Archive for the 'Employment' Category

The Legalities of Firing Nazis

Charlottesville, Virginia is on everybody’s lips. In response to the removal of Confederate monuments, neo-Nazis, KKK members, white supremacists, militia, hard right conservatives, and others gathered–many armed with semi-automatic rifles and clothed in body armor–in Charlottesville for a “Unite the Right” rally. These people gathered, hoods off and faces revealed to the public. In the process of their armed protest, violence erupted against people protesting against the ideologies of those gathered–often essentially white supremacy and ethnic genocide”–in the wake of this violence one woman lay dead and fourteen were injured after a man named James Field rammed his car through a crowd of protesters. All told, the body count to date is three dead and dozens injured.

In response to the hatred inherent in the rally and the horrific acts of those such as James Field, many online took a beautifully simple step to strike back against neo-Nazi and KKK supporters-they posted pictures of them at the rally online. People took to Twitter and posted these pictures along with text reading “Do you know me? Are you my employer? I was at a neo-Nazi rally in Charlottesville.” This immediately drew the attention of those on social media and many identified the people at the rally. At least one employer–a hot dog restaurant out of Berkeley called Top Dog–fired an employee named Cole White for his photographed participation in a gathering of white supremacists at the rally.

The release of these pictures has led to some outcry from those who attended the rally and their supporters. They cry invasion of privacy and describe posting their pictures as “doxing”-a common term for posting personal information of a third party online in order to incite harassment. Let’s quickly dismiss these arguments, that simply isn’t how privacy or privacy law works. Privacy interests under the law hinge on your reasonable expectation of privacy in what you’re doing or in the information. If you are having a phone call alone in your house, there is a strong expectation of privacy. If you take to streets, masks off revealing your affiliation with the KKK, you have no expectation of privacy whatsoever. People can take pictures, people can generally post those pictures–you have almost no expectation of privacy in things you do on public streets.

NazisThe second thing that has these rally-goers in a tizzy is the potential of more employers going along the path of Top Dog and–who would have thought–firing people who reveal themselves as Nazi’s or white supremacists. Their arguments have trended towards one of two categories–reverse racism and violation of the First Amendment by firing them for political beliefs. We’ll be discussing firing over political beliefs later in a fair bit of depth. However, let’s start with reverse racism as an argument, because it is usually patently ridiculous and almost never exists under the law. While race-based discrimination can include Caucasian people, proving a claim of discrimination against a majority group such as this requires showing a higher standard of evidence as it is extremely rare to be able to establish a majority group is treated worse than a minority group.

The Legalities of Firing Nazis

The complaint of these rally-goers over the potential of being fired for their political beliefs is a more complicated one-mostly because there is a common misconception that employers can’t fire you for your political beliefs. Unless you are employed by the government, not only can a private employer generally fire you for your political beliefs they can even pressure you into voting a certain way. Just recently, it was ruled that a police chief could fire his employees for not donating to his political campaign. Generally, when not being applied to Nazis, this sounds a little scary. However, it makes sense considering how the First Amendment works. The First Amendment protects against government action curtailing freedom of speech, religion, and association-for the most part it does not apply whatsoever to private action or private employers. This includes political action taken outside of work.

There are several situations where a politically motivated firing can still get a private employer in trouble. Where the politics behind a firing overlaps with a protected class such a race, national origin, religion, or-in many states-sexual orientation or gender identity it can give rise to separate legal issues. Similarly, allowing a workplace environment where a boss or even many employees constantly discuss issues such as banning access to specific ethnicities, races, or countries, that can easily create a hostile work environment or constitute harassment. Both can lead to legal action against an employer. Finally, an employer cannot punish political stances in a way that limits an employee’s ability to discuss terms of employment or unionization. For example, if employees feel a politician’s stances might impact their wages then an employer would generally not be able to punish them for talking about it.

All of this presumes the most common type of employment-at will employment. In this situation somebody can be fired for any (or no) reason and they can quit in the same circumstances. There are certainly situations where an employment contract may modify how an employer must act.

State laws can add some further protections for political affiliations. California and New York forbid discriminating against workers due to political views, political activities, or affiliations. However, there are exceptions where you either participate in a political activity that conflicts with your employer’s business model or it impacts your work. If an employee creates a liability to the company-such as a Nazi who might create a hostile work environment or harassment lawsuit against your business–an exemption may exist depending on the facts.

