Love's Wood Pit Barbecue Restaurant

National Labor Relations Board - Board Decisions

Feb 25, 1974

209 N.L.R.B. 220 (N.L.R.B. 1974)

220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
James A. Barr , d/b/a Love's Wood Pit Barbecue
Restaurant and Culinary Workers, Bartenders &
Hotel Service Employees, Local 535 , affiliated
with Culinary Workers, Bartenders & Hotel
Service Employees, AFL-CIO, Petitioner. Case
21-RC-13260
February 25, 1974
DECISION ON REVIEW AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND JENKINS
On July 19, 1973, the Regional Director for Region
21 issued his Decision and Direction of Election in
the above-entitled proceeding, finding that the
Employer's restaurant operation met the jurisdiction-
al standard for retail enterprises. The Regional
Director included as part of the Employer's projected
gross income a "meal credit" deducted from each
employee's pay. Thereafter, pursuant to the National
Labor Relations Board Rules and Regulations, the
Employer filed a timely request for review in which it
contended, inter alia, that the Regional Director
erred in treating the meal credit as income.
By telegraphic order dated August 10, 1973, the
National Labor Relations Board granted the request
for review, stayed the election pending consideration
of the case, and remanded the case to the Regional
Director for consideration of alternative grounds for
asserting jurisdiction and for other appropriate
action. Thereafter, on September 17, 1973, the
Regional Director issued his Supplemental Decision
and Direction of Election in which he reaffirmed his
original assertion of jurisdiction, finding that a "tip
credit," deducted from the pay of each waitress by
the Employer, was also part of the Employer's gross
volume of business. The Employer again filed a
timely request for review in which it contended that
the Regional Director's finding was erroneous and
without precedent.
By telegraphic order dated October 25, 1973, the
Board granted review of the Supplemental Decision
and Direction of Election, and stayed the election.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the entire record in this
case , and hereby makes the following findings:
The Employer operates a restaurant in Riverside,
California. At the time of the hearing herein, the
Employer had been in business for 10 months, and
the projected annual gross volume of business for its
' Carolina Supplies and Cement Co, 122 NLRB 80
2 The Regional Director found that the Employer does not include the
first year, including sales taxes and revenues from
vending machines, amounted to $497,250.
However, as indicated above, the Regional Direc-
tor added to that figure the amount of employees'
meal and tip credits, which he regarded as part of the
gross sales, to establish that the Employer satisfied
the $500,000 jurisdictional standard for retail enter-
prises.'
The meal credit is a deduction of 10 cents per hour
from the pay of all employees to reimburse the
Employer for the cost of providing meals to its
employees. The record indicates that the deduction
represents less than the value of the meals provided,
but is the maximum permitted under the California
minimum wage law. All employees are charged the
meal credit, and all avail themselves of the food
provided. On an annual basis, the deduction will
total about $5,250.
The tip credit is a deduction of 20 cents per hour
from the pay of each waitress. Although the parties
stipulated that the waitresses actually receive tips
averaging between two and three times this sum, 20
cents per hour is the maximum deduction permitted
under the California minimum wage law. On an
annual basis, the deduction will total roughly twice
the meal credit. The tips are not included as part of
the Employer's gross volume of sales or otherwise
treated as income and the Employer, in fact,
reimburses waitresses for tips recorded by customers
using various charge cards.
Both the meal credit and the tip credit, where
applicable, are included in the gross hourly rate in
order to satisfy the California minimum wage law,
and the gross hourly rate is used to compute
employee contributions under the Federal Insurance
Contribution Act.
In the circumstances here, we do not agree with the
Regional Director's finding that "since the Employer
in fact charges employees for meals furnished them,
it is obvious that such meals are part of its gross
sales." Arrangements between employers and em-
ployees in the restaurant business regarding employ-
ees' meals will vary extensively depending on
employer policy, area patterns, the labor market,
state or federal legislation, and other factors. An
employer may charge its employees the fair market
value of meals, a lesser sum, or nothing depending on
its particular policy. Here, the Employer's deduction
of 10 cents per hour worked for the meal credit is
limited by the state minimum wage law and,
according to the record, is unrelated to the actual
value of the meals provided to the employees.2
Given the economics involved and the limitations
imposed by applicable minimum wage laws, we are
meal credit as part of its gross sales and the Employer asserts that the
financial effect of the meal credit on its business , when compared to costs, is
209 NLRB No. 23
LOVE'S WOOD PIT BARBEQUE RESTAURANT 221
satisfied that the charge here imposed for meals
furnished employees is an integral part of a wage
package designed to lawfully compensate employees
for their services. Thus, in addition to the hourly rate,
the employees are given free meals subject to the
nominal wage deduction permitted by minimum
wage law, a deduction that does not meet the cost of
providing this fringe benefit to employees.
With respect to the tip credits, similarly, we find
that they are an integral part of the employees' wage
package, whereby the employees are permitted to
retain all tips subject to the wage deduction allowed
by the minimum wage laws. This deduction in wage
payments takes cognizance of the fact that the
Employer is providing employment for service
employees to whose take-home pay patrons custom-
arily contribute.
Accordingly, we find that the meal credit and tip
credit are not part of the Employer's projected gross
annual volume of business. In the instant case, both
credits merely reduce costs . As the Employer does
not otherwise meet the retail jurisdictional standard
and there are no other grounds for asserting
jurisdiction over the Employer, we find that it would
not effectuate the purposes of the Act to assert
jurisdiction herein , and we shall dismiss the petition.
ORDER
It is hereby ordered that the petition filed herein,
and it hereby is, dismissed.
negative rather than a source of income