The Law at Work: Tip-sharing pools, identity and eligibility to work, and maternity and paternity leave
by Beth O'NealCape Business is collaborating with Beth O’Neal, Esq., a partner in the Boston law firm of Masterman, Culbert & Tully LLP, for our column, The Law at Work.
We encourage you to send us your questions. O’Neal will answer them in Cape Business magazine and address your issues in a monthly newsletter being launched at our Cape Business Connect conference on Nov. 17 at a workshop she will be conducting.
Send questions to law@capebusiness.net or The Law at Work, Cape Business, 704 Main St. (Route 6A), Dennis, MA 02631.
Tip-sharing pools
I am a waitress in a family-run restaurant. The owners, who also work in the restaurant, have been talking about instituting a tip pool to encourage teamwork and promote fairness. All of the wait staff help each other with tables when we are busy, which I like, but I don’t know if I want to pool my tips because I work really hard and have several regular customers. Do I have to participate in this pool if I choose not to and can I be fired for refusing to participate?
Your questions regarding tip sharing are applicable to many types of workers including wait staff, bartenders and other types of service employees. In Massachusetts, service employees must receive a minimum hourly wage of $2.63 and a total minimum hourly wage of $6.75 (increasing to $7.50 on January 1, 2007, and $8.00 on January 1, 2008) after the wages and tips are combined. If the total minimum hourly wage is not met, the employer is required to increase the hourly wage until the total reaches $6.75. Although tip-sharing pools are permissible, there are specific regulations regarding participation and management. The only employees who are permitted to share in a tip pool are waiters, waitresses, bus people, counter staff, bartenders and employees who customarily receive tips and provide services directly to customers.
Owners, managers, and supervisors are not permitted to share in tip pools even if they earn tips. If the owners do choose to institute a pool excluding themselves, they can require you to participate. However, if you complain to the owner or to the Attorney General’s Office that they are not complying with the regulations, they may not legally retaliate against you for reporting or complaining to them. Before the owners make a decision, consider having a conversation with them, learning more and, if need be, expressing your concerns.
Identity and eligibility to work
With all the immigration issues in the news lately, I have started to worry that I am not doing the right things. I only have a couple of part-time employees that help me in my B&B – do any of the rules about hiring non-citizens apply to me?
As an employer, you are required to verify the identity of all of your employees when they are hired, even if they only work part-time. You must provide a Form I-9 to every employee on the first day of work and he or she must complete Section 1 by the close of business. You must complete Section 2 no later than close of business on the employee’s third day of work. Section 2 provides lists of acceptable documentation to establish identity and eligibility to work and instructs you to inspect the employee’s documentation. You may request only the documents provided on the lists. In addition, you must accept them unless the documentation does not reasonably appear to be genuine, and only then may you request another form of documentation included on the lists. Failure to follow the instructions carefully on the Form I-9 can expose you to liability if you request more information than you are permitted or if you fail to secure the required information and complete the form. You must maintain the documents in your files for three years after the date of hire or one year after the employee’s termination, whichever date is later. If you have a large number of employees, it may be most efficient to keep the forms separate from the personnel files because you will only receive three days advance notice of an inspection and you may be asked to provide originals.
Although you are not required to verify an employee’s social security number upon hire, it is a good practice for tax and wage payment purposes. The Social Security Administration maintains a toll free phone number (1-800-772-6270) that allows employers to verify up to five social security numbers at once. The verification process provides you with limited information in terms of letting you know if the individual’s name “matches” the social security number being used by the individual. A “mismatch” does not automatically mean that you should fire or refuse to hire the individual. It does, however, impose certain legal obligations upon you that you would need to discuss with an attorney.
Maternity and paternity leave
I have just found out that I am pregnant but I haven’t talked to my employer. I have never seen an employee manual, and I don’t know any other coworkers who have recently had a baby so have no idea what to expect at my job. Is my boss required to give me any time off?
Most people do not inquire about maternity or paternity policies when they are hired so they are unsure what leave they are entitled to until they are expecting or planning to adopt. Massachusetts employers are covered by both federal and state laws that require employers to allow workers to take time off for pregnancy, childbirth, pregnancy-related illnesses and parenting, but the requirements vary based on several factors.
The Family and Medical Leave Act, a federal law, only applies to employers with fifty or more employees. Employees are only eligible for leave after working for their employer for at least 12 months and at least 1,250 hours in the last year. The FMLA requires covered employers to provide up to 12 weeks of unpaid leave during the employee’s pregnancy and/or following the birth, adoption or foster placement of a child to permit parent and child to “bond.” Fathers and mothers are covered under the FMLA with respect to the 12-week “bonding” leave.
The Massachusetts Maternity Leave Act applies to employers with six or more employees and covers only women who have completed the initial probationary period, which consists of full-time work for at most six months and not less than three consecutive months. The MMLA provides eight weeks of unpaid leave for giving birth or adopting a child. Usually, the FMLA leave and the MMLA leave will run concurrently but in some situations a woman may be entitled to a total of 20 weeks; for example, if she uses 12 weeks of FMLA leave due to pregnancy-related illness before the birth and then uses 8 weeks of MMLA leave after the birth. Neither of these laws requires employers to pay the employee during the leave; but employees may request or be required to use paid leave, like vacation time. Employers may choose to adopt policies that offer more generous terms of leave and/or provide pay to employees.
If you and your employer are covered under one or both of these laws, your employer is not permitted to discharge you for taking leave and you will be entitled to return from your leave to your former position or a substantially similar position. You should speak with your employer about the policies in place so that you can plan ahead and provide the proper notice and paperwork.
Beth O’Neal will discuss many additional legal issues at Cape Business Connect 2006 at The Law at Work roundtable and in an afternoon workshop.
This column, which may be considered advertising under the ethical rules of certain jurisdictions, is intended as a general discussion of the topics covered, and does not constitute the rendering of legal advice or other professional advice by Masterman Culbert and Tully LLP or its attorneys. In compliance with U.S. treasury regulations governing tax practice, any U.S. federal tax advice contained in this publication is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties or in connection with the promoting, marketing or recommending to any individual of any transaction or matters addressed therein.
Originally published in the Nov/Dec 2006 issue of Cape Business
Beth O'Neal Beth O’Neal, Esq., is a partner in the Boston law firm of Masterman, Culbert & Tully LLP. 
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