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Inside 5 10 6 Members Around Town Welcome Lucas and Quinn! Upcoming Events What's everyone up to? Our newest NHLRA Members! Notable dates www.nhlra.com â 2 8 How to keep customers happy after raising your restaurantâs prices â the Danny Meyer way From Heartland 12 New Hampshire ProStart State Invitational Recap By Amie Pariseau 17 Braised Short Ribs Recipe By Hermit Woods Winery and Eatery 19 Hospitality Scholarships Available funding for hospitality majors 21 Good Start Packaging Donates Profits to The Water Project By Melissa Breslin 23 2023 Report: Operators & Guests Crave Restaurant Technology By Garrett Calcaterra By Christopher
Vrountas,
Allison C. Ayer,
Vrountas, Ayer & Chandler, P.C. 28 USSC Says Even High Wage Earners Are Entitled to Overtime if Paid on a Daily Rate Basis 25 USDOL Fact Sheets on Tipped Employees and Typical Problems Employers Run Into From the United States Department of Labor
T.
Esquire and
Esquire,
2023 Chair of the Board
Molly Rice-Norby
Woodstock Inn Station & Brewery
2023 Vice Chair of Lodging
Brian Ferguson
Flag Hill Distillery & Winery
2023 Vice Chair of Restaurants
Nicole Barreira
Great NH Restaurants
2023 Vice Chair Allied Membership
Paul Ramsey
The Palace Theatre
Secretary/Treasurer
Bernie Lontine
110 Grill
NHLRA President & CEO
Mike Somers
NHLRA Education Foundation Executive Director
Amie Pariseau
NHLRA Membership & Business Development Director
Samantha Poole
NHLRA Office & Events Manager
AubreyLynn Goodale
NHLRA Social Media & Marketing Coordinator
If It'sthattime ofyear! Checkyour inboxfor Legislative Updates!
like
you'd
Jillya Jannetti to update us with any company news for our Members Around Town section, please email Jillya at jjannetti@nhlra.com. Want in on The Dish? www.nhlra.com â 3
m â 4 06 NOV MON 2023 BeanBags, Brews, &BBQ SMUTTYNOSE HAMPTON, NH SAVE THE DATE MONDAY, JUNE 5, 2023 JOINUSFOR: -GAMES -PRIZES -FOOD -DRINKS -MUSIC &MORE! GRAPPONE CONFERENCE CENTER CONCORD, NH
Members Around Town
Tocelebrate International WomenâsMonth andPinkBoots Society Collaboration Brew-Frogg Brewing highlightstwo womenwho participatedin thebrewday.
Martignettispotlights employeesinhonorofWomenâs HistoryMonth,International WomenâsDay,WomenâsWeek, andEqualPayDay
ZorvinoVineyardsenjoying Tuesday'ssnowday!
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Welcome Lucas and Quinn, our newest NHLRA members! www.nhlra.com â 6 Congrats to the NHLRA's Aubrey and Samantha!
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How to keep customers happy after raising your restaurantâs prices â the Danny Meyer way From
Heartland
Soyouraisedyourrestaurantâsprices Welcometotheafterparty
To kick us off, letâs acknowledge two things: 1) Raising prices can be a great long-term growth strategy for restaurants, especially when combating the pressure of high inflation.2)Higherpricescanoftentranslatetohighercustomerexpectations.
Whilesomepatronsmightbemoreforgivingofpriceincreases,manywillstart expectingmorefromyourrestaurantinreturnforthesteeperbillattheendoftheirmeal. One study showed that nearly 80% of respondents correlated higher prices to better experiences.
Thatâs why after you increase those numbers, your best bet to retain customers and attractnewonesistofocusoncultivatingaguestexperiencetheyâllhavenochoicebut tolove.
Notsurewheretostart?Youâreinluck Ifanyoneknowsabouthowtokeep customers happy after raising prices, itâs Danny Meyer
The founder of Union Square Hospitality Group and Shake Shack famously introduced a no-tipping policy at his restaurantsin2015byraisingmenuprices15-20%.
AlthoughhelaterreinstatedtipsduetotheCOVID-19pandemic,duringthefive-yearrun of his âHospitality Includedâ model, Danny not only kept loyal customers happy but managed to grow even more popular during that time despite having markedly higher prices.
