Charleston, South Carolina Employment Law Firm
Law Firm OverviewWe are a boutique law firm in Charleston, South Carolina focusing on employee-side employment law. We handle wage and hour case for clients who have not been properly paid overtime pay and for tipped employees and food and beverage employees who have been the victims of wage theft, tip theft, or who have been forced to participate in an illegal tip pool. We handle these cases as class actions or collective actions in many situations whereby one or more named employees bring the case on behalf of other employees who are similarly situated to them. If you, a family member, friend, or someone you know has worked in food and beverage as a tipped employee at any point during the last three years, please contact us to determine if you are entitled to unpaid wages because of an illegal tip pool or off-the-clock work.
If you have worked in the food and beverage industry, then it is likely that you have participated in a tip pool at some point or another. Tip pools are quite common in restaurants, bars, and other establishments where employees customarily receive tips from the customers they serve. In these situations, restaurant workers who receive tips are required to “pool” their tips together so they can be divided out among other employees in proportionate shares after a shift is over.
Restaurant tip pools are not illegal in and of themselves, but there are very strict requirements that restaurants must meet in order for the tip pool to remain valid. Many of these rules relating to restaurant tip pools may surprise servers, bartenders, and other food and beverage employees because many restaurant owners violate them on a frequent basis.
So, when is it legal for employers to require tipped employees to participate in restaurant tip pools and when is it illegal for employers to require tipped to participate in restaurant tip pools? In order to answer these questions, it is first necessary to understand the basic legal requirements of the “tip credit” under the FLSA.
We also handle FMLA cases and discrimination cases, including pregnancy discrimination, as well as retaliation cases, sexual harassment, and hostile work environment cases. If you were not allowed to take FMLA leave and believe you were an eligible employee for FMLA leave or if you were terminated during maternity leave or because you planned on taking maternity leave (or leave for any serious medical condition that you had or that an immediate family member had), then call us to determine whether your legal rights were violated.
Call us if you believe that you have been subjected to any of these illegal employment actions.
Year this Office was Established: 2009
Areas of Law
Additional Areas of Law: Tipped Employees; Food and Beverage Workers; Food & Beverage Employees; Tip Laws; Tip Pools; Tip Pool Laws; Minimum Wage for Servers; Unpaid Overtime Claims; Overtime Pay Issues; Wage and Hour Claims; Pregnancy Discrimination; Family & Medical Leave Act; FMLA; Disability Discrimination at Work; Sexual Harassment; Age Discrimination; Severance Agreements; Unpaid Overtime Wages; Unpaid Overtime Pay.
Areas of Law Description
Wage And Hour – Tipped Employees – Tip Pools
Overtime and Class Action Lawyers in South Carolina
Many people are unaware they are entitled to overtime compensation. Overtime laws are somewhat confusing for the weary and many employees have misconceptions about whether or not they are entitled to overtime. The law looks to the duties that an employee performs and the authority that an employee has – not his or her title or the fact that he or she may be misclassified by the employer as “exempt” or paid on a salary basis rather than on an hourly basis.
The Fair Labor Standards Act (“FLSA”) is a federal law that governs minimum wage and overtime issues in the United States. Some states have their own version of the FLSA governing overtime and minimum wage and such state-specific laws provide for greater employee protection in most cases than does the FLSA. South Carolina does not have a state law governing overtime pay, so the FLSA is the whole story for South Carolinians when it comes to overtime.
Some common myths and misconceptions about overtime pay, in no particular order, are:
Myth #1: You are not entitled to overtime if you are paid a salary.
Perhaps the biggest overtime myth is that salaried employees are not entitled to overtime pay. There are certain statutory exemptions for employees under the FLSA that do require an employee to be paid a salary in order to fall under the exemption, but salary is only one part of a multi-prong test in these instances. If the other criteria for an exemption are not met, then the fact that an employee is paid on a salary alone will not keep the employee from being entitled to overtime. The fact of the matter is that while there are many hourly employees who are entitled to overtime, there are also many salaried employees who are entitled to overtime as well. If you are paid a salary, you are still entitled to overtime unless you meet all of the requirements for one of the exemptions under the FLSA.
Myth #2: Compensatory time can be given in lieu of overtime pay
Unless you are employed by a public employer, such as the local, state or federal government, your employer cannot give you compensatory time in lieu of overtime pay. Private employers cannot even give their non-exempt employees a choice between overtime pay or compensatory time off under the FLSA.
Myth #3: Time spent traveling for work does not count towards hours worked for purposes of calculating overtime
While time spent commuting to and from work is not considered part of the hours worked in calculating overtime pay, employee travel that is part of the normal workday, such as travel time to and from job sites or client meetings, is compensable work time and does count towards the calculation of total hours worked for purposes of calculating overtime.
