Observations on LB400

LB400 was introduced in the Nebraska Unicameral, in January of this year to raise the minimum wage of tip earners.  The current minimum wage in Nebraska for tip earners is $2.13 an hour with restaurants ensuring tipped staff obtain at least $9.00 per hour combined standard wage and tips.  The bill was to raise the minimum wage to $4.50 an hour, without indexing the wage to the regular minimum wage.

The bill includes raises the following questions to assure compliance with wage laws:

1. Are the restaurants actually ensuring that the employees receive the $9.00 an hour combined standard wage plus tips or are they “gaming” the system to ensure more profits for the company?
2. Can the employees genuinely rely on the tips of the patrons?
3. Can “standard tips” accurately be reflected in the $9.00 per hour combined minimum standard wage plus tip?

As business owners, employers should consider reviewing current pay policies, including the often-used practice of tip pooling and/or tip splitting, in order to remain in compliance. Another compliance approach to consider would be the modification and reclassification of employees to non-tipped personnel.

 

https://trackbill.com/bill/nebraska-legislative-bill-400-change-the-minimum-wage-for-persons-compensated-by-way-of-gratuities/1636386/

 

The legislation is not finalized so there will be updates on the status of this bill.

NEW OVERTIME RULES TEMPORARILY SUSPENDED

For employers preparing to comply with the new salary exemption regulations, designated to start on December 1, 2016, the new rules have been temporarily suspended. The new regulation would have increased the minimum salary required to qualify for the executive, professional, and administrative exemptions, increasing the minimum salary from $23,660 to $47,892 annually. These exemptions are often referred to as the “white collar” exemption and if an employer failed to meet the minimum salary requirement, the employer would have to pay the employee overtime for time worked past 40 hours in a week.

The temporary injunction means the rule is suspended and will not affect employers until further hearings are held. However, due to the current political climate, it is unclear whether further hearings will occur. Thus, employers do not have to comply with the new exemption rules, but should remain prepared to implement procedures to pay overtime to employees that would not meet the new white collar exemption rules.

For employers that have already implemented policies and procedures to comply with the pending white collar exemption regulations, or those that have communicated pending changes with employees, please contact Vandenack Weaver, LLC, to discuss your options.

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