Thebestpart?DannyrecentlysatdownwithHeartlandleaderstodiscusshishard-won recipe for how to create a better customer experience and make your restaurant a success higher prices and all with a philosophy he coined as âenlightened hospitality.â
Whether you ' re a multi-location, chart-topping restaurant collective or an up-andcoming hotdog cart, read on to get the ultimate guide to meeting and exceeding customer expectations from the restaurant trailblazer who literally wrote the book on hospitality:
Visittherestofthearticle.
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Empowerment Through Connections
MAY 23 | 8AM - 5PM | CHURCH LANDING, MEREDITH
Schedule Sneak Peek
Weâre excited to host Empowerment Through Connections for a second year, designed to celebrate women in the hospitality and tourism industry, provide an opportunity to connect withanddeveloppeerrelationships,andtoaddressyourtop-of-mindtopicswithagroupof industryprofessionals.Weârehardatworktocreateavaluableandinspiringagenda.
GUESTSPEAKER,DEBRASCHULER
Our morning will start with continental breakfast and our guest speaker, Debra Schuler. Her session,"PuttingThingsFirst,"willprovidepracticalstrategiesandtoolstohelpincreasefocus onyourmostimportantprioritiesandreduceand/oreliminatetheunimportant.
Living a more productive and balanced life starts with recognizing and accepting that not doingeverythingthatcomesacrossyourpathisnotonlyacceptable,itâswise.Highlyeffective people know that sometimes choosing to say ânoâ or ânot nowâ to certain personal and professionaldemandsisnecessaryinordertofocusontheirhighestprioritiesandgoals.
APRESENTATION&PANELHOSTEDBYTHENHCENTEROFNONPROFITS
Afterlunchbythelake,we'llreturnwithapresentationandpanelhostedbytheNHCenterof Nonprofits."GetOnBoard"willinspireanewgroupofleaderstoconsiderboardserviceatlocal nonprofits.ThissessionwillconcludewithapanelofcurrentNHLRA,NHLRAEF,andcommunity board members as well as highlighting how you can become directly involved with the next generationoftheindustrythroughboardwork.
INTERACTIVESESSIONWITHDUPREYHOSPITALITY'SSHERRIFERNS
The afternoon will conclude with NHLRA Board Member and Regional Director of Sales and Marketing for Duprey Hospitality, Sherri Ferns. Youâll leave Sherriâs interactive session with ideasonhowtobringeverythingthroughoutthedaytogether.
NETWORKING&CHEERSTOTHEDAY
Towrapup,foranyonewhowouldliketonetworkorclinkglassestocheeragoodday,wewill gatherupstairsatLakesideGrill.
PLEASE CONTACT AMIE PARISEAU AT APARISEAU@NHLRA.COM WITH QUESTIONS OR TO INQUIREABOUTSPONSORSHIP.
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REGISTER W O M E N I N H O S P I T A L I T Y & T O U R I S M
Upcoming Events
Saint Patrick's Dinner with guest chef, Michael Arrastia
March 18, 6 p.m. - 9 p.m.
The Westbrook Inn, Derry
Update on Evolving Discrimination Laws Webinar
March 28, 9:30 a.m. - 11 a.m.
Online
Farm to Table Vendor Showcase
April 14, noon - 4 p.m.
Hermit Woods Winery & Eatery, Meredith NH
Compliance Guide to Federal and State Youth Employment Laws Webinar
April 18, 9:30 a.m. - 11 a.m.
Online
Woodstock Inn Brewery Brewers Weekend
May 5 & 6, two-night stay
Woodstock Inn Brewery, Woodstock
Women in Hospitality: Empowerment Through Connections
May 23, 8 a.m. - 5 p.m.
Church Landing, Meredith
ServSafeÂŽ
March 20- Portsmouth
March 20- Lebanon
March 21- North Conway
April 4- Concord
April 12- Manchester
April 18- Nashua
April 26- Portsmouth
May 2- Concord
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Empowerment Through Connections
MAY 23 | 8AM - 5PM | CHURCH LANDING, MEREDITH
Sponsorship Opportunities
TheNewHampshireLodging&RestaurantAssociationEducationFoundationispleasedtohostour secondannualWomeninHospitality&Tourism.EmpowermentThroughConnectionswillbeaday tocelebrateallwomeninourindustry,createanatmospheretodeveloppeernetworks,andoffer sessionsonavarietyoftop-of-mindtopics.