Other states have similar, but nowhere near as in-depth, laws regarding how political stances can be treated by employers. Kentucky, Ohio, Pennsylvania, and West Virginia make it illegal to fire or threaten to fire employees if any one political candidate is elected. Oregon makes it illegal to threaten an employee to influence their vote. In Washington, it is illegal to retaliate against an employee for not supporting a particular candidate, party, or ballot initiative. It’s notable that this does not include firing somebody for supporting any of the above-or provide any protection whatsoever for broader political positions. Michigan protects against direct or indirect threats to influence an employee’s votes. Florida goes so far as make threatening to or firing an employee for not voting a certain way. California, Colorado, Louisiana, New York, and North Dakota make it illegal to act against an employee for off-duty participation in legal politics. This last one is likely of the most concern. However, it only applies to legal political activity. This begs the question, is being a neo-Nazi or a white supremacist a legal political activity? The issue is not well resolved in the state courts where they’d be most relevant, but there is a strong argument that a desire for ethnic genocide is not a political position.

Yes, You Can Generally Fire Nazis for Being Nazis …and You Probably Should

For the most part, federal law has no protections for these white supremacists and Nazis. They have made their bed with their choices to appear in public and voice their support of hatred and ethnic genocide. Not only can employers fire such employees in most states, they are both morally in the right to do so and keeping these employees on may risk liability based on creating hostile work environment or allowing harassment of a protected class.

The repercussions are not over for those who chose to take to the streets in support of hatred. The criminal charges against James Fields are ongoing. GoDaddy and even Google have booted Nazi websites off their servers and search results respectively. The pictures online continue to be identified and brought to attention of employers. From here, we’ll have to see how many employers follow the example of Top Dog.

LGBT Rights: Understanding the Department of Justice In-fights with EEOC

Over the last year or so, we’ve talked quite a bit about the strides made in LGBT employment rights taken by the Equal Employment Opportunity Commission (EEOC). We’ve seen enormous steps towards extending protection of the law to those discriminated against based on sexual orientation and gender identity, if not making them a protected class in and of themselves.

Title VII forbids employers from discriminating against employees due to being a member of a protected class such as race, gender, national origin, color or religion.  It also prevents employers from retaliating, through termination or otherwise, against employees who report such discrimination. For years now, the EEOC has embraced the logic that sexual orientation and gender identity fall under the protections of Title VII–including them in the gender class.

Unfortunately, the Department of Justice (DoJ) and Jeff Sessions are determined to spend resources attacking these rights. Just a few days ago, the DoJ filed a “friend of the court brief” (a type of brief where an interested non-party to a lawsuit makes a filing to try and convince a court to rule a specific way) arguing that LGBT persons shouldn’t be. This a step down a path undoing essentially 8 years of work. The timing of the filing, the same day as the transgender ban we just spoke about, just serves to highlight the Trump administration’s stance on LGBT rights. Let’s take a look at the case, the stance of the EEOC, and the DoJ’s arguments against extending rights to the LGBT community.

The Case in Question

The case itself deals with a skydiving instructor by the name of Donald Zarda. Back in 2010, he was working for Altitude Express doing tandem dives with clients. This obviously involves being essentially strapped together. In order to assuage the worries of a woman he was diving with regarding this issue, he mentioned to her that he was gay. Her husband complained about this to the company, leading to their firing Mr. Zarda. After this, Mr. Zarda sued Altitude Express for violations of Title VII.

Mr. Zarda’s claims obviously hinge on sexual orientation being protected from discrimination under Title VII. The DoJ’s court filings argue that this is not the case and cannot be the case without an act of Congress. This specifically targets the current stance of the EEOC, taken during the Obama Administration years.

 LGBTThe EEOC’s Current Position

In July 2015, the EEOC declared as an agency that sexual orientation was a protected class as a form of sex-based discrimination.  Since then, they have been investigating claims of discrimination based on gender identity or sexual orientation. Recently, the EEOC has brought two separate federal lawsuits alleging discrimination against homosexual employees on the basis of their sexual orientation. They have had an unofficial stance favoring treatment of sexual orientation as protected under Title VII since as early as 2013. In cases as early as 2012, the EEOC had held the discrimination based on gender identity is discrimination based on sex and thus in violation of Title VII.

