Some of the highest paid employees in the country relative to their skill, education and knowledge are service workers that regularly receive tips. Dancers, waiters, waitresses, and bartenders often earn more than professionals including nurses and lawyers. It is not uncommon for a bartender to earn $80,000 a year or a dancer to earn $200,000 a year.

Often this leads to business managers and owners to take tip income from these workers and redistribute it or pocket it, or as a basis to set up a compensation system that does not comply with the labor code. Some employers pool tip income and distribute to all employees, some distribute on the basis of categories of jobs, and some include all employees. Some employers may attempt to use tip income in determining if the employee is getting paid minimum wage.

California law regulates gratuity and income and specifies what type of actions are prohibited. The California Division of Labor Standards Enforcement defines the term “gratuity”as follows. “Gratuity” includes any tip, gratuity, money, or part thereof, which has been paid or given to or left for an employee by a patron of a business over and above the actual amount due such business for services rendered or for goods, food, drink, or articles sold or served to such patron. Any amounts paid directly by a patron to a dancer employed by an employer subject to Industrial Welfare Commission Order No. 5 or 10 shall be deemed a gratuity. It defines the term “Business” as meaning any business establishment, or enterprise, regardless of where conducted.

The courts consistently have held that they will defer to the regulations established by such agencies as the Division of Labor Standards Enforcement and therefore the regulations are substantially law. Occasionally the court will reverse a DLSE order, but that is very rare.

The DLSE specifically states that:
No employer or agent shall collect, take, or receive any gratuity or a part thereof, that is paid, given to or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for. An employer that permits patrons to pay gratuities by credit card shall pay the employees the full amount of the gratuity that the patron indicated on the credit card slip, without any deductions for any credit card payment processing fees or costs that may be charged to the employer by the credit card company. Payment of gratuities made by patrons using credit cards shall be made to the employees not later than the next regular payday following the date the patron authorized the credit card payment.

The DLSE and the Labor Code specifically prohibit employers and their agents from taking, sharing, or receiving tip money left for employees. The term agent has been defined as every person other than the employer having the authority to hire or discharge any employee or supervise, direct, or control the acts of employees.

Tip pooling policies where waiters, waitresses, busboys, and bartenders share in the tips is deemed to be legal, because it is a long-standing practice in the restaurant industry. This was the opinion in the case of Leighton v. Old Heidelberg, Ltd., 219 Cal.App.3d 1062 (1990), but it was a split decision and may change in the future if appealed in a different district, but for now it is the law.

The DLSE also issued and opinion letter in 2005 , where it interpreted Labor Code section 351 to allow for a tip pool policy requiring the employee receiving the tip to contribute 15% of the actual tips to the tip pool and all money from the tip pool then to be distributed to the other employees in the “chain of service” based on the number of hours they worked, as is consistent with industry custom, provided:

1) Tip pool participants are limited to those employees who contribute in the
chain of the service bargained for by the patron, pursuant to industry custom
[examples of employees included in "chain of service" provided in Opinion Letter],
and

2) No employer or agent with the authority to hire or discharge any employee
or supervise, direct, or control the acts of employees may collect, take or receive
any part of the gratuities intended for the employee(s) as his or her own.

The DLSE also prohibits employers from making wage deductions from gratuities, or for using gratuities as direct or indirect credits against the employee’s wage and it also specifically disallows a recovery of credit card charges incurred by the employer.

Under federal law and employer can have an employment agreement with the employee that would allow an employer to employ so-called “tip credits” against wages owed to an employee, but the practice is illegal under California law.

California law requires every employer keep accurate records of all gratuities received by him, whether received directly from the employee or indirectly by means of deductions from the wages of the employee or otherwise. Such records shall be open to inspection at all reasonable hours by the DLSE. The employer to keep accurate records of any gratuity received by him through any means including credit cards and because of the requirement the burden of proof regarding amounts due em ployees from credit card charges would be on the employer.
The Court of Appeal held that any cost of doing business must be borne by the employer and not the employee. Inasmuch as credit card purchases are common, the cost of credit card charges are a cost of doing business. Thus this decision had been interpreted by DLSE to prohibit any deduction from the wages of employees by the employer to recover costs incidental to tips left for employees.