ALLSPONSORSHIPLEVELSRECEIVETHEFOLLOWING
Your logo on all printed and digital materials including prominent signage throughout the event RecognitionintheMayeditionof"TheDish,"ourmonthlydigitalmagazine,andoursocialmedia channels
ADVOCATE|$250
UNLIMITEDAVAILABLE
Sponsor one employee or student of the industrytoattendtheevent
MENTOR|$500
UNLIMITEDAVAILABLE
Sponsor one employee or student of the industrytoattendtheevent
1/4 page advertisement in the event program
LEAD|$750
FIVESPONSORSHIPSAVAILABLE
1/2 page advertisement in the event program
Two complementary event tickets - to be used by your company or by a current employeeorstudentoftheindustry
INSPIRE|$1,000
TWOSPONSORSHIPSAVAILABLE
1/2 page advertisement in the event program
Three complementary event tickets - to be used by your company or by a current employeeorstudentoftheindustry
PLEASE CONTACT AMIE PARISEAU AT APARISEAU@NHLRA.COM OR (603) 2289585WITHQUESTIONSORTOPARTICIPATE.
ACHIEVE|$1,500
THREESPONSORSHIPSAVAILABLE
Full-page advertisement in the event program
Five complementary event tickets - to be used by your company or by a current employeeorstudentoftheindustry
NETWORK|$2,000
THREESPONSORSHIPSAVAILABLE
Full-page advertisement in the event program
Sevencomplementaryeventtickets-tobe used by your company or by a current employeeorstudentoftheindustry
EMPOWER|$2,500
TWOSPONSORSHIPSAVAILABLE
Full-page advertisement in the event program
Ten complementary event tickets - to be used by your company or by a current employeeorstudentoftheindustry
MOTIVATE|$5,000
TWOSPONSORSHIPSAVAILABLE
15minuteSpeakerSpotlight
Full-page advertisement in the event program
Ten complementary event tickets - to be used by your company or by a current employeeorstudentoftheindustry
www.nhlra.com â 11 W O M E N I N H O S P I T A L I T Y & T O U R I S M
New Hampshire ProStart State Invitational Recap
By Amie Pariseau
Our annual New Hampshire ProStart State Invitational was held on March 7 at the Grappone Conference Center in Concord. Our state winners will compete at the New England ProStart Regionals on April 1 in Boston, MA and at the National ProStart InvitationalonMay2-4inWashington,D.C.
This year was our biggest competition to date! The following schools competed: ConcordRegionalTechnicalCenter(culinaryandmanagement),MilfordHighSchool& Applied Technology Center (culinary and management), Mount Washington Valley Career Technical Center (culinary and management), Pinkerton Academy (culinary and management), Plymouth Regional High School (culinary), Richard W. Creteau Regional Technology Center (culinary), Seacoast School of Technology (culinary), and WhiteMountainsRegionalHighSchool(culinaryandmanagement).
CulinaryResults
After placing second in 2022, White Mountains Regional High School was eager to regain the top spot and was a formidable team. Not only were they the first place team, they also won the Gold Star Award for Safety & Sanitation. Their menu of Classic Spaghetti alla âCabonaraâ (handmade pasta, crispy guanciale, pecorino Romano, egg yolk parsley, and black pepper), Braised Cornish Hen âCacciatoreâ (san marzano tomato ragout, castelvetrano olives, rosemary polenta, crimini mushrooms, batonnet sweet peppers, and chiffonade of Swiss chard), Citrus Scented White Chocolate Panna Cotta (limoncello caramel sauce, white chocolate âtruffle,â pine nut crunch, and supremestangerine)wasverywellexecutedfromstarttofinish.
The second placed team, Richard W. Creteau Regional Technology Center, created a well-rounded menu with a Lamb Slider (seasoned lamb patty on a sautĂŠed sweet potato round, topped with tzatziki sauce and dressed with onions, pea shoots, cherry tomato, and a spinach leaf), Maple Pecan Pork Medallion (maple pecan glazed pork medallion served over mashed sweet potatoes with zesty lemon asparagus), and Strawberry Mouse (toasted graham cracker wafer, topped with light whipped cream, andafreshstrawberrycompote).
