Kentucky Employment Law Blog

Tip Credit Not Applicable to Bartenders and Servers Where More Than 20% of Work Is Performing Related But Nontipped Duties

Bartenders and servers almost always are subject to the "tip credit" that makes up the difference between their hourly pay rate, which is $2.13, and the minimum wage. A group of current and former servers and bartenders at Applebee's restaurants filed a class action lawsuit under the federal Fair Labor Standards Act seeking unpaid wages and challenging the application of the "tip credit" to non-tip producing duties they performed during their shifts. Thus, the case presented the question of whether and to how much working time does the "tip credit" apply to time spent on tasks that produce no tips for the bartender or server.  

The United States Court of Appeals for the Eighth Circuit ruled recently in Fast v. Applebee's International, Inc., Nos. 10-1725/10-1726 ( April 21, 2011), as follows:

employees who spend 'substantial time' (defined as more than 20%) performing related but non-tipped duty should be paid the full minimum wage for that time without the tip credit[.]

The import of this ruling is that the "tip credit" does not apply to all the hours worked by a bartender, server or other tipped employee, provided that he or she spends more than 20% of the working time performing nontipped tasks and duties.

Robert L. Abell
www.RobertAbellLaw.com 

Kentucky Workers Compensation ALJ May Apportion Impairment Rating

An ALJ may apportion the impairment rating for an injury in a Kentucky workers compensation case. The Kentucky Supreme Court clarified the scope of the ALJ's discretion recently in Pella Corp. v Bernstein, No 2010-SC-448-WC (April 21, 2011).

The injured worker, Joyce Bernstein suffered various injuries including shoulder injuries. She was treated for the shoulder injuries by an orthopedic surgeon, Dr. Jackson, who assigned a 10% permanent impairment rating to her shoulder injuries further specifying on the Form 107 a greater degree of impairment to the left shoulder than to the right. However, Dr. Jackson did not apportion the 10% impairment among the shoulders. Subsequently, it developed, according to testimony by Bernstein, that her right shoulder had healed.

The Supreme Court, in affirming a ruling by the Court of Appeals, ruled that, and ALJ could properly attribute more than half of the 10% impairment rating to the shoulders to the left shoulder. Toward this ruling the Court recited examples and instances of the discretion an ALJ has to select the appropriate impairment rating:

• an ALJ may consult the American Medical Association's Guides to the Evaluation of Permanent Impairment when considering the medical evidence and deciding which expert to rely upon
   
• an ALJ may rely on at least some of the conversion tables found in the Guides, such as the tables used combine whole-person impairment ratings or to convert a binaural hearing impairment to a whole-person impairment
   
• an ALJ may also translate a Class 1-5 impairment assigned to a medical condition under the Fourth or Fifth Edition of the Guides into a percentage impairment by using the last edition that equated Class 1-5 impairment with percentages

Robert L. Abell
www.RobertAbellLaw.com

EEOC Issues Final ADA Regulations

The EEOC has issued its final regulations following recent amendments to the Americans with Disabilities Act (ADA). Some highlights are as follows:

• Whether or not an activity is a "major life activity" is not determined by reference to whether it is of "central importance to the daily life." 29 C.F.R. § 1630.2(i)(2)
   
• A person with a "record of" a disability is entitled to seek accommodations. 29 CFR § 1630.2(k)(3)
   
•  "Condition, manner, or duration" are useful considerations in determining whether a person suffers a substantial limitation to a major life activity, but they are optional not required factors in the relevant test. 29 CFR § 1630.2(j)(4)(iv); 29 CFR Part 1630  App., § 1630.2(j)(4), 76 Fed.Reg. 16978, 17013 (March 25, 2011)
   
•  The duration of an impairment is a factor relevant to determining whether an impairment substantially limits a major life activity but there is no minimum duration. The impairment can be less than six months and can be short-term if serious enough. 29 CFR § 1630.2(j)(1)(ix)
   
• For a person to have a covered disability he or she need be affected only with regard to one major life activity, meaning an individual is not excluded from ADA coverage because of their ability to do many things, as long as they are substantially limited in one major life activity. 29 CFR § 1630.2(j)(1)(viii); 29 CFR § 1630.2(j)(4)(iii).

Robert L. Abell
www.RobertAbellLaw.com

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