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2016 Employment and Labor Law Final Exam Answer Key

Employment Law Update

December 19, 2016

Thank you to everyone who participated in Nexsen Pruet’s 2016 Employment and Labor Law Final Exam. We hope the exam was challenging and informative. Congratulations to Carolyn Hickman-Williams and Arthur Kramer for being selected from the pool of respondents with correct answers. Carolyn and Arthur will receive a gift basket from Grey Ghost Bakery.

The 2016 Final Exam can be found here.

Now for the answers:

1) The Fair Labor Standards Act (FLSA) allows employees to take a “tip credit” with respect to tipped employees who customarily and regularly receive more than $30 in tips per month. Specifically, the law allows employers to count tips received by an employee toward the $7.25 per hour minimum wage requirement as long as the employer informs each tipped employee about the tip credit before the credit is taken and the following requirements are met:

Answer: Both answers “D” and “E” are considered correct for the reasons described below.

The FLSA’s tip credit can be a valuable tool for employers with workers who regularly receive tips; however, employers must clear several hurdles to take advantage of it. First, the credit may only be applied to employees who customarily and regularly receive more than $30 per month in tips. Second, the employer must pay each tipped employee at least $2.13 per hour separate and apart from any tips the employee received. Third, the employer must inform each tipped employee that it will be taking the tip credit allowance before the credit is taken. Fourth, the sum of the tipped employee’s tips and direct wages paid to the employee, e.g., $2.13 per hour, must equal or exceed the $7.25 minimum wage requirement; importantly, if the sum of the employee’s tips and direct wages paid by the employer do not equal $7.25 per hour, the employer must pay the employee the difference as direct wages. Fifth, the employer must allow the tipped employee to retain all tips received; the employer may not require the tipped employee to share tips with non-tipped employees such as cooks, chefs, hosts, or hostesses. Thus, the correct answer based upon the precise wording of the question and answers is “E.”

However, and as pointed out by several individuals who provided answers to the Final Exam, answer “D” is correct if answer “B” is interpreted to mean “the employer must allow the employee to retain all tips except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips.” The underlined language was not included in answer “B”; however, several individuals correctly pointed out that an employer may still take advantage of the tip credit even if the tipped employee is not allowed to retain all tips so long as a valid tip pooling arrangement exists. Interpreting answer “B” in this manner would result in answer “D” being correct. Therefore, all individuals who answered “D” or “E” were given credit for answering Question 1 correctly.

2) An employer with places of business in South Carolina or North Carolina may not prohibit an employee in those states who possesses a concealed weapons permit from carrying a concealed handgun in the workplace. 

Answer: “False” is correct. Under both South Carolina and North Carolina state law, an employer may prohibit employees from carrying concealed handguns in the workplace even if the employee has a valid permit. For additional information about this topic, be sure to attend Nexsen Pruet’s First Quarter Breakfast Briefing at one of the firm’s offices near you.

3) Company X operates year round camps for youth. Because of its business model, the company has just 10 full-time employees, but has averaged 100 part-time camp counselors – primarily college students – for 30 weeks during each of the past two calendar years. During the other 22 weeks of 2015 and 2016, only the full-time employees were on the payroll. One of them, who has been employed for several years, just learned she is pregnant and has asked if her maternity leave will be covered by the Family and Medical Leave Act (FMLA). Is Company X obligated to provide FMLA leave to the employee?

Answer: “A” is correct. The FMLA covers employers that employ 50 or more employees in 20 or more workweeks in either the current or preceding calendar year. The 20 weeks do not need to be consecutive. The 50-employee count includes all employees, not just full-time or full-time equivalents (FTEs). Temporary, part-time, and seasonal employees must be included in the employee calculation, even if the employee worked only one hour during a particular week. In fact, even if an employee did not work at all during a specific week, the individual must be included in the employee count if his or her name appeared on the payroll for that week.

4) Under the ADA Amendments Act of 2008 (ADAAA), which of the following activities is not a “major life activity”?

Answer: “C” is correct. The ADAAA significantly expanded the ADA’s definition of major life activities. The ADAAA lists the following as major life activities: caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communication, and working. Also in the “major life activities” definition are “major bodily functions,” including the following: functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.

Why is this important? Under the ADA, in order to have a “disability,” an individual must be substantially limited in performing a major life activity as compared to most people in the general population. Thus, as a threshold requirement in determining whether an individual is a “qualified individual with a disability” to whom an employer may be required to provide a reasonable accommodation, an employer must decide if the individual is substantially limited in performing a major life activity.

5) In 2015, the Equal Employment Opportunity Commission (EEOC) received 89,385 charges of discrimination. Which type of claim was most asserted by charging parties?

Answer: “E” is correct. Retaliation claims are now the most asserted claims by charging parties. In 2015, retaliation claims under all federal anti-discrimination laws – Title VII, the ADA, the Age Discrimination in Employment Act, the Equal Pay Act, and the Genetic Information Nondiscrimination Act – were asserted in 39,757 charges of discrimination. Retaliation claims were followed by discrimination or harassment claims based on race (31,027), disability (26,968), sex (26,396), and age (20,144).[1]

The numbers demonstrate that it is important for employers to have effective anti-discrimination and harassment policies in place and to handle initial claims of discrimination or harassment properly on the front end. But they also show the importance of anti-retaliation policies, front-line supervisor training, and communication between human resources and front-line supervisors following claims of discrimination and harassment.

Bonus Question

In 2015, what type of claim was asserted the least by charging parties who filed charges of discrimination with the EEOC?

Answer: “B” is correct. Claims under the Genetic Information Nondiscrimination Act numbered only 257, while claims of color discrimination or harassment numbered 2,833, and claims of equal pay discrimination numbered 973.

We hope you have enjoyed this year’s final exam. Make plans to join us in 2017 for our quarterly breakfast briefings and our labor and employment webinar series.

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