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The third place team from Concord Regional Technical Center brought back some familiar faces from 2022. Their menu featured maple front and center with Crab on a Boat (crab cakes served on endive boat with Cajun remoulade and maple bacon sprout salad), Maple Crusted Lamb Chops (served with parsley garlic potato gnocchi, sautĂŠed asparagus and Cipollini onion, creamy sherry wine reduction sauce, topped with crispy bacon) and Maple Ginger Cheesecake Bombs (chocolate shell filled with cheesecake and plums with a white chocolate crispy base served with orange caviar, salted candied walnuts, ginger sugar glass, whipped cream and spice plum reduction sauce).
GoldStarAwardswerealsowonbyPlymouthRegionalHighSchoolforCommunication and Seacoast School of Technology, who was competing for the first time, for Knife Skills.
ManagementResults
White Mountains Regional High School wrapped up the top spot and the Gold Star Award for Creativity with âThe Notch.â The Notch is a casual, cozy, hometown feeling, freestanding establishment located on Main Street of ProStartville, USA. The Notch is very focused on helping the community They have a Read Across America promotion andpromotedonatingabookwithaguestâsvisitandtheguestreceivesadiscounton their meal. All the books are then donated to ProStartvilleâs local childhood centers, schools,andlibraries.
The second place team and winner of the Gold Star for Creativity, Pinkerton Academy, designed Pupâs Cups, which serves fresh, healthy meals that are priced to encourage people to eat healthier. They support local farmers in the area for fresh produce and fresh meats. In a nod to their name, Pupâs Cups works with local adoption agencies to bring awareness to the adoptable animals. Every day of the week, their restaurant has animals from the local adoption centers as well as a representative from the center to answer any questions and watch the animals. Along with providing a place for people to love and dote on animals, they donate a portion of the day's sales back to the adoptioncenterthatcameinfortheday.
Milford High School & Applied Technology Center came in third place with an Italian food truck. âWhy have a restaurant in a building when we could have it on wheels?!â Based on the dishes they grew up eating, their focus became a make your own pasta bar Theduoofladieshopedtobeanincubatorforotheryoungculinariansandtogive back to the community of Prostartville. Their food truck will travel to Share (food pantries)ornursinghomestoprovidefreeordiscountedmealsforthedisadvantaged.
ConcordRegionalTechnicalCenterâsKin,wasawardedthePresentationSkillsGoldStar Award.
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Every single team in both Culinary and Management brought an exceptional level of creativityandtalent.WeâresoproudofNewHampshireProStartstudents!
We canât wrap up the New Hampshire ProStart Invitational without thanking the following:
Our sponsors- 110 Grill, CafĂŠ Services, Dexter Knives, Duprey Hospitality, Gordon Food Service, High Liner Foods, Performance Foodservice- NorthCenter, Sysco, The Common ManFamily,TheFlatbreadCompany,andUSFoods.
Our culinary judges: Will Beriau, Charlie Binda, Mike Beers (BAM Hospitality), Patrick Britten (Sysco NNE), Brian Coffey (Brian Coffey Catering), Doug Gibson (White Mountain Cupcakery), Zac Marshall (UNH), David Turin (Davidâs Restaurants), Gary Sheldon (chef mentor and lead judge), Lisa Somerville (Vintage Bakery), Todd Sweet (UNH), and Nathan Varney (The Labrie Group), and our timers and volunteers: Garrik Berry (ProStart Alumni and Littleton Freehouse Taproom & Eatery), Scott Bicknell (Performance Foodservice- NorthCenter), Peter Dickinson (The Common Man Family), CJ Hakim (ProStart Alumni and LaBelle Winery), John Knorr (ApprenticeshipNH), Laura Leslie (The Centennial Inn), Matthew Pierce (CafĂŠ Services), Tom Weir (Heron Point Seafood),andClayWestbrook(TheFlatbreadCompany)
Our management judges: Christine Breault (110 Grill), John Dunn (Michael Timothyâs Dining Group), Willow Furey-Calder (Hartâs Turkey Farm Restaurants), Kelsey Hayes (Three Chimneys Inn), Keven Halopoff (Jimmyâs Jazz & Blues Club), Bernie Lontine (110 Grill),RickSpalding(HeronPointSeafood),VinnieSpiotti(AppalachianMountainClub), Sydney Sturdevant (Archer Development), William Walsh (Lakes Region Community College),SimWilley(HartâsTurkeyFarmRestaurant),andJessicaWilson(Appalachian MountainClub),andtimersCraigGrabowski(GordonFoodService)andRobMcCarthy (MelanGroup).