Myth #4: Tipped employees are not entitled to overtime pay
Although your employer is permitted to pay less than minimum wage (as low as $2.13 per hour) if you are a tipped employee (such as a waitress or bartender), your employer is nevertheless required to demonstrate that you are making at least minimum wage once your tips are added to the wages that your employer pays you. In reality, employers often fail to ensure that tipped employees are earning at least minimum wage after tips are taken into account.
Myth #5: Employees can give up their right to overtime pay
The FLSA does not allow an employee who is entitled to overtime pay to “give up” or waive his or her right to overtime pay by agreement with the employer. In other words, your employer is not off the hook for failing to pay you for overtime pay even if you and your employer entered into an agreement that you would not be entitled to overtime pay or that you would voluntarily waive your overtime pay. If your employer required you to enter into an agreement to this effect, then it is not valid by law and you may still be entitled to overtime pay.
Myth #6: You are not entitled to overtime unless your supervisor expressly authorizes it
Nearly all employees paid by the hour (and many employees who are paid a salary) are entitled to pay at one and a half times their normal rate of pay for all overtime hours worked. All work done above and beyond 40 hours in one week is eligible for overtime. If your supervisor directs you to go home from work instead of working overtime, then you should do so or you could be disciplined or even terminated. You are, however, entitled to overtime pay for all hours worked over forty per workweek regardless of whether your supervisor authorized you to work overtime or not.
Myth #7: Your employer can choose to pay you “straight time only” even if you work more than 40 hours a week
The FLSA requires that all employers pay their employees one and a half times the employee’s regular rate of pay for all hours worked in excess of 40 in any given workweek. Almost no exceptions to this overtime law apply if you are an hourly employee. This means that if you make $20 per hour, you should receive $30 per hour for all hours that you work in excess of forty hours per workweek.
Myth #8: You are not eligible for overtime for any work you did “off the clock”
All hours worked by an employee over 40 per week count towards overtime, no matter when they are performed. If your employer is asking you to work “off the clock” and either not paying you anything at all for that time worked “off the clock” or not counting that time worked “off the clock” towards your 40 hours per week in calculating your overtime pay, then you should speak with an overtime lawyer to determine whether you are entitled to overtime pay.
While these myths represent some of the more common misunderstandings in regards to overtime pay, there are many, many more. It pays for employees to understand exactly how overtime laws apply to their unique situations.
Tipped Employees, the Tip Credit, and Tip Pools
One of the more common areas where overtime and minimum wage law violations occur is in the restaurant, bar, and hospitality industries where many employees regularly receive tips from customers. For many employees, such as waitresses, waiters, busboys, bellhops, valets, and bartenders, tips are their primary source of income. Employers may pay tipped employees less than minimum wage and take what is known as a “tip credit,” which is a credit towards the employer’s obligation to pay an employee minimum wage, in determining what the total compensation would be for a tipped employee. Tipped employees are those who customarily and regularly receive more than $30 per month in tips. Employers electing to use the tip credit provision must be able to show that tipped employees receive at least the minimum wage when cash wages paid and the tip credit amount are combined. If an employee’s tips combined with the employer’s cash wage of $2.13 an hour do not equal at least the minimum hourly wage (currently $7.25 per hour), the employer must make up the difference. Very often, however, employers do not. Sometimes employers unintentionally violate tip laws. Other times, however, employers violate overtime laws on purpose in order to save money.
Notice of the Tip Credit
In order to claim the “tip credit,” an employer must specifically advise the employee, verbally or in writing, of the statutory tip credit before it is taken and allow the employee to retain the tips provided. Even if a tipped employee receives tips above and beyond minimum wage, if the employer failed to advise the employee of the statutory tip credit, then the employer can still be in violation of the FLSA. This is because, by taking the tip credit, the employer is asserting that the tipped employee is earning enough in tips to make up the difference between the federal minimum wage and the cash wages actually paid by the employer to the tipped employee.
An employer is required to provide the following information to a tipped employee before the employer may claim the tip credit:
(1) the amount of the cash wage the employer is paying a tipped employee, which must be at least $2.13 per hour;
(2) the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25;
(3) that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;
(4) that all tips received by the tipped employee are to be retained by the employee except for where a valid tip pool arrangement is in place and is limited to employees who customarily and regularly receive tips; and
(5) that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.
If an employer fails to inform a tipped employee of all of this information, then the employer cannot use the tip credit provisions and therefore must pay the tipped employee at least $7.25 per hour by law and allow the tipped employee to keep all tips received.
