Heard of the Pregnant Worker’s Fairness Act? The major change with this federal law is that employers now must provide accommodations for an employee experiencing a “limitation” due to pregnancy. Previously, you were only legally obligated to provide accommodations if the employee had a pregnancy-related “disability.” So basically, limitation vs. disability.
In some ways, this seems like semantics. But when it comes down to how these words are defined in the law (we won’t bore you with the details of that here), there can be a lot of gray areas and disagreement over whether something is a “limitation” or rises to the level of “disability.” Listen to Paul Edwards and Grace Godlasky break down the PWFA, and why it matters in your business.
Voice Over: You’re about to listen to an episode of What the Hell Just Happened. Join Paul Edwards and his guests as they discuss interesting HR topics and solve some of our listeners’ submitted questions.
Paul: And occasionally I’ll go off HR topic and talk about whatever I want to talk about. Think barbecue. Space exploration. Technology. Money. Managing, Business. Things that interest all of us.
Voice Over: We get a lot of emails with questions. Stay tuned for details on how you can submit yours to the show. And now let’s get started.
Ally: It’s a lot.
Paul: I love this.
Ally: It’s…Yeah, I read it and I was like, “There’s no way.” [laughing] This is unique. We’ve seen a lot of, I think, like, really wild employment stories, but this one is very unique. I don’t think we’ll see another one.
Paul: They don’t always surface.
Ally: No, they don’t and this one’s tiny too.
Paul: This is a very small company.
Paul: It’s going to be a huge impact on their bottom line. So, okay, so, you know, the podcast has already started, Ally.
Paul: If you didn’t know it. If anybody is listening in, Ally and I were just talking about kind of what we’re going to talk about and we just found this and you’ve seen it, I think it’s in everybody’s feed, although we’re HR nerds, so it’s in our feed.
Ally: I think we got it right at the beginning of it, but I did see a pop up in a couple other places afterwards.
Paul: So what is that? What is the title? What is the headline on this one that everybody’s seeing?
Ally: This is a news release from the Department of Labor. ‘Employee Testifies Restaurants Offered Priest to Extract Confessions of Workplace “Sins,”’ and a federal court ordered a payment to 35 workers and that is exactly what happened. An employer brought in an alleged priest? There hasn’t been any confirmation that this was a real priest.
Ally: Although to clarify, it’s wrong whether the priest is real or not.
Paul: I have a confession to make. Well, see what I did there? [laughing]
Paul: See what I did there?
Ally: Wait. The priest isn’t here yet.
Paul: I thought when I first read this and I didn’t read through the whole complaint, I was like, “This is brilliant. I can’t believe this.” For A) that this employer thought of this, B) that the employees fell for it. I think there’s always this underlying need to know what’s going on in your business and you’re always trying to figure out who’s doing what, where, etc. I guess the moral of this thing is the more bad things you’re up to as an employer, the more you need to pull this kind of stuff.
Ally: The more creative you’re going to be with your solution.
Paul: Okay. So, Ally, let’s give them some more details. So they bring a priest in. I’m going to give one detail. I believe, and I can’t tell from reading all the stories and I can’t even tell from the complaint, but there’s a component that we’re going to reveal at the end of this, which makes me feel this is what the order of things…I believe that they were messing up when it came to paying overtime properly and I believe that they were pooling tips improperly and someone anonymously from the business read something on Reddit or on the Internet and went, “Hey, wait a minute, I think my employer is violating these rules.” And they sent a complaint in to the California Department of Labor, their version of the Department of Labor, underneath the Wage Theft Act, which there’s a bunch of those around the country, but California has it right.
Ally: That’s how I understood it as well as like the order of the things happening. So that complaint was made and then that’s when this alleged priest was brought in and the employer brought them in and told the employees that the priest was there to hear confessions. This was during work hours.
Paul: Well, that’s good. It’s paid.
Paul: They got that part right.
Ally: They didn’t have them come in late.
Paul: Did they have them come in after and not pay them?