Mark your calendar on Tuesday, March 5 for the 2024 New Hampshire ProStart State Invitational.
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Thank you ProStart Sponsors!
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RegisterHere www.nhlra.com â 16
Braised Short Ribs
By Hermit Woods Winery and Eatery
Ingredients:
1cantomatopaste
½bottleofRedScare½ofLakehouseRed
1package(4Ib.)ofshortribs
3stalksofcelery
3carrots
4garliccloves
2onions
3tablespoonsSalt
2tablespoonsPepper
4sprigsofrosemary
1/2cupWorcestershire
Directions:
Combinetomatopaste,wine,salt,pepper,Worcestershireinabowltocreatethe braisingliquid
Placecarrots,celeryandonion,garlicandrosemaryonbottomofbraisingpan
Trimoffexcessfatcapofshortribs
Cutshortribinto8likesizepieces
Searoffshortribsinpanuntilbrownedonallsides
Placeshortribsontopofvegetablesinbraisingpan
Putbraisingliquidinpan
Coverwithtinfoil
Cookfor4-5hourson350
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RegisterHere
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Good Start Packaging Donates Profits to The Water Project
By Melissa Breslin
164 million children in sub-Saharan Africa have nodrinkingwaterserviceattheirschools,and215 million children attend schools without basic sanitation.
In honor of World Water Day on March 22nd, NHLRAishighlightingoneofournewestmembers, Good Start Packaging, who is working to change this.
Located in Bedford, NH, Good Start Packaging offers compostable takeout food containers madefromrenewableplant-basedmaterialslike corn, wheat fiber, and sugarcane. Committed to being a force for good in the world, Good Start donates 20% of profits annually towards feeding communities, advancing human rights, and protectingtheplanet.
One of their key partners is The Water Project. This global non-profit helps bring clean water to communities by providing training, expertise, and financial support for water project construction. Good Start Packagingâs recent donation supportstheKasioniCommunityinKenyaintheconstructionoftheirnewhanddugwelladjacenttoanewsanddamontheriverbed.
Thesanddamwillbuildupsandtoraisethewatertableandnaturallyfilterwater, while the well will provide a safer method of drawing drinking water for the community. It could take up to three years of rain for this sand dam to reach maximum capacity because sometimes it only rains once a year! As the sand dammaturesandstoresmoresand,thesurroundinglandscapewillbecomelush andfertile.
Learnmoreaboutthisimportantworkandconsidergivingatthewaterproject.org.
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2023 Report: Operators & Guests Crave Restaurant Technology
By Garrett Calcaterra
AsthePresentingSponsorofthe2023StateoftheRestaurantIndustryreportfrom theNationalRestaurantAssociation,SpotOnisproudtohelprestaurantoperators findtherightsolutionstonavigatethehospitalityindustryâschanginglandscape. Thereâs a lot of data and insights to unpack in the new report (you can find our fullpressreleasehere),butonerecurringtrendstandsout movingforward,both restaurant operators and consumers agree that restaurant technology plays a keyroleincreatingaseamlessdiningexperience.
If thereâs been one saving grace for restaurants during this inflationary cycle, itâs that consumers have continued to support restaurants Last year, SpotOn reported that restaurant customers tipped 9% more over the first half of 2022 compared to the prior six months. According to the 2023 State of the Restaurant Industryreport,thetrendisholdingstrong.
Not only do consumers want to continue supporting their local restaurants, but manyexpecttechnologytoenhancetheirrestaurantexperience.