The 20% Rule and “Side Work”
While the FLSA permits employers to pay tipped employees less than minimum wage on account of the tips they earn, employers cannot claim a tip credit against the minimum wage for time spent working in a non-tipped occupation or on duties not related to their tipped work. For example, if an employee works as both a janitor and as a waiter for the same employer, the employer cannot take a tip credit for any of the hours the employee spends working as a janitor. The worker is a “tipped employee” only with respect to his employment as a waiter. But what about an employee who performs the work of both a tipped and a non-tipped occupation during the same shift? Can an employee still be a “tipped employee” if he or she is given work duties that are not tip-generating? The law holds that a tipped employee remains a “tipped employee” for pay purposes unless he spends more than twenty percent of his time performing non-tipped work. This common sense rule prevents employers from assigning – for example – substantial janitorial duties to its waiters and paying the subminimum “tipped employee rate” for work that will not result in any tips.
Tip pools raise many questions for tipped employees and are quite often improperly implemented by employers of tipped employees, such as servers, waiters, and bartenders. In many restaurants, tipped employees are required to give a portion of their tips to other restaurant staff members through the use of tip pools. The idea behind tip pools is that many members of the restaurant staff contribute to the service of the restaurant’s customers and, accordingly, should also be allowed to share in the tips even if they don’t deal directly with the customers themselves.
Under a valid tip pool agreement, tipped employees can only be required to share their tips with other employees who also regularly and customarily receive tips. Generally, if other employees included in tip pools are either paid at least minimum wage or do not interact with customers, then the tip pool arrangement is not valid under the law. Courts have generally held that tipped employees such as servers, hostesses, busboys, and service bartenders who are paid less than minimum wage can be included in tip pool arrangements without invalidating the arrangement, while dishwashers, cooks, and janitors typically may not be included in tip pools as they do not have sufficient interaction with customers. Tip pools that include these types of employees without sufficient interaction with customers or that include employees who are paid minimum wage or greater are not valid. Tipped employees are also not required to share or pool tips with management.
While the FLSA is a federal law that requires employers to pay no less than minimum wage and to pay certain employees who work overtime at the overtime rate, South Carolina also has a state law, the Payment of Wages Act, which provides recourse for employees who are not paid their wages when they are due. Under the Payment of Wages Act, wages are defined rather broadly and the definition of wages includes bonuses and commissions in addition to their regular salary. The Payment of Wages Act provides for the recovery of treble damages in an amount equal to three times the amount of the wages due, in addition to attorney’s fees. Treble damages and attorney’s fees are only awarded under the Act if there exists no bona fide dispute over the unpaid wages or if the employer had no good faith reason for withholding the unpaid wages.
Family & Medical Leave Act (FMLA)
FMLA Lawyers – Charleston, South Carolina
The Family Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. §§2601-2654, makes it unlawful for covered employers to terminate or otherwise discipline an eligible employee for taking up to 12 weeks of unpaid leave (or 26 weeks to care for a covered servicemember with a serious illness or injury incurred in the line of duty on active duty) off from work in any 12-month period to:
(1) care for a newborn child;
(2) care for a seriously ill spouse, parent, or child;
(3) care for the employee’s own personal serious health condition;
(4) care for a covered servicemember with a serious illness or injury incurred in the line of duty on active duty; or
(5) use for “any qualifying exigency” arising out of the fact that a covered military family member is on active duty or called to active duty status in support of a contingency operation.
The FMLA applies to employers with 50 or more employees (including part-time employees) and to employees who have been employed by the employer for at least 12 months, worked for the employer for at least 1,250 hours, and are employed at a location where the employer employs at least 50 employees within a 75-mile radius.
A “serious health condition” is defined as an illness, injury, impairment, or physical or mental condition that involves inpatient care or continuing treatment under the FMLA.
Eligible employees are entitled as a matter of right to take FMLA leave. The FMLA also provides further protection to covered employees through an anti-retaliation provision. The FMLA prohibits employers from retaliating against an employee who opposes violations of the Act. This means that it is unlawful for an employer to discharge or discriminate in any other manner against an individual for opposing any practice made unlawful by the FMLA.
The FMLA is a tricky area of law and a source of confusion for both employees and employers, so great care should be given in determining its applicability and ramifications. To complicate the FMLA even more, significant changes and amendments were made to the Act in 2008, which primarily provides further protection to those serving in the military and to those providing care for them.