Ally: It might have been a full day thing. Honestly, I don’t know. But the employee told the court that the priest urged them to get their sins out, but then asked very specific questions like, “Have the employees stolen from their employer? Have they been late for work? Have they done anything to harm their employer or do they have bad intentions towards their employer?” So there was a very specific goal from this priest.
Paul: Okay. Again, I wasn’t there. So I think we have the wage and hour complaint and then…[laughing] So their thinking, I believe, was, if we can get some dirt on different employees because they probably don’t know but they have an idea who may have filed the complaint. What they’re looking for is to impeach the employee’s testimony to say, “You can’t listen to this employee because X, Y, and Z,” which is just so incredibly misguided because, look, everybody has to follow rules and regulations. All right? So every industry has it. So I mentioned tip pooling was something that’s generally unique to the service industry, particularly to restaurants. But there’s rules against managers participating in tip pools, and it’s the Department of Labor at the federal level and certainly California at the state level, have defined and redefined and limited who can participate when and why. For the most part, if you’re a manager you can’t participate, for the most part. There are exceptions to it. In our industry, medical, dental, you know, all the folks out there, our version of this mistake is that we misclassify someone as an exempt employee and don’t track their hours or pay them properly because we think salary means no overtime. And there’s a whole nother set of rules there. Or we misclassify someone as an independent contractor. When I say ‘we’, I don’t mean me and I don’t mean CEDR because we are not going to do that. I mean you as a listener and an HR person or the owner of your practice may misclassify some people this way. So that’s our version of this mistake. So they the not-priest in and I take it the Department of Labor, when they found out about this, was not happy. [laughing]
Ally: Yeah. This news release was pretty short and some of the other articles I found were pretty short as well. So I wasn’t able to exactly figure out…Did another employee then go make another complaint? And was like, “Hey, there’s a priest here, there’s something weird going on.”
Ally: Or was it because the initial complaint had been made and they were already under investigation, did that somehow come to light? But either way, no, the Department of Labor was not too happy about that. They brought in some employees to talk about what exactly had happened and also why were they participating? Like what made these employees think, “I have to do this.” Even though it’s obviously not a normal thing to be happening.
Paul: Did they have any details? Were there any details?
Ally: Yeah. So this was a restaurant in California.
Paul: I’m going to guess lots of immigrant workers.
Paul: I’m going to also guess that and this is painting with a wide brush, but in order for this to be effective, a lot of them would have to be Catholic or Catholic adjacent in their beliefs, because no non-Catholic is going to go in and talk to a priest and confessor since because we don’t even know how to do it. We don’t know what to do.
Paul: Me being one of the non-Catholics.
Ally: No, I’m with you there. You hit the nail on the head. One of the managers at the restaurant told them that there were going to be immigration issues raised by the investigation. So I think it’s going back to what you said, what their goal there was, “What dirt can I get through this priest on my employees?”
Paul: And how can I create other fear?
Ally: And throw in the immigration and hopefully that would, you know, again, we’re speculating here, but probably the employer’s goal was, “Okay, this will scare them enough that whatever complaint they initially made will disappear-”
Paul: Or they won’t add to it.
Ally: Or they won’t add to it. Right. And I can threaten them because if I get anything out of this priest, I can say, “Hey, well, you told the priest that you milked the clock, so now I know dirt on you. You can’t share the dirt on me.”
Ally: And like you said, completely misguided. Not at all the way to handle a wage and hour violation. [laughing]
Paul: And these rules are set. That’s the stupid thing here. You can go back and investigate and you can find whether or not they were paid properly for overtime. You can look at the number of hours they worked. You can tell whether or not the tips were split the wrong way. There’s records of all of that stuff, if you’re doing it, and sometimes there’s no records. And let me tell you something, that’s even worse for you as an employer if there’s no records, because at that point people begin to make accusations of which those accusations carry quite a bit of weight because there is no proof against it. So if you say, “Well, they didn’t work overtime.” The answer from the Department of Labor is, “Prove it. Let me see the records.” “Well, I can’t find the records for that period of time, but trust me, we were tracking hours.” No, that’s not how it works. There’s a law that says you have to keep the records and produce them for us if we ask for them. So in the end, the settlement was, so far, it looks like $150,000 total. There were $75,000 in back wages and because this is what the Department of Labor can do at both the federal level and at the state level, they doubled those damages. They just doubled what it was. And so that’s all to be rewarded to the employees. So they have to pay it out to several employees. They tacked on another five grand, which was their statute limitation. So I want everybody to catch that last part. This is the bear. So why did they give them the extra money, Ally? There was something that they said that they that the employer was doing. Like it was one thing that they didn’t pay them properly. It’s another thing that they went after the employees with the priest.