64%ofconsumerssayrestaurantsareanessentialpartoftheirlifestyle
55%wouldprefertoorderdirectlyfromarestaurantfordelivery
70%arelikelytoorder&payusingarestaurantwebsite,contactless,ormobile payment
67% would rather spend money on an experience over purchasing an item fromastore
69%likehavingtheoptiontositoutsideonapatio,deck,orsidewalk
These findings suggest some clear opportunities for your restaurant to boost efficiencyandincreaserevenuebyleveragingtechnology.
First-party online ordering enables guests to order directly from your restaurant, eliminating costly third-party app delivery commissions and helping your back-of-house operate more smoothly with direct POS integration
Readthefullarticlehere.
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USDOL Fact Sheets on Tipped Employees and Typical Problems Employers Run Into
From the United States Department of Labor
Whencananemployerclaimatipcredittowarditsminimumwageobligation?
An employer can take a tip credit towards its minimum wage obligation only whenanemployeeisengagedinatippedoccupationbyperformingworkthatis partoftheirtippedoccupation.
Anemployeeperformsworkthatispartoftheirtippedoccupationwheneither:
Theemployeeperformsworkthatistip-producing. Tip-producingworkisany workperformedbyatippedemployeethatprovidesservicetocustomersfor whichthetippedemployeereceivestips,or
The employee performs work that directly supports the tip-producing work, if it is done only for a limited time. This directly supporting work is work performed by a tipped employee in preparation of or to otherwise assist tipproducingcustomerservicework.
TipProducingWork
Examples of tip-producing work include, but are not limited to, a server waiting tables; a bartender making and serving drinks and talking to customers, and a nail technician performing manicures. In each of these cases, the service is providedtothecustomerwhoisthesourceofthetip.
WorkDirectlySupportingTipProducingWork
Examplesofaserverâsdirectlysupportingwork,arewhentheworkisperformedin preparation for or to otherwise assist tip-producing customer service work, and when it does not provide service to customers. This work includes, but is not limited to, dining room prep work, such as refilling salt and pepper shakers and ketchupbottles,rollingsilverware,foldingnapkins,andsettingtables.
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Thetipcreditmaybeclaimedforalimitedamountofdirectlysupportingwork.
Anemployermayclaimatipcredittowarditsminimumwageobligationforany time a tipped employee spends performing tip-producing work. An employer may also take a tip credit for the time a tipped employee spends performing work that directly supports tip-producing work, provided the employee does not performdirectlysupportingworkforasubstantialamountoftime.
Atippedemployeeperformsdirectlysupportingworkforasubstantialamount oftimeif:
The tipped employee performs directly supporting work for more than 20 percent of the hours in a workweek for which the employer has taken a tip credit. An employer may not take a tip credit for any time spent in directly supportingworkthatexceedsthis20percenttolerance,or
The tipped employee performs directly supporting work for a continuous periodoftimethatexceeds30minutes. Whenanemployeeperformsdirectly supporting work, the employer may not take a tip credit for any of the time thatexceeds30minutes
Click to read USDOL Fact Sheet #15A: Tipped Employees under the Fair Labor StandardsAct(FLSA)andDualJobs.
TypicalProblems
MinimumWageProblems:
An employee does not receive sufficient tips to make up the difference between the direct (or cash) wage payment (which must be at least $213 per hour) and the minimum wage in each workweek. The employer must make up the differenceattheregularpaydayfortheperiodinwhichtheworkweekends.
An employee receives only tips and is paid no direct (or cash) wage. The employer must comply with the requirements for taking a tip credit and pay a direct(cash)wageofatleast$2.13anhourormustpayadirect(orcash)wage equaltothefullminimumwage,whichiscurrently$725anhour Deductions for walkouts, breakage, or cash register shortages reduce the employeeâswagesbelowtheminimumwage. Suchdeductionsareillegalwhere an employer claims an FLSA 3(m)(2)(A) tip credit because any such deduction wouldreducethetippedemployeeâswagesbelowtheminimumwage.
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OvertimeProblems:
An employer that takes a tip credit by paying a direct (or cash) wage less than theminimumwageerroneouslycalculatestheovertimepremiumusingonlythe reduced direct (or cash) wage paid. When an employer takes a tip credit, overtimemustbecalculatedbasedonthefullminimumwage,whichiscurrently $7.25anhour,notthelowerdirect(orcash)wagepayment. The employer may not take a larger FLSA 3(m)(2)(A) tip credit for an overtime hour than for a straight time hour. Under certain circumstances, an employer may be able to claimanadditionalovertimetipcreditagainstitsovertimeobligations.