Sometimes employers attempt to get around these rules and pocket a large chunk of the tips by categorizing the employee as an independent contractor and renting space to the employee or setting some sort of an arrangement where the employee pays the employer instead or purchases supplies from the employer. The DLSE and the courts have both defined the characteristics of an independent contractor and these arrangements, rarely work, because the employee is an employee and not an independent contractor.

Attorney Arnold Hernandez represents claimants in labor violations including claims for overtime and lunch break violations, and also in personal injury claims, mostly throughout San Marcos, Vista, Oceanside, Carlsbad, Escondido, and Encinitas. http://www.arnoldhernandez.com

Like the rat in the cage we are driven by rewards. It’s only human and also perhaps rat nature. Suffice it to say it’s nature.

So when compensation, the reward, becomes stagnant so does productivity. If like rats we are paid by the time we spend in the cage, then the expected level of productivity is simple compliance.

By focusing on minimum standards employees tend to get there and stay there; a comfort zone or twilight zone or Bermuda Triangle whatever else it can be called.

That comfort zone is not where you need nor want to be. Did you make a conscious decision to not do what is in the best interests of your company? Why? Don’t you ever ask what does your company need? What is the first step?

If you need to make changes, be wary of copying formulas. The best plan is the one that works best for your unique circumstances. Look first to your industry but also take a look outside your industry when looking for the right compensation plan.

The important thing is to first look for the concepts in compensation that drive your company’s performance and productivity.

Sometimes combinations of plans work the best. Simpler is better but sometimes by combining two measures, such as productivity and attendance; a compensation plan can be enhanced.

The best approach is to identify which key performance indicators should be the foundations for the compensation plan.

If you are going from a ‘time and space’ or hourly wage rate to an incentive plan then look for ways to start that change. There may be a great deal of reluctance on the part of your current employees but ask for their opinion. That way, once the plan is implemented there should be no complaints.

Talk about the new plan in your business, group and team meetings. You might start by using small gifts or cash rewards for top performance which helps employees get accustomed to the idea.

The idea is to try to modify your employee’s behavior little by little so it’s preferable to start small and gradually gain credibility. Actually rats do the same thing.

Use spreadsheets to work out the ranges of possible plans. Be wary of straight commission as it can often create internal friction. Don’t forget to look at tying part of your bonus or incentive plan to overall company performance.

Once you have a plan you can test backwards to see how it would work. Depending on your plan, you can do a trial run and see how employees react. Make certain that poor performance is not rewarded.

Establish a minimum performance level and make it the low end of your compensation scale. Make sure your plan is easily track able by both you and your employees.

Under ideal circumstances top performers should get at least two or three times more than minimal performers. Even if you are not able to create such a variation “skew” the better rewards should go toward top performance.

As with all incentives and bonuses it is important that the prize be something the employee considers of significance. Pure praise is fine but a cash reward or dinner for the family makes it tangible and real. To give someone a paltry bonus is the same as saying it does not matter. If it does not matter, why do it?

It is better to have a low base wage/salary with a large incentive component. If the base is too high there is little incentive to perform at higher levels.

Expect minimal employees to whine, complain and quit after the plan is in place. Expect to see more qualified and motivated employees wanting to join your company. Expect your better employees to become more loyal.

A well designed compensation plan can give your company a strong competitive advantage. Too bad your competitors may find it impossible to compete directly with you for the best employees.

Jack Deal is the owner of Jack D. Deal Business Consulting, Santa Cruz, CA. Related articles can be found at http://www.jddeal.com/blog/human_resources and http://www.freeandinquiringmind.typepad.com

Among company benefits, more often than not employees rank health insurance as the more important. It is estimated that more than 60% of American who have health care receives it through some type of employer sponsored group plan. While various state regulations differ, there are certain benefits to having coverage through an employer. This makes the offering of health care plans a strong bargaining tool. Many employees take a lower wage in order to get good insurance. Small business owners are posed with some challenges, however because the rising costs of offering health care is making it increasingly difficult to give employees the level of benefits that larger companies can offer.