Ally: Yeah. Per the news release, it was for the ‘willful nature of the violations’.
Ally: Because sometimes these claims can come and it was accidental and I think that’s something that we see in our industry a lot. Like you accidentally misclassify someone as nonexempt. That’s not going to really affect the way that the claim goes. You’re still going to have to pay for things, but it was an accident. This was very deliberate, not just, the initial violations of the tip pooling and the overtime, but then even more so, bringing in the “priest”. I got to put quotes around that. [laughing]
Paul: Yeah, it’s brutal. It’s just retaliation. I mean they just found like, you went in and said, “Because you filed this, now it’s going to cause immigration to come in here,” which was not true. They were doing everything they could to retaliate against the employees, to get them to not cooperate with the investigation.
Paul: And so you add in willful, you add in retaliation and you get that, “Well, the most that we can award is to award how much they’re owed plus double that amount.”
Paul: I think they call it trebeling the damages. You just turn it up. They just cranked it up. So they paid.You know, we don’t know what their legal fees were here, but if they were represented, I would tack on another $30,000 to $60,000 in legal fees that the restaurant had to pay to their own attorneys as they dealt with the Department of Labor.
Ally: Yep. And I mean, this is a pretty small business. It’s just a taco restaurant and I think one or two locations.
Paul: They have three locations.
Ally: Oh, yeah. But I do just want to say that it’s likely that they would not have owed as much had they just –
Paul: Paid it.
Ally: Yeah. The initial violation.
Paul: So let me just say, had they confessed their sins to the Department of labor and just come clean and done the right thing, which I believe was what the purpose of confessing your sins is, they would have come out a whole lot better if they’d actually followed their own guidance. And I think what’s also interesting is, is that surely they were forced to confess their sins to their employees and put up all kinds of posters and stuff and outline the settlement and tell everybody what they owed and tell everybody that, you know, this these are the rules around tip pooling and put everything up on the walls and make it clear to the employees.
Ally: Yes, I mean, they lost out on all this money. There’s no way to hide that. Like you said, they’ve got to make it clear to their employees. And I checked with their Google reviews the day that this news release was put out and it’s going to affect their business from a consumer perspective as well. So a big loss all the way. A perfect example of how not to handle a wage and hour violation.
Paul: Leave you with this thought. There are so many employment laws and rules that you have to follow. Anybody can open any business in the United States with lots of knowledge or zero knowledge of these things. We usually start off as small businesses and we grow and we’re kind of doing things the way we’re doing them, the way they make sense. Those ways don’t always align with how employment law treats you, wage and hour rules and all those things. So as you start hiring an employee or two or three or ten or 20, you’ve got to keep revisiting this subject and just learn what you can and can’t do. I mean, that’s all we talk about here on What the hell just happened in HR!? is, you know, guess what the hell just happened? And in this case, someone got in trouble with the Department of Labor. They doubled down, brought in a priest, a fake priest, got confessions, tried to use the confessions and intimidation in order to get the employees not to talk to the Department of Labor and that did not turn out very well for them.
Paul: Shocking. Okay, Ally, thank you so much for bringing this to our attention.
Ally: Thanks, Paul.
Voice Over: Thanks for joining us for this week’s episode of What the Hell Just Happened. If you have an HR issue, question, or just want to add a comment about something Paul said, record it on your phone and send it to email@example.com. We might even ask if we can play it on the show. Don’t forget to Like and Subscribe and join us again next week.