An employer does not include all service charges, commissions, bonuses, and otherremunerationintheregularrateforpurposesofcomputingovertimepay.
TipPoolingProblems:
A tipped employee receives less than the federal minimum wage (currently $7.25) per hour as a direct (or cash) wage and is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, suchascookordishwasher Whentheemployertakesatipcredit,theemployer can require the employee to share tips only with those employees who customarilyandregularlyreceivetips,suchasaserverorbartender. Anemployeeisrequiredtosharetipswithamanagerorsupervisor,regardlessof whether the employer takes a tip credit for the tipped employee. An employer who violates the FLSA by requiring tipped employees to share their tips with a manager or supervisor may be required to return the tips to the employee and paythefullminimumwage.
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Click to read USDOL Fact Sheet #15: Tipped Employees Under the Fair Labor StandardsAct(FLSA).
USSC Says Even High Wage Earners Are Entitled to Overtime if Paid on a Daily Rate Basis
By Christopher T. Vrountas, Esquire and Allison C. Ayer, Esquire, Vrountas, Ayer & Chandler, P.C.
On February 22, 2023, in a 6-3 decision, the United States Supreme Court held that in order to be exempt from overtime under the Fair Labor Standards Act (FLSA), an employeemustbepaidonasalariedbasis,nomattertheincomeleveloftheemployee. In essence the Court ruled that even highly paid employees, whose annual income exceeds$100,000ormore,areentitledtoovertimepayifthey are paid at a daily rate or on any basis other than salaried In other words, even employees who earn six-figures must be paid one and a half times their regular rate of payforhoursworkedover40,iftheyarenotpaidapre-determinedamount,onaweekly orlessfrequentbasis,withoutregardtothenumberofdaysorhoursworked
As background, the FLSA generally requires employers to pay employees a premium overtime rate (i.e., 1.5 times regular rate of pay) for all hours over 40 worked in a week. The FLSA exempts from this requirement bona fide executive, administrative, and professionalemployees.Inordertoqualifyfortheseexemptions,theemployeemustpe paid at a certain level (currently $455/week), their job position must involve certain specific duties set out in FLSA regulations, and they must be paid on a âsalary basis,â explained as receiving each pay period on a weekly, or less frequent basis, a predetermined amount not subject to reduction because of variations in the quality or quantityoftheworkperformed. ThisfinalrequirementwasatissueinHelixEnergySolutionsGroup,Inc.v.Hewitt.
Hereâswhathappened:
MichaelHewittworkedforHelixEnergySolutionsGrouponanoffshoreoilrig Hereported tothecaptainoftherig,oversawaspectsoftherigâsoperationsandsupervised12to14 workers.Heworked28-daysatatime,followedby28daysoff.Duringthe28-daystretch ofwork,hetypically,butnotinvariably,worked84hoursperweek(12hoursaday,7days a week). The employer paid Hewitt every two weeks, and paid him an amount equal to hisdailyratetimesthenumberofdayshehadworkedinthepayperiod.IfHewittworked onlyonedayduringthe2weekperiod,his
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paycheck would total $963. But if he worked all 14 days, his paycheck would come to $13,482.Usingthismethodofcompensation,theemployerendeduppayingHewittover $200,000 annually. Importantly, the employer did not pay this employee overtime compensationforhoursworkedover40.IttookthepositionthatHewittwasexemptfrom the FLSAâs overtime requirements because he qualified as a bona fide executive Hewitt sued his employer arguing that he did not meet the exemption requirements and was entitled to overtime compensation He conceded that his employment met both the salary-levelanddutiestestofthebonafideexecutiveexemption Buthearguedthathis job position did not meet the requirement that he also be paid on a salaried basis The SupremeCourtagreed.