The arguments the EEOC makes to include sexual orientation and gender identity within the confines of sex and gender hinge on elements of Title VII which forbid discrimination based on non-compliance with norms or stereotypes. Essentially, it boils down to discrimination against LGBT persons being necessarily founded in discrimination based on their non-conformance with gender or sex norms in society–identifying with your birth gender and being heterosexual.

The DoJ is attacking this argument, as well as the power of the EEOC to make such a determination in the first place.

The Department of Justice’s Brief

The DoJ’s brief is substantial. They’ve clearly put quite a bit of time and resources into arguing against protecting the LGBT community. However, their arguments can essentially be boiled down to three things: 1) Congress has shown that they don’t want to protect LGBT persons by never amending Title VII to include them as a protected class; 2) discrimination can’t exist under Title VII unless women and men are treated differently; and 3) discrimination against LGBT is not necessarily related to gender.

Their first argument comes up several times in the brief. They assert that Congress’s failure to add sexual orientation when amending Title VII in 1978 and 1991, despite court rulings existing which refused protection on this basis, is proof Congress didn’t intend to protect LGBT persons. They say that Congress knew that LGBT people weren’t protected under the act both times they made their amendments. The DoJ says that this implies that Congress intentionally chose not to include LGBT people in Title VII’s protections.

The DoJ argues that this means that the EEOC doesn’t have the power to treat LGBT people as protected.  This probably is not the case, barring an actual act of Congress it is unlikely that the EEOC has acted beyond the purview of its role as an agency which is specifically to interpret and apply Title VII. However, the DoJ’s argument is the type that carries weight with the courts. In interpreting law, statutory interpretation often draws on the intent of Congress in making a law.  The failure to include LGBT persons is far from a deathblow to the EEOC’s interpretation but it certainly requires them to have stronger arguments backing their current treatment of the law.

Next, the DoJ argues that sex and gender discrimination only exists where men and women are treated differently by an employer. They cite a few (fairly cherrypicked) cases in support of this assertion. However, even the DoJ acknowledges that gender stereotyping creates an established cause of action for Title VII discrimination.  This leaves several holes in the DoJ’s arguments.

Gender stereotyping specifically creates a cause of action where an employee is discriminated against based on their divergence from established gender stereotypes. This has never relied upon treatment different from the opposite gender. If this wasn’t the case, why would gender stereotyping even exist as a cause of action under the law? Treating women differently from men already exists separate to gender stereotyping. If it only applies to treating women who act masculine worse than men who conform to gender stereotypes (or vice versa) then gender stereotyping as a rule becomes irrelevant. What’s more, if gender is considered as separate from biological sex (as is common practice in scientific communities these days), then transgender persons the EEOC argument still holds. A person male identifying female could receive disparate treatment from a male identifying male. In this case, although both have a birth gender of male, the case would involve a person identifying as one gender being treated differently from one identifying the opposite gender.

The DoJ tries to fight this by highlighting that a “plaintiff must show that the employer actually relied on her [or his] gender in making its decision.” This doesn’t have to mean one gender or another, just that an employer relied on the gender of the person discriminated against in stereotyping them.

Finally, the DoJ attacks the EEOC’s argument that discriminating against sexual orientation or gender identity is necessarily linked to the protected classes of sex or gender. They say, as if it encourages removing protections that a homophobic employer would discriminate against a gay or transgender person regardless of their gender. However, this once again ignores the basis of the EEOC’s argument in gender stereotyping. Even if an employer “equally discriminates” against both genders of LGBT persons, they are still necessarily discriminating based on a gender stereotype that people should have sex with the opposite sex and identify with their birth gender

The DoJ also argues that you can discriminate against gay people who completely conform to gender stereotypes other than their sexual orientation. This is held up to counter the EEOC’s argument that sexual orientation discrimination is always gender discrimination. It’s unclear however, as to how this is an argument against the practice altogether. Rather, at most, it is an argument that where there is no divergence from gender stereotypes there is no discrimination. How that would exist when a gay person is necessarily divergent from the gender stereotype of having relationships with the opposite sex is unclear.

