” said Wage and Hour Division District Director Terence Trotter in Honolulu, Hawaii. “This case should remind all employers to review their pay practices to ensure they are complying with the law and avoiding costly consequences if they do not.”

GU Industrial & Business Corp. has operated Golden Coin restaurants and bake shops offering Filipino specialties and other food products since 1985. Based in Waipahu – home to the company’s headquarters, a banquet facility, and meat and poultry processing and bakery facilities – GU Industrial & Business Corp operates Golden Coin locations in Ewa Beach, Honolulu, Kalihi, Wahiawa and Wailuku. 

In the last five years, the Wage and Hour Division has conducted more than 2,650 investigations in the drinking and eating establishments industry in the Western Region, recovering $24 million in back wages for more than 15,300 employees. The division’s Honolulu District office conducted 228 of these investigations, finding violations in 219 cases and recovering more than $1.4 million in back wages for almost 1,700 employees.

For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

WEST COVINA, CA – The U.S. Department of Labor has recovered $106,245 in overtime back wages and liquidated damages for 50 employees after finding that their Southern California employer made illegal deductions from workers’ wages and calculated workers’ overtime wages improperly.

Investigators with the department’s Wage and Hour Division found Parks Coffee California Inc. violated the Fair Labor Standards Act by making automatic one-hour lunch break deductions from employees’ wages even though their breaks were not free of work. The company – which supplies and operates refreshment vending machines – also violated FLSA’s overtime requirements by failing to document and compute bonuses and commissions into employees’ rate-of-pay when they worked more than 40 hours in a workweek.

The investigation led to the recovery of $53,122 in back wages plus an additional $53,122 in liquidated damages for the 50 employees.

“Employers must pay wages as the Fair Labor Standards Act’s minimum wage and overtime provisions require,” said Wage and Hour Division Assistant District Director Skarleth Kozlo in West Covina, California. “Parks Coffee is responsible for knowing what the law considers 'working time' for the accurate payment of wages.”

A subsidiary of Parks Coffee Inc. of Carrollton, Texas, Parks Coffee California operates gourmet vending machines in office buildings and workplaces in the Los Angeles and San Diego areas.

For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.