LookingtothelanguageoftherelevantFLSAregulation,theCourtsaidthatanâemployee is paid on a salary basis if but only if he âreceive[s] the full salary for any week in which [he] performs any work without regard to the number of days or hours worked.ââ As the Court explained, this means that â[w]henever an employee works at all in a week, he must get his âfull salary for [that] weekââ referred to in the FLSA as a âpredetermined amount.âThatamount,accordingtotheCourt,mustbeâwithoutregardtothenumberof days or hours workedâ or in other words is ânot subject to reduction becauseâ the employee worked less than the full week.â Under this definition, the salary-basis requirementforovertimeexemptionscouldnotbemetforanemployeelikeHewittpaid onadaily-ratebasisâwhobydefinitionispaidforeachdayheworksandnoothersâAs the Court noted, â[a] daily-rate workerâs weekly pay is always a function of how many dayshehaslabored Itcanbecalculatedonlybycountingthosedaysoncetheweekis over not,as[thelaw]requires[tobeexemptfromovertime],byignoring that number and paying a predetermined amountâ Finding that the salary-basis applied equally to the separate âhighly compensated employeeâ, the Court found that eventheseemployees,whohadamorerelaxeddutiesstandardtobeexempt,hadtobe paidonsalarybasis,notatadailyrate.
For its part, the employer argued that the salary-basis requirement was met so long as the employee receives in each pay period on a weekly or less frequent basis a preset and non-reducible sum. In other words, the salaried-basis requirement mandates only thattheemployeegethispaychecknomoreoftenthanonceaweek.Itstheorywasthat because Hewittâs paycheck came every two weeks, and because that check always contained pay exceeding $455 (the salary level required to be exempt from overtime) foranyweekhehadworkedatall,theemployeewaspaidonasalariedbasis,andmet theexemptionrequirementsforovertime.
The Court outright rejected this argument It reasoned that the use of the term âsalary basisâ means âthe unit of time used to calculate pay,â not the frequency of its distribution In that way, it is the unit of time used to calculate the pay, not the employeeâsreceiptofthewages,thatmustbeaweekorlessfrequentmeasure
Continues...
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in order to meet the salary basis requirement. In that way, Hewittâs pay, calculated on a daily basis, even though paid weekly, did not meet the standard. As the Court stated âMostsimplyput,anemployeepaidonanhourlybasisispaidbythehour,anemployee paidonadailybasisispaidbytheday,andanemployeepaidonaweeklybasisispaid by the week irrespective of when or how often his employer actually doles out the moneyâ
Interestingly, the Court gave two specific ways the employer could have changed Hewittâs pay structure to come into compliance with the salary-basis requirement: 1) by adding to Hewittâs per-day rate a weekly guarantee that satisfies the âsalary-basisâ conditions,or2)byconvertingHewittâscompensationtoastraightweeklysalaryfortime hespendsontherig.Theemployerrejectedbothoptionsbecausetheywouldrequireit to pay for days Hewitt has not worked. But this requirement â to be paid even for days not worked, was the very point of the salary-basis requirement of the overtime exemption, and proved to them that the employer had violated the law. As the Court stated âHelix wishes neither to pay employees a true salary nor to pay them overtime. And the whole point of the salary-basis requirement is to take that third option off the table,eventhoughdoingsomaywellincreasecosts.â
So,whatdoesthismeanforemployersgoingforward?Basically,thetotalcompensation anemployeeearnsoverallinayear,doesnot,inandofitself,exemptanemployeefrom overtime Employees must be paid strictly on a salary basis in order for an employer to avoid overtime premium pay This means that even if the pay the employee ends up receivingfarexceedsthesalarylevelofthe overtime exemption (currently $455/week), if it is calculated on a basis more frequent than one-week, or otherwise accounts for how much the employee worked (i.e., adjusts up or down verses being paid a pre-set amount), the employee is not exempt, and is entitledtoovertimepayforallhoursworkedover
40. At pay levels this high, unpaid overtime claims could result in significant overtime pay, never mind possible multiple damages and attorneysâ fees for non-compliance.
Giventhispotentialexposure,employersshouldworkwithcounseltomakesureanyand allemployeeswhoarenotgettingpaidovertime,arebeingpaidonasalariedbasis,as defined by the Helix court. In particular, employers should pay close attention to employeespaidatadailyrate,andmakesurethattheyarepayingthemovertimeforall hoursworkedover40eachweek.Iftheyarenot,theyshouldconsiderconvertingthemto salaried-basedemployees,ASAP,orelsebereadytostartpayingovertime.
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