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Liz Johnston is a labor lawyer at the law firm Verrill in Portland.
Updated: July 20, 2023
How To
How to avoid employee wage and hour pitfalls during tourist season
By Liz Johnston, Verrill
Summer in Maine means the busy season for the hospitality industry — and it’s more important than ever for employers to stay on top of wage and hour compliance.
When tourists come to town and business begins to pick up, it can be easy to lose focus on wage and hour best practices. But for Maine employers, failure to adhere to wage laws can lead to significant liability for backpay, penalties and other damages. Here are five tips to help your business stay in compliance this season and throughout the year.
Regularly review your exempt staff positions
It’s a common misconception that an employee with a “manager” title and who is paid a salary is exempt from overtime pay requirements. To be “exempt,” however, that manager must meet certain duties tests established by federal and state law — and many hospitality industry managers do not meet all requirements for the commonly used executive exemption. Accordingly, it is important that employers regularly evaluate whether their managers meet all exemption criteria to avoid liability for unpaid overtime. Even if the job description seems to fit a duties test, the work actually performed by the individual is determinative. It is also important to regularly check in with exempt staff to ensure they are primarily engaging in exempt work to maintain the exemption, because if a manager spends too much time assisting with non-managerial tasks, they may be at risk of losing their exempt status.
Keep employees on the clock for short breaks
It may seem counterintuitive to pay for breaktime, but the general rule under the Fair Labor Standards Act is that rest breaks between 5 and 20 minutes in length are considered compensable work time. This means that the time an employee spends using the restroom, retrieving something from their car, or eating a quick snack should be on the clock and paid. Bona fide meal periods of about 30 minutes when the employee is completely relieved from work, however, do not need to be paid.
Limit deductions from an employee’s pay
It happens: the cash drawer is short, equipment has been damaged, or a company uniform has been lost. Before you make up the difference by docking an employee’s pay, know that this type of deduction is not permissible under Maine law. There are limited circumstances in which an employer can require deductions from an employee’s pay, but making up for cash or inventory shortages, damage to company property, or missing uniforms with the company’s name/logo are not allowed.
Check that minors’ work schedules comply with legal limitations
In the busy season, double shifts and working late can be the norm. But employers hiring employees under age 18 must be mindful of restrictions under Maine law regarding work hours for minors — even when school is not in session. On non-school days, minors who are 16 or 17 years old generally may only work between 5 a.m. and midnight, up to 10 hours per day. The rules for employees under age 16 are more restrictive: generally, work is allowed only between 7 a.m. and 9 p.m., up to 8 hours per day, when school is not in session. Of course, it is important to also review timesheets to make sure these (and other) labor laws for minors are being observed in practice as well.
Keep managers out of the tip pool
Tips belong to the employees who earn them, and if your workplace uses a tip pool, it is important to make sure those tips stay with those employees. Owners, managers, and supervisors are not permitted to take a share of a tip pool, regardless of whether an employer takes a tip credit. Even if a manager spends some time helping tipped workers (i.e., running food or bussing tables), they should not receive a distribution from the tip pool.
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