Employers Should be Wary of “Guidance”

Government agencies with enforcement powers often publish “guidance” in the form of bulletins or FAQ’s (frequently asked questions) to provide assistance in compliance. However, unlike statutes and regulations, the guidance publications are not binding and do not have the force of law.  Guidance may be helpful in general, but in a particular instance may be misleading.

Two recent examples illustrate how employers could rely on well-meaning agency guidance to their detriment.  The Connecticut Commission on Human Rights and Opportunities recently issued a Guide to Nondiscrimination in Hiring and Employing Connecticut Veterans regarding the recent change to the Connecticut fair employment practices law prohibiting discrimination against veterans. (See a recent blog written by my colleague Melinda Kaufmann on this guidance.)

The Guide describes the five designations of discharge from the United States armed forces: honorable discharge, general discharge under honorable conditions, other-than-honorable discharge, bad conduct discharge, and dishonorable discharge.  The Guide then states that an amendment which took effect last October prohibits discrimination against “honorably-discharged” veterans, but does not statutorily prohibit discrimination against anyone discharged under the other four designations, which the Guide says are often grouped together and collectively referred to as “less-than-honorable.”

The purpose of the Guide was to point out that there may be other statutory protections applicable to veterans with less-than-honorable discharges, such as prohibitions against discrimination because of sexual orientation or disability. But the implication of the Guide is that for veteran status as such, an employer may legally have a policy of hiring only veterans with honorable discharges.

However, this conclusion would be incorrect and such a policy would not comply with the law.  The new amendment, Public Act 17-127, prohibits discrimination on the basis of status as a veteran, using the definition of “veteran” in Conn. Gen. Stat. §27-103  as any person honorably discharged or released under honorable conditions.  A discharge under honorable conditions is also known as a general discharge.  Thus, a legal hiring policy with respect to veterans would have to include persons with either an honorable discharge or a general discharge, although it could exclude anyone with one of the last three unfavorable forms of discharge.

A second guidance pitfall is illustrated by the recent Superior Court decision in the case of Rodriguez v. Kaiaffa, LLC dba Chips Family Restaurants.  Connecticut wage-hour law allows restaurants to count gratuities given by customers to employees in meeting minimum wage requirements, known as the “tip credit.”   A Department of Labor regulation provides that for employees who perform both customer service and non-service duties, the tip credit can be applied to hours worked in the service category, but not to non-customer service hours.  However, the DOL also published a Restaurant Industry Guide which stated that for DOL enforcement proceedings, the tip credit would be allowed for all hours as long as non-service duties were no more than 20% of total working time.

When the plaintiff  in this lawsuit claimed an underpayment of wages because of a misapplication of the tip credit, the defendant restaurant offered as a defense that it complied with the 20%  guideline.  However, the Court rejected this defense.  Noting that the Guide itself stated that it was intended to provide an informational service to the employment community but that it did not have the force of law,  the Court ruled that since the regulation explicitly prohibited use of the tip credit for any non-service hour worked, the Court could not apply the 20% policy, regardless of the Department of Labor’s policy in enforcement.

The take-away from these examples, needless to say, is that the best guidance on employment law compliance will come from your employment law counsel.