I am sometimes asked what lawyers really do for a living? My answer—to hope for the best, plan for the worst. The worst was definitely not planned for in a recent case from Harris County.

Hospitality employers take note: The Department of Labor’s (DOL) tip rule has been struck down. The tip credit is a provision of the Fair Labor Standards Act (FLSA) that allows employers to pay tipped employees a lower direct wage as long as their tips make up the difference to reach the minimum wage. However, the tip credit has been a source of confusion and litigation for many hospitality employers, which have faced conflicting and changing rules from the DOL on how to apply it.

Several states, including Connecticut and New York, have passed laws that require employers to be transparent to applicants and potential applicants when advertising for a job opening. And many other states—including Massachusetts—have pay transparency legislation pending.

In 2018, the U.S. Department of Labor (DOL) filed a complaint against Medical Staffing of America, LLC, and Lisa Ann Pitts (individually and as the owner and officer of Steadfast) asserting violations of the Fair Labor Standards Act (FLSA) for failure to pay overtime wages, improper classification of workers, and failure to maintain adequate and accurate employment records. In 2022, the U.S. District Court for the Eastern District of Virginia agreed with the DOL and concluded Steadfast and Pitts violated the FLSA and owed back pay and liquidated damages. Steadfast and Pitts appealed the determination to the 4th Circuit earlier this year. With over $9 million dollars at stake, all parties await the appeals court’s decision.

Question:    Are there any laws regulating whether managers and supervisors are allowed to know the compensation of the employees they supervise?

The Fair Labor Standards Act (FLSA) was passed in 1938. For the past 86 years, employers have tried to circumvent its requirements, and for the past 86 years, they’ve failed. A very recent attempt was here in Texas.

The 2023 and 2024 legislative landscape witnessed a surge in states and cities implementing diverse pay transparency requirements. Despite the progress in recent years in reducing the wage gap, gender pay disparities persist, with current studies indicating that women—particularly women of color—earn only 84 cents for every dollar earned by men. Pay transparency laws aim to rectify these disparities by providing salary and other benefit information to applicants during the hiring process. This additional information is intended to equip applicants with the tools to negotiate compensation, which theoretically may reduce the gender wage gap. In response to this trend and the intent to further address the gender wage gap, several states have introduced varying levels of pay transparency regulations.