July 12, 2018

DOL to Clover: The General Manager of a Food Truck? Not a salaried role


So what’s up with this DOL press release about Clover? The quick answer is that the DOL decided after a multi-year investigation that our food truck General Managers should be paid as hourly employees and cannot be considered salaried employees. I don’t know whether they are applying this to all food truck companies in Boston or just Clover. We didn’t know this standard, and it seems sort of arbitrary to me. Read on for more detail.

We can’t afford to fight the DOL in court so after an investigation spanning more than 4 years we settled. The settlement explicitly said “Therefore, the Secretary agrees to accept and the Employers agree, without admitting or denying liability, to pay $39,669.48.” The reason the total was 79,338.96 is because the DOL has a policy of doubling everything, they call it liquidated damages. In reality we paid 83,721.90 including payroll taxes. I hadn’t talked about it in the past because I didn’t think I was allowed to. The DOL didn’t warn us that they were sending a press release to all major media outlets in Boston. The press release was misleading and inaccurate. Follow the nitty gritty details.

From day 1 at Clover I’ve wanted us to adhere to all laws and regulations. The restaurant industry is known to operate in grey ways. I don’t want Clover to be grey. We’re going to be pure white. From day 1 on.

Not allowing a manager of a food truck to be considered a salaried employee was nothing we saw coming. And honestly, I don’t think it’s right. Food truck managers did the same kind of training, had the same kind of responsibilities, built the same relationships with staff and customers as restaurant managers. I think if we went to court with the DOL we’d win. But who knows, we can’t afford to fight the case. We are still a tiny company, but we were much smaller back in 2015. I didn’t have an employment lawyer as we do now. We thought we were doing everything on the up and up, and when this thing with the DOL came up it was really disturbing and I spent an absurd amount of time (literally weeks) holed away with reports and reams of data and payroll records.

Over the investigation period the DOL investigator thought we may have missed as much as $39,669 in wages. We disagree with that amount and no fault has been found. The investigation was over a 4 year period where total Clover payroll was $17,052,779.72. Most of the $39k was determined by deciding our food truck managers should not be considered salaried employees. They took the hours worked by these employees, assumed that if they were hourly we’d be paying them an hourly pay of their weekly salary divided by 40 hours. Then applied that rate x 1.5 (overtime) to an assumed number of hours per week.

In addition to the food truck manager issues (which were the bulk) they found we made a total of $2,396.33 in overtime errors. During this investigation we also found that we OVERPAID due to overtime hours by $5,500 (of course we didn’t seek to get that back, but I found that errors work both ways). Most errors were because our Payroll person was making a mistake in some calculations. There were periods where she had used the hours worked over 2 weeks to determine overtime (instead of 1 week). We pay bi-weekly, but DOL wants overtime calculations to be weekly. We did it correctly in most cases but there were a few incidents over the period where the calculations were in error. It was an honest mistake I was unaware of until the investigation.  I wrote a letter to the DOL back in September 2015 when this first came to light saying that I wanted to cut those checks right away to fix this problem. They said no, it was now a part of their investigation. An investigation that wasn’t resolved until 2018. Happily those folks have now been paid. But I think we should have been able to fix that back in 2015. Sorry. I warned this stuff gets pretty technical. Gets worse from here.

We had a couple of situations where restaurant managers overlapped (for example, when a manager quit and the replacement came to work alongside them for a hand-off period). The DOL took the stance that because those 2 people were working at the same restaurant we shouldn’t have paid them both salary. This was a small # of dollars.

There was one situation where we had a salaried employee dealing with mental health issues who asked to have a flexible work schedule which of course we were happy to do. The DOL didn’t like that we did this. They thought we should have moved that employee to hourly pay and some small part of the claim of back wages was related to that situation. There is no way the same standard would have been applied to a salaried employee in another industry.

