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New York City moves to protect fast food workers

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A new law in New York City is one of the first to limit fast food chains’ power to fire employees at whim, as Amelia Levin outlines

The legislation, which was passed by the New York City Council in December, is a measure that requires employers seeking to lay off workers or cut their hours by at least 15% to show “bona fide economic reason” and prove “just cause.” Typically, that includes proving that the employee did not respond to disciplinary actions or showed egregious reasons for termination such as theft.

The business must also show proof of reduced foot traffic or revenue to justify any layoffs. The law was challenged in court by the Restaurant Law Center (part of the National Restaurant Association) and the New York State Restaurant Association. Those actions failed, and the new measures took effect in July. The Service Employees International Union (SEIU), which represents property service workers, including office cleaners, security officers, fast-food workers and others across 10 states was behind the original lawsuit.

Changes to tips

In another pro-employee development, the U.S. Department of Labor announced a final rule delaying portions of the 2020 Tip final rule until Dec. 31. Currently, the Tip final rule, which became effective in April, prohibits employers, including supervisors and managers, from keeping tips received by workers, regardless of whether the employer takes a credit for workers’ tips toward their obligation to pay those workers minimum wage. In addition, an employer that collects tips for tip pools must distribute tips fully no later than the regular payday for the workweek or pay period in which the establishment collected the tips.

Under a proposed rule change, an employer can only claim the tip credit when workers do tasks that are part of their tipped job. The DOL says it believes that the 2020 Tip final rule may fall short of providing the intended clarity and certainty for employers regarding tipped and non-tipped positions.

“Tipped workers are among those hardest hit amid the pandemic, making these essential frontline workers a priority for the Wage and Hour Division,” said Wage and Hour Division Deputy Administrator Jessica Looman. “The final rule announced today ensures that we have time to consider – fully and thoughtfully – all of the circumstances in today’s rapidly changing workplace, while allowing several portions of the 2020 rule beneficial to essential workers to take effect. Those workers deserve our careful and thoughtful consideration as we craft and implement rules that affect their well-being.”

Amelia Levin