Severance Pay Lawyers – Charleston, SC
Severance agreements are often used between employees and employers when an employee is being laid off during a reduction in force by the employer. Employers can benefit from severance agreements by limiting their liability and by limiting potential future lawsuits from employees. Employees can benefit from severance agreements by receiving a lump sum payment to help tie them over until they are able to find subsequent employment.
Severance pay is not mandated by law and an employer is not required to provide any form of severance pay to a separating employee. In the event that an employment contract provides for severance pay, however, the terms of the employment contract will control and the employer will be contractually bound to the terms therein relating to severance pay. Often, employment contracts will stipulate that an employee terminated for cause is not entitled to severance pay even though the employee would have received severance in the absence of cause for termination. Courts have routinely upheld an employer’s refusal to pay severance in such cases.
While South Carolina is an “at-will” employment state, the presumption of employment “at-will” does not apply where an employment contract exists between the employer and the employee.
Where an employee and the employer have a contract setting forth the terms and duration of the employment between the parties, the contract controls the terms of the employment relationship. Where the employee has an employment contract with the employer, the employee is not employed “at-will” as would otherwise be the case and both the employer and the employee must abide by the terms of the contract.
Additionally, an employment contract may be created by an employment handbook. Handbooks are often issued by employers to employees upon hire. Handbooks typically set forth the rules and guidelines that an employee must follow. Handbooks often set forth progressive discipline systems by which employees in violation of the employer’s guidelines will be punished. Handbooks that contain affirmative, promissory, or mandatory language often create contracts of employment and both the employer and the employee must abide by the terms of the handbook.
An employer may, however, prevent a handbook from creating an implied contract by including a conspicuous disclaimer in the handbook that specifically adheres to the statutory rules set forth by the South Carolina Legislature. Even where an employer has properly disclaimed a handbook from creating a contract, an employer may nevertheless unintentionally create an employment contract by providing oral statements of assurance of a job or promises to an employee.
Workplace Discrimination Lawyers – Charleston, SC
Federal and state law prohibits employers from discriminating against employees or prospective employees on the basis of one’s membership in a protected class or involvement in protected activity. There are many federal laws that protect the rights of employees and they serve as exceptions to the doctrine of “at-will” employment. While the general rule for employment in South Carolina is that an employer can fire an employee at any time and for any reason, whether good or bad, or even for no reason at all, federal law prohibits employers from firing employees for discriminatory reasons or retaliatory reasons.
Generally, Title VII prohibits covered employers from discriminating against an individual on the basis of race, color, religion, gender, or national origin. Title VII makes it an unlawful employment practice to refuse to hire, discharge or otherwise discriminate against any individual. Title VII further prohibits employers from retaliating against any individual because he or she has opposed an employment practice that is made unlawful under Title VII.
Title VII applies to employers with 15 or more employees.
Pregnancy Discrimination Act (PDA)
While Title VII did not originally prohibit discrimination on the basis of pregnancy, Congress amended Title VII in 1978 to “prohibit sex discrimination on the basis of pregnancy.” The PDA prohibits employers from discriminating “on the basis of pregnancy, childbirth, or related medical conditions.” Specifically, the PDA states that an employer is prohibited from terminating or refusing to hire/promote a woman on the basis of her pregnancy. Further, under the PDA, employers cannot discriminatorily assign or re-assign pregnant women to unfavorable positions, take away their benefits, or require mandatory leave periods. The PDA only applies to employers with 15 or more employees.
Age Discrimination in Employment Act (ADEA)
The ADEA prohibits covered employers from engaging in age discrimination against employees who are 40 years of age or older. The ADEA makes it unlawful for an employer to refuse to hire, terminate, or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions, or privileges of employment because of the person’s age. Like Title VII, the ADEA has an anti-retaliation provision making it unlawful for an employer to take adverse employment action against an employee because he or she has opposed any employment practice that is deemed unlawful under the ADEA.
The ADEA applies to employers with 20 or more employees.
Americans with Disabilities Act (ADA) and the Americans with Disabilities Act Amendments Act of 2008 (ADAAA)
The ADA, along with its amendments, prohibits employment discrimination against a qualified individual on the basis of disability. The ADAAA significantly broadened the scope of what constitutes a “disability” under the Act. With the ADAAA, Congress intended to shift the focus of the analysis under the ADA to whether a qualified individual has been discriminated against, rather than on whether the individual is a person with a disability.
The ADA requires employers to provide reasonable accommodations to disabled employees in certain situations.
The ADA applies to employers with 15 or more employees.
Other federal ant-discrimination and anti-retaliation laws include the Genetic Information Nondiscrimination Act of 2008 (GINA), the Equal Pay Act, and the Pregnancy Discrimination Act.
