Love's Wood Pit Barbecue Restaurant

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