Compensation & Benefits Library™ gives you accurate answers and practical guidance to help you design, analyze, compare, administer, and communicate compensation and benefits...
March 7 — Delivery drivers for a company that operates restaurants in the Chicago area are entitled to unpaid wages because they were misclassified as independent contractors, a federal judge in Illinois ruled March 4.
The drivers' pay was below minimum wage because the restaurants didn't satisfy the rules for taking tip credits, Judge Sharon Johnson Coleman said. A tip credit allows an employer to pay a subminimum wage if the employees' tips make up the difference. The businesses didn't qualify because they retained a portion of the drivers' tips to pay sales tax obligations, said Coleman of the U.S. District Court for the Northern District of Illinois.
It's “a matter of economic reality” that the drivers are employees under the Fair Labor Standards Act and a state wage and hour law, Coleman said. Weighing six factors enumerated by the U.S. Court of Appeals for the Seventh Circuit in , 835 F.2d 1529, 28 WH Cases 654 (7th Cir. 1987), showed they were “dependent upon” the restaurants, she said.
For example, the restaurants exercised a high degree of control over how their drivers performed their jobs, Coleman said. Prescribing shift schedules, delivery fees and drivers' routes went beyond other delivery services that simply dictate that food be delivered but leave “details of manner and means entirely within the control of the drivers,” she said.
For more information, see Compensation and Benefits Library’s Fair Labor Standards Act: General Principles chapter.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)