Regulations

NLA: Overtime On Gratuities Is The “Issue Of Our Day”

Posted on February 23, 2012

(L to R) NLA President Diane Forgy, NLA legislative commitee member Dawson Rutter, NLA Lobbyist Louie Perry, NLA board members Richard Kane and Scott Solombrino, NLA lobbyist Greg McDonald, NLA legislative commitee members Rich Azzolino and Michael Renehan.
(L to R) NLA President Diane Forgy, NLA legislative commitee member Dawson Rutter, NLA Lobbyist Louie Perry, NLA board members Richard Kane and Scott Solombrino, NLA lobbyist Greg McDonald, NLA legislative commitee members Rich Azzolino and Michael Renehan.

LAS VEGAS — Opposing overtime pay on chauffeur gratuities is one of the leading issues confronting the National Limousine Association as it held its annual General Meeting and Legislative Summit at last week’s 2012 International LCT Show in Las Vegas.

The focus this year was on the battle against paying overtime on gratuities. Scott Solombrino, an NLA board director who serves as NLA Legislative Committee Co-Chair, called overtime on gratuities “the issue of our day.” Unlike the issue on IRS compliance for I/O-model companies, the issue of overtime on gratuities affects every single operator in the industry. “We’re not going to stop until we win this because we have no other choice,” Solombrino said.

NLA lobbyist and one of the founders of Cornerstone Government Affairs, Louie Perry, addressed the ballroom of NLA operator members and explained that the NLA’s action item on the issue is to change the Department of Labor’s opinion on pre-arranged gratuities.

“The DOL considers it a wage because they think it’s an imposed gratuity since it’s pre-arranged, even though we all know it’s voluntary,” Perry said. “It all started with the restaurant industry and the imposed gratuity on a party of eight or more people. The DOL thinks it’s like that because they don’t really understand the nature of it. But we’ve worked with key committees and conducted agency meetings to try and better explain the situation. We’ve made some progress and hopefully can get them to properly understand the concept of pre-arranged gratuities. The country club industry, which also uses pre-arranged gratuities on members’ club cards, uses exemptions in the code to avoid paying overtime on tips, and the NLA will also use those exemptions to fight this issue.”

NLA lobbyist Louie Perry discusses the industry's current regulatory issues and the efforts taken by the NLA to fight them on behalf of all operators.
NLA lobbyist Louie Perry discusses the industry's current regulatory issues and the efforts taken by the NLA to fight them on behalf of all operators.

Another threat to the industry is the increase in lawsuits filed by former employees against companies who use the I/O model. Law firms have seen that the industry is an easy target because not all operators are diligent about keeping records and files in proper order.

Other highlights include the NLA’s commitment to the RIDE Act to stop abusive fees being charged by airports. There are two bipartisan bills in the House & Senate: H.R. 1691 and S. 1922, respectively. The NLA has successfully helped operators in Phoenix get Sky Harbor International Airport’s proposed increase in fees indefinitely suspended.

The NLA also reported its finances for 2011:

Total assets as of 12-31-2011: $1,357,748.
2011 expenses: $968,800
2011 income: $975,851

For more information on the issues affecting the industry, please contact Cornerstone Government Affairs on its website or at (202) 448-9500.

— Michael Campos, LCT assistant editor

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