Trump Administration is Backpedaling

The DoJ’s arguments for removing protections for LGBT have some serious issues, both from a legal analysis standpoint and an ethical one. However, they are not ridiculous on their face and are certainly capable of persuading a judge to rule in their favor.

The effort and money they’ve put in to allow discrimination against LGBT persons is, above all, an example of the Trump administration’s lack of commitment to protect the LGBT community. Despite proclaiming himself the preferred candidate for LGBT rights during his campaign, President Trump’s actions since taking office have shown him to anything but. This move is coming on the eve of revoking protections for transgender people in the military and in the wake of decisions backing off LGBT rights enforcement.

At this point, the issue is going to be more and more in the hands of state law-a patchwork of protection and utter lack of protection depending on where you live. However, more than anything, the DoJ’s actions reveal how important it is to treat sexual orientation and gender identity as protected classes of their own. This would require an act of Congress, and is thus will not happen soon. However, making these two a protected class would remove all of the DoJ’s arguments against protection. What’s more, they fit the established mold of what we treat as protected classes.

Courts have historically looked at three elements when forming a new protected class: (1) a long history of discrimination, (2) economic disadvantages, and (3) immutable characteristics. While some may argue immutability, despite substantial scientific evidence to contrary, both sexual orientation and gender identity easily check all these boxes. Until we see these two treated as a full protected class, the entire LGBT community will find it’s rights at the whim of each passing administration and that simply cannot stand.

Google Memo Writer Would Likely Lose Lawsuit Against Google

Former Google software engineer James Damore was fired by Google for writing a memo titled “Google’s Ideological Echo Chamber” that critics have labeled as “anti-diversity.” Damore’s memo was originally on a private internal company discussion board, but was quickly shared outside Google.

Google, currently under investigation by the Department of Labor for paying women less than men, has distanced itself from Damore’s memo, which claims that numerous differences between women and men are biological. Google’s new Vice President of Diversity, Integrity and Governance, Danielle Brown, has released a statement that the memo is “not a viewpoint that I or this company endorses, promotes or encourages.”

Damore says he is considering bringing a suit against Google for his recent dismissal, though exactly what claims he thinks will be successful in court is unclear.

GoogleWhat about Free Speech?

It’s a common misconception that free speech protects everyone against termination or discrimination. The First Amendment, and the ban against restricting free speech, is constitutional law. The Constitution only applies to governments: the federal government, the states, and local counties. The Constitution does NOT apply to private corporations. If Mr. Damore was terminated for writing his memo while working for California’s Department of Motorized Vehicles, he would have a strong free speech case against California. However, since Damore’s employer, Google, was a private employer, the First Amendment does not apply to this case.

However, while Google may prevail legally, this is a political, employment, and public relations nightmare that most major corporations don’t want to deal with. Google has built a reputation and social philosophy on diversity. Most conservative platforms and publications this week have already pointed out the hypocrisy: what’s the point in having diversity in race or gender if your team’s thoughts and viewpoints aren’t diverse? Diversity as a value is superficial if the only diversity celebrated is the person’s skin or appearance.

Still, this is a political question that will only affect law if public opinion changes enough.

Is There a Discrimination Suit Here?

Employment law is premised on two ideas: 1. that employers (and employees) may terminate “at will” an employment relationship for any reason other than an illegal reason and 2. One of those illegal reasons is discrimination based on a specific personal trait, such as race or gender. Notably, political ideology is not on the list of protected traits in the Civil Rights Act. This means that while a private company cannot fire a woman for being feminine, as that would be gender discrimination; the company could fire that woman for being feminist if she spends her time in the office talking about women’s rights issues.

Damore could attempt to bring a case against Google under the Civil Rights Act by arguing that Google discriminated against him for being a man or for being white. However, that claim would be incredibly hard to support. Google could just claim that it fired Damore because it didn’t like the memo he wrote. There’s nothing about the memo itself to suggest that the author was 100% a white man. Google does not have a history of discriminating white men and it doesn’t have a hostile work environment towards white men. In fact, given that white men make up the majority of the company, it’s a pretty safe assumption that Google’s problem with Damore is what he wrote rather than his race or gender.

What about California Law?