Business owners can search for company health insurance by large, national organizations or by state. By going state by state to find a company, business owners may be able to save some money. An internet search can turn up dozens of companies. They should type in the state, then health insurance. California, for example, returns literally dozens of companies that are specific to that state.

Types of Group Health Insurance

Traditional
This type of insurance is the most flexible. Traditional coverage, also known as indemnity coverage, allows the person to see any doctor or hospital of their choosing, see specialists without a referral and the insurance company is unable to determine if a visit to a doctor or specialist is necessary or not. Unfortunately, this type of coverage is also the most expensive. Many companies have opted to switch this type of plan for more affordable health care. Small business owners almost certainly have to opt for less expensive plans.

HMO
Health maintenance organizations (HMOs) were offered as the first alternatives to traditional coverage. An HMO uses a network of doctors, hospitals and health care facilities to keep health care costs low. The person must choose a doctor who then has to approve visits to other doctors and specialists. This is the least flexible of the plans, but the least expensive.

PPO
Preferred provider organizations (PPOs) have found their way to the top of the list as the most popular choice for healthcare plans that are employee sponsored. More of a discount plan, a PPO has a network of doctors and hospitals that provide health care at a reduced fee to PPO members. While there is more flexibility with this program, patients may find themselves making higher payments to doctors who are not in the network.

POS
Point of service (POS) plans, also known as open ended HMOs, are a combination of an HMO and a PPO. Members have the option of selecting a primary care physician but that physician can be in the network (for a lower price) or out of the network (for a higher price).

It is important for companies to determine the best type of plan to offer employees when it comes to health care plan. Small business owners should pay particularly close attention to the level of benefits they can offer as well as costs. Coverage costs can vary and a company’s employee base can fluctuate, change or grow. A company based health plan must be able to keep up with the changes. It is a good idea for companies, large or small, to reevaluate their employee benefits package, particularly health care plans, each year. It is important to employees and can be the difference between attracting top notch employees who stay and mediocre employees who increase the turnover rate. Employee health care is well worth the time and cost.

Find other articles related to Health Insurance
by Anthony Smith at:

http://healthinsuranceinfo4u.com

Recently the California Supreme Court rendered a decision in interpreting California Labor Code Section 226.7.

The issue was whether Labor Code section 226.7 provided for payment of one additional hour of pay when an employer failed to provide a meal break after five hours of work or a rest period after four hours of work and therefore it was pay and subject to a three year statute of limitations, meaning the employee could bring a claim three years after the fact, or if it was penalty and subject to a one year statute of limitations. In the case of Murphy v. Kenneth Cole Productions, Inc., the Supreme court addressed the issued.

In this case the Supreme Court summarized the facts as follows:

“John Paul Murphy worked as a store manager in a Kenneth Cole Productions (KCP) retail clothing store from June 2000 until June 19, 2002, during which he was paid a weekly salary. The store was open from 9:30 a.m. to 8:00 p.m., Monday through Saturday, and 11:00 a.m. to 6:00 p.m. on Sunday. On a typical day, Murphy and another employee arrived around 8:30 or 9:00 a.m. to open the store. Between 9:30 a.m. and 1:00 p.m., Murphy did nothing other than make sales, receive or transfer product, process markdowns and clean.”

“During a usual weekday afternoon, the second shift of either one or two people arrived at 1:00 p.m. The employee who had opened the store with Murphy would go to lunch, and Murphy and another employee would begin carrying merchandise into the stockroom while covering the sales floor. At some point, Murphy would go to the office to eat as he continued to work. By 2:00 p.m. he was either on the sales floor or working back in the stockroom. Murphy was scheduled to leave at 6:00 p.m., but he often would have customers on the sales floor, or would do some human resources paperwork.”

“Murphy’s duties when he worked the closing shift from noon until 8:00 p.m. were essentially the same as when he worked the opening shift. On most days, he was on the sales floor or in the stockroom from 12:30 to 4:30 p.m. At 4:30 p.m. he would try to eat lunch while he checked KCP company voice mail and e-mail in the office, and then worked on the sales floor until closing time. After the store was closed, Murphy and a sales associate would verify the bank deposit, clean up the store, put shoes away, vacuum and empty the garbage. Typically, they would finish cleaning around 8:45 or 9:00 p.m.”