Employees must be vigilant in determining and exercising any rights they may have under the aforementioned or any other federal or state employment laws, as many of these laws have strict procedural filing rules and deadlines.
Federal and state laws prohibit retaliation against any person who opposes or complains about nonpayment of overtime pay, sexual harassment, gender discrimination, disability discrimination, age discrimination, pregnancy discrimination, religious discrimination, or any other violation of Title VII, the ADA, the ADEA, the FMLA or the FLSA in the workplace. This prohibition against retaliation also applies to individuals who participate in an investigation into unlawful employment conduct or practices.
Title VII specifically prohibits employers from discriminating against any employee or any applicant because he “opposed … an unlawful employment practice” or “made a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under this subchapter.” 42 U.S.C. §2000d-3(a). The first section of Title VII cited above is often referred to as the “opposition clause.” The second section of Title VII cited above is known as the “participation clause.”
The opposition clause provides protection for individuals who informally oppose an employer’s illegal activities under Title VII or activities that the individual reasonably believes to be unlawful under Title VII. An employee’s opposition to unlawful employment practices can take many different forms and need not involve opposition in the form of a formal proceeding. An employee can oppose unlawful employment practices by doing things such as supporting a coworker’s claim of discrimination, threatening to file a charge of discrimination, reporting sexual harassment or discrimination against other employees, complaining to a supervisor about workplace sexual harassment, or otherwise informally speaking out against illegal employment activities. Courts use a balancing test to determine which activities fall under the opposition clause of Title VII.
The participation clause strictly prohibits retaliation against individuals for testifying, assisting, or participating in any investigation, proceeding, or hearing under Title VII.
In order to make a prima facie case for retaliation, an employee must show that he engaged in activity that is “protected” by the law, that he suffered some form of negative employment action, and that a causal connection exists between the protected activity and the negative employment action.
Sexual Harassment & Hostile Work Environment
Sexual Harassment Lawyers – Charleston, SC
Sexual harassment is considered an illegal form of gender discrimination under Title VII, as well as under some state-specific anti-discrimination laws. While sexual harassment can involve actual requests or bribes by supervisors to employees for sexual favors (which is referred to as quid pro quo harassment), it more often involves conduct by a supervisor, co-worker or non-employee that creates a hostile, offensive or intimidating work environment because of the employee’s gender.
An employee can establish a hostile work environment if he or she can show: (1) membership in a protected class; (2) that he or she was subjected to unwelcome harassment; (3) a causal connection existed between the harassment the employee suffered and the employee’s membership in the protected group; and (4) that the harassment was sufficiently severe or pervasive to affect a term, condition or privilege of employment.
Unwelcome conduct may be directly sexual in nature, such as comments about an employee’s clothing, looks, marital status, or the like. Non-sexual conduct of an employer, however, may also be actionable if the conduct is directed to the employee because of his or her gender. For example, if a supervisor uses vulgar or demeaning names when referring to women, but not when referring to men, such conduct would likely be actionable.
Employers are strictly liable for a supervisor’s harassment of an employee where the employee is subjected to a tangible employment action, such as termination, demotion or even an undesirable change in hours. Employers are also vicariously liable for a supervisor’s harassment in situations where no adverse employment action is taken against the employee, but the employer has an affirmative defense in this scenario if it can show that (1) it exercised reasonable care to prevent and promptly correct any sexually harassing behavior and that (2) the employee victim unreasonably failed to take advantage of any preventative or corrective measures or opportunities provided by the employer.
Mr. Scott Falls
Civil Litigation, Class Actions, Discrimination, Employee Benefits, Employees Rights
- South Carolina Bar Association
- Charleston County Bar Association
- National Employment Lawyer's Association
More Information on Falls Legal, LLCCharleston, SC Overtime Lawyers
South Carolina Tipped Employees Lawyers
Charleston FMLA Lawyers
Charleston, SC Sexual Harassment Law Firm
SC Pregnancy Discrimination Lawyers
Charleston Tip Pool Lawyers
Charleston, South Carolina Wage & Hour Lawyers
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Articles Published by Falls Legal, LLC
The Family and Medical Leave Act of 1993 (“FMLA”) provides up to 12 weeks of unpaid leave to an eligible employee for his or her own serious health condition or the serious health condition or military service of a family member.[i]Read Article
Fourth Circuit Broadens Definition of Disability Under the ADAAA to Include Temporary Impairments - Article on a recent decision by the Fourth Circuit Court of Appeals on a disability discrimination case and the interpretation of what types of temporary impairments constitute a "disability" under the Americans with Disabilities Act ("ADA").Read Article