Although the federal Civil Rights Act doesn’t offer any protection for discrimination based on politics, California employment law does protection against discrimination based on “political activities or affiliations.” Although this phrase is somewhat vague, there is some consensus on what kinds of activities are protected. Employers cannot restrict or retaliate against their employees for what they do outside of the office. Employers cannot terminate or demote employees simply for having opposing political views or affiliations.

Damore potentially has a case based on this claim, as he was fired for expressing his views on gender and for his political views. Damore wrote a reasoned memo on what he thought were problematic political biases and Google responded by firing him. However, Google could argue that he wasn’t fired for his political affiliations or his activities, but for creating a hostile work environment. According to Google, Damore’s views would make the women at their offices uncomfortable. This is a real issue for Google, because promotions are based on peer review; Google cannot trust that Damore will be treated fairly by women or that he will treat women fairly after his memo ended up in the evening news.

Is Damore a Whistleblower?

Another route Damore could try is claiming to be a whistleblower. Affirmative action programs are often viewed as discriminatory against “majority” groups like white men. Since employment law prohibits discrimination based on race or gender, Google’s plans to admit only women into certain programs would be potentially discriminatory. If that is true, then Damore is a whistleblower against such discrimination.

Of course, claiming to be a whistleblower only works if Google is breaking the law and Damore is reporting it. Affirmative action programs have survived this long because courts often do not consider them illegal discrimination. The racism and sexism that employment law protects against is based on animus – hostility towards a certain group. Proponents have often won by arguing that their discrimination is based on helping certain groups rather than putting down other groups. Affirmative action is not about being anti-men, but pro-women. The fact that there are only two genders and that one is automatically disfavored if the other gender is favored doesn’t often enter into the analysis.

A Sign of the Times

Ironically, the Civil Rights Act that an employment attorney might try to invoke is premised on the very principles that Damore was writing against. The Civil Rights Act is premised on the idea of protecting race and gender. Granted, most employment suits are brought to protect specific races and genders, but the overall focus is on a person’s surface traits instead of viewpoint discrimination. At this time, there is simply no legal framework Damore could use to receive compensation for his termination.

This is a real shame though. Damore’s memo was articulate and very persuasive. It had a clear thesis, its premises were supported by examples, and it pinpointed specific problems and offered solutions to the problems it identified. To be sure, Damore himself makes a number of assumptions and has a number of biases in his own memo. Still, Damore makes a number of points that are very interesting and engaging. As a hiring manager, I did notice that men were more likely to ask for and negotiate for a higher salary than women. Whether or not that discrepancy exists because of biological differences is up to debate, but that is the point. Google should have engaged in that debate instead of firing the author of that debate.

Google has failed to live up to its business values and philosophies by terminating Damore. But the damage is not limited to Google’s reputation or bottom line. It is rare today to find thoughtful and intelligent political discussion in the public sphere; last year’s presidential election is an example of exactly how far we, as a nation, have fallen in that regard.

Google had a perfect opportunity to engage in the kind of frank debate that the public desperately needs. Google dropped the ball. Small wonder then, that a brainless sound bite machine like Donald Trump should prevail in today’s political environment, when even Google derides an opportunity for outstanding debate. I hope Damore finds a worthy opponent to continue his discussion. In the meantime, I will mourn for our public discourse.

Fox News and the Pitfalls of Sexual Harassment

Over the weekend, another Fox News host has come under fire for sexual harassment. Fox News suspended Eric Bolling after three women accused him of sending lewd photos. Twitter users were quick to point out Bolling’s hypocrisy by resurrecting a Bolling Tweet from 2011, asking “why would anyone take a picture of one’s junk anyway?”Bolling’s suspension is the latest in a string of sexual harassment scandals that have rocked the network:

To date, Fox News has paid $13 million to settle claims of sexual harassment towards women by its employees. Even if Fox News doesn’t believe in feminism, its shareholders have a significant interest in avoiding lawsuits that result in million dollar payments to the other party. So can a profit minded company avoid these kinds of harassment claims?

Sexual HarassmentChange the Corporate Culture

Given the recent terminations of prominent television hosts and high ranking executives, Fox News probably has a larger issue with sexual harassment than a couple of rogue employees. Critics might be quick to point to Fox New’s political affiliations; how could an organization that defended “grab them by the pussy” not be a hostile work environment? However, most politically conservative organizations (Heritage Foundation, National Review, Federalist Society, etc.) don’t have the same sexual harassment problems that Fox News has right now. Fox News doesn’t have to change its political stances to police its employee’s sexual abuses.