“Murphy regularly worked 9- to 10-hour days, during which he was only able to take an uninterrupted, duty-free meal period approximately once every two weeks. He rarely, if ever, had the opportunity to take a rest period and, on occasion, was unable to go to the restroom.”

Plaintiff Murphy resigned on June 19, 2002 and then filed a wage claim with the Labor Commissioner.
About eight months later the Labor Commissioner conducted a hearing and issued a decision in Murphy’s favor and awarded unpaid overtime, interest, and waiting time penalties. KCP appealed it to Superior Court and plaintiff asserted claims for meal and rest period violations. The superior court permitted the additional claims.

The trial court awarded payment for missed meal and rest periods applying the three year statute of limitations under Code of Civil Procedure section 338. KCP appealed from the trail court judgment. The court of appeal held the statue of limitation is one year and that claims may not be raised for the first time on de novo appeal from an administrative hearing in front of the Labor Commissioner. The plaintiff appealed to California Supreme Court.

Arnold Hernandez is an overtime and wage and hour attorney representing clients in San Diego, Riverside, Imperial, and Orange County and throughout Southern California, for additional information and the full version of the article go to http://www.arnoldhernandez.com

Have you ever been involved in an accident at work? Hopefully the answer is no, but please realize that accidents at work do happen and more often than you may think. Most of the time it’s a matter of a specific hazard but there are a number of procedures that can prevent an accident at work from occurring in the first place.

Your Personal Safety Around The Workplace

Your employers have to make sure that adequate safety measures are in place in and around the whole of your workplace. Accidents are usually an unfortunate event, or usually a series of events, but depending on the type of work that is being carried out, practical and substantial safety measures must be implemented to prevent an accident at work. This keeps the accident risk to a minimum although there is never a 100% certainty that nothing will happen.

Providing Proper Equipment For The Job

Depending on the type of work that you are doing, your employers have to make sure that you are equipped with everything that you need, both physically and in terms of information, to keep you safe. There are several factors that need to be fully addressed like the tasks you have to carry out, the materials involved and the risk factor of your operations. If there is an increased in risk in one or more of your operations you need to be informed in due time of this fact. This risk increase could be the result of a job parameter changing.

Correct Training For Everyone

Suitable training for any job is essential not only for you but also for your colleagues at your workplace. Employers need to make sure that you aren’t being put at risk by other workers. If they are not trained correctly, or for example come drunk to work and something happens to you then the employers are directly responsible and it’s considered a liability.

Employers are directly responsible for the conditions in which you work. There has to be proper ventilation, lighting, safety gear and so on. If one or more of these factors are disregarded and an accident at work happens you are entitled to lodge an accident at work claim.

It is a fact that the majority of people who are entitled to compensation never make a claim. Generally this is because of fear. Fear of the employer, fear of co-workers, fear or losing the job and so on. Most will simply claim sick pay and never report the accident at work. We have a duty to make sure that others do not suffer the same way and that proper safety procedures are implemented. This is not being a troublemaker. If your injury has been caused by negligence then make a claim.

This is important: Do not ignore the accident. If it has happened to you then it will happen to someone else as well. Apart from financial compensation, your action in making a claim and highlighting the problem helps others and could even save lives. People don’t go looking for an accident at work so there is no need to feel guilty.

So, basically you have 2 options:

1. Request An Accident At Work Claim Form.
If you think that what happened is because of neglect or ignorance then go ahead and make a claim.

Do not be threatened either by management or other workers. The fact of the matter is that you suffered an injury which should not have happened. It’s easy for others to stand back and criticize. The employers have a duty of care toward all their employees and visitors.

2. Claim Your Sick Pay And Do Nothing Else.
Think carefully before you decide to do nothing about it. An accident at work is a hazardous thing and you have to know your options in case something goes wrong.

You should always make notes of any relevant facts as soon as you are able even if you are not going to make a claim. You may change your mind and without facts it will be difficult to make a claim for your accident at work at a later date.

The Peoples Choice.info is committed to bringing you well researched articles to help you learn and also give you information which will assist in making reasoned decisions. More information on having an Accident At Work http://www.the-peoples-choice.info/accident-at-work/accident-at-work.html

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