One of the biggest factors is how the organization deals with sexual harassment. If the company settles a complaint and demands the victim keep quiet about his or her allegations, the problem will continue. Likewise, if the company merely transfers the harasser between departments, then the problem with persist. The harasser will feel protected and will continue with different women. The Catholic Church had similar issues for decades, transferring priests accused of sexually molesting boys between different churches while praying that the offending priests would stop if they were moved away from the initial victims.

Another big factor in corporate sexual harassment is failure to publically highlight the issue. Allegations of sexual abuse are often embarrassing for the abuser, the abusee, and the company at large. However, if the company fails to educate its employees about sexual harassment, even if employees know or suspect sexual abuse is occurring, the company will be promoting the behavior. Corporate managers might not condone sexual abuse, but failure to speak up will be read as implicit approval of the harasser’s behavior.

Ditch the Arbitration System

Fox News favors arbitration boards to settle complaints, including them in every employment contract. Although arbitration is a legal way of resolving disputes, companies relying on arbitration to address sexual harassment should use Fox News as a model of how everything can go wrong. Arbitration is best described as an informal trial. Instead of a judge, an arbitrator decides the case. Arbitration usually doesn’t follow the rules of evidence, allowing the arbitrator to make decisions faster and at a cheaper cost than a judge would.

Although arbitration is a reasonable way to settle many business disputes, sexual harassment is not the best issue for arbitration to address. In a normal trial, both parties are assured that the judge will remain objective and will consider the arguments presented by both sides. With arbitration, the arbitrator is often selected by the company itself. Even if the arbitrator is truly objective, employees making serious allegations may not trust the arbitrator to be impartial.

More importantly, arbitrations are not subject to the same rules of evidence. Corporations might favor arbitration as a cheaper alternative, but there is an important rule of evidence that makes trial more equitable for the accuser. In a normal trial, the defendant is not allowed to introduce evidence of the victim’s own impropriety as a defense.  In other words, just because Jane sleeps around with different men doesn’t mean that she welcomes John’s sexual advances. Throwing out this rule of evidence only serves to make arbitration another potential avenue to harass the victim. Even worse, arbitration is binding and appeals are rarely granted, so any decision that the arbitrator makes will be binding.

Arbitration is obviously flawed from the employee’s view, but these downsides also affect the employer. Arbitration can manage a few isolated cases, but if the floodgates open, as they are opening now for Fox News, the outpour will be more than Human Resource and in house counsel can manage. The problem with relying on a system that overwhelming favors one party is that when the other parties no longer have faith in the system, that system will collapse.

Fox News has avoided its sexual harassment claims for decades, but the built up has now destroyed the dam.  Hopefully a change in corporate culture can built a more stable foundation.

Tip Pooling: Department of Labor Reverses Stance on Controversial Practice

In the U.S., tips are an enormous part of how some people make a living. This is because tipping, and a practice of tip credits, is a common way employers can pay less than minimum wage to their employees. Tip pooling is a practice where an employer requires tipped employees to share those tips. Sometimes employers will even require that these tipped employees put their tips in a pool including the “back of the house”-employees such as cooks who don’t get tips. Tip pooling with employees that aren’t normally tipped was made illegal at a federal level back in 2011 after an Obama administration ruling. The ruling was primarily in response to a 9th Circuit ruling that allowed employers to implement a tipping pool including back-end employees if they did not take a tip credit-the credit which allows employers to pay a tipped employee less than minimum wage. The theory behind the DoL decision was that tips are essentially gifts to employees and become the property of that employee when given. While a tipping pool with all tipped employees isn’t a huge issue as they are all contributing, forcing employees to participate in a tipping pool with non-tipped employees is a bit like forcing them to give away part of their tips.

However, just last week Trump’s Department of Labor (DoL) issued a statement reversing this position on tip pooling. This move certainly allows more leeway to employers but has the potential to leave employees normally relying on tips seeing much less money. Once fully enacted, it could even allow an employer who pays their employees minimum wage and doesn’t take a tip credit to outright keep all tips customers give employees.

Tip PoolingThe rule change isn’t going to take effect immediately. While the DoL won’t be enforcing the tip pooling rule, it’s new rules on the practice are expected to take around a year to see light. In some states it won’t take effect at all due to state law (California and New York especially) or case law making the practice illegal regardless of the position of the federal government.

With tipping such a huge part of how some people make a living, as well as something which can leave a misinformed employer in hot water, it’s important to fully understand how our laws on tipping work. Let’s take a look at federal tipping laws so you can best know your rights and protect your business.

Tips on Tipping

Most federal law on tips is fairly well defined and easily explained. However, at a state level things can get a bit more complicated. As usual, the federal standard is a minimum standard that states can apply additional restrictions on top of. There’s too much there in state law to get into in a single article but the most common one to keep in mind is that minimum wage varies from state to state and even city to city, so where minimum wage comes up in the federal laws you can assume the state or city minimum wage where you live applies to this standard.

A tipped employee, those who would normally be easily added to a tip pool, must regularly make more than $30 a month in tips. Where this is the case, under federal law, an employer can pay these tipped employees as little as $2.13 an hour. However, this doesn’t override minimum wage laws. The tips a given employee is given are taken as a tip credit. This credit is put towards the minimum wage. If the wages an employer pays plus this tip credit leave an employee earning the equivalent or more than minimum wage, the employer is in the clear. If this is not the case, the employer is required to make up the difference. For instance, if an employee worked 10 hours at the federal minimum wage of $7.25 and was tipped ten times that wage ($72.50) then the employer would only have to pay that tipped employee a hourly rate of $2.13 because their tips create a tax credit easily surpassing federal minimum wage. Even if the employee only was given $51.20 in tips over those ten hours, the difference between the $2.13 per hour number and the federal minimum wage, the employer could still get away with paying only $2.13 per hour.

As of now, tips are the sole property of the tipped employee who was given the tip–no matter how much they add up to. It is illegal for an employer to require an employee to hand over any part of their tips or even to make an employment agreement with terms requiring that employee to give them some or all of their tips. The exception to this, at least now, is a valid tip pool-pooling tips and redistributing them equally among employees. However, the tip pool is not an exception to the tip credit rules. If the amount you take out of a tip pool leaves you below minimum wage when your hourly wages are added, your employer still needs to make up the difference.

There a few corner cases that change how these general rules work. First, if you work more than 20% of your hours in a workweek on non-tipped duties then an employer cannot take a tip credit for these hours. Instead, they need to pay at least minimum wage for all these non-tipped hours and the tip credit formula is only applied to your tipped hours.

When you tip with a credit card, an employer can take the percentage charged by the credit card company on each sale out of an employee’s tips. However, this reduced amount and not the full amount is what is used as a tip credit when calculating whether tips take an employee up to or over minimum wage. Also, compulsory charges (think required tips when you have a lot of people eating at once) don’t count towards tips received for a tip credit unless the amount is actually given to the employeee.

Finally, as of 1996, there’s a bit of a boon for the high school and college summer workers. If you are under 20 years old, the minimum wage if you work as a tipped employee is boosted to $4.25 per hour in the first 90 days after you start work. The tip credit still only requires employers to pay the minimum wage of where you live, but no matter what tips you earn you’ll always get at least $4.25 per hour.

Change Is Coming, But Not Here Yet

As mentioned above, the changes to tip pooling are not officially in effect yet. However, with the DoL not enforcing the tip pooling rules the only thing stopping employers is state law on the issue. If you make a large portion of your living from tips, you may see yourself being forced to tighten the belt a little bit in the coming days. New York has laws preventing tip pooling with non-tipped employees. California doesn’t allow employers to take a tip credit whatsoever-requiring full minimum wage on top of any tips earned. However, California does allow for tip pooling.

So the big elephant in the room came from the second paragraph of this article-will employers be able to take your tips outright if they don’t take a tax credit? In theory yes, but it’s far too soon to tell. Not only are the laws not finalized, there are enormous employee morale and publicity issues to think about. Even beyond that, the patchwork of state law and the uncertainty of the current DoL’s eventual position on the issue make any decision to take such action incredibly risky for an employer. So for now, it seems unlikely. However, Trump’s DoL has still dealt a blow to the tipped worker. You may still need to prepare yourself to see less out of your tips each month.