Finally, we had salaried employees who took days off of work when their PTO balance was exhausted. We have had a flexible policy on this. If people want to take more vacation it’s fine, you just take the days unpaid. The DOL said the deductions were improper. We believe they were done correctly, we have documentation of requests from employees for those days that I shared with the DOL but received no response.

At the end of the day the DOL wanted us to settle. We couldn’t afford to fight in court so we did. Some of the settlement I feel fantastic about (e.g., the overtime errors, wish we’d paid those properly the first time, or been allowed to fix that back in 2015). Some of the settlement I feel good about (I don’t believe we paid the truck managers improperly, and none of them expressed this either, but how can I be mad about paying any employee I love more money?).

But the DOL’s treatment of this, I’m a bit emotional about that. How can things work this way? How can we have a system where small business owners are trying to follow every law but still can’t get it right? Don’t we need to change that? It should be easy to know how to be law-abiding, right? And if something happens that was completely unintentional and you’re willing to fix it should you be punished?

And what a nasty press release. How many cases does the DOL settle each year? Does anybody know? How many in Massachusetts this year? How many of these cases have press releases? Seems like a lousy thing to me.

Recent Posts

January 26, 2023
The Pizza Friday Box gave us an idea: calzones! Ayr has been making these at his house and texting us photos. They’re big and saucy and so good. Basically a stuffed pizza/turnover situation with origins in 17th century Naples.
January 18, 2023
As you might know, we love feedback. Survey Day is a tradition that harkens back to the first days of the food truck, over 10 years ago. If you got a card in line today at Clover, or if you ordered on the app today, click here to take the survey. Huge thanks for helping us improve.
January 13, 2023
Thanks all who joined for the first public food dev meeting after Covid. Phil did a great job pulling it all together. If you’re a customer, farmer, vendor (or Clover staff member) reading this, you are invited to Food Dev! These happen Thursday afternoons at the HUB and they’re where all new food ideas are born. Just make sure to sign up – spots are limited.
January 5, 2023
House-made carrot lox, hearty vegetable stews with bread and pickles, Tunisian breakfast bowls, a pizza party kit, and a dream of snow, all in one box. Our Snowed In Box is back. This was Greg’s idea back in 2020. He thought it would be cool to make a box that was equally whether eaten after snowboarding or cozied up on the couch watching a movie.
December 21, 2022
We’ve been getting a lot of requests for the ability to gift a friend Clover Meal Boxes. After a lot of late night tech sessions, we have a way to do this! Yay! I’ve been looking and seeing a few of you have started to discover this feature and are starting to gift away. So cool to see.
December 16, 2022
If you’re a weekly meal box subscriber, you may have noticed way fewer plastic containers in your deliveries recently.When we started the program, we were in the pandemic, new to this whole home delivery thing, and a big concern was making sure that nothing spilled inside the boxes. So we relied on post-consumer recycled containers (aka plastic deli containers) for a lot of the items.
December 13, 2022
We’ve been getting back into the merch game. First up: squash shirts. I thought it would be fun to celebrate the diversity of the squash world. Although butternut is probably the squash you see most in the grocery store, there are actually over 100 types of squash, all with their own patterns, colors, and textures.
December 6, 2022
The Bridgewater is back!! This is probably the most requested sandwich on our menu. Michelle who runs our social media says she reliably gets one message per week asking when it will return. In 2015, Paul and Bryan came up with this sandwich as an homage to the jalapeño poppers at The Charlie Horse, a now-closed tavern in their hometown of Bridgewater, MA.
December 6, 2022
I love the holidays. I love the lights, I love the traditions, I love ornaments and pine needles all over the floor.  I love the movies (“Muppet Christmas Carol”) and the books (“A Child’s Christmas in Wales.”) I love the good songs, I love the schlocky songs (if you’ve never heard “Suzy Snowflake” or “Dominic the Donkey”, stop reading right now and click through.)
December 1, 2022
It was inevitable. Our meal box program had to find its way into restaurants at some point. A bunch of you have been asking if we can sell “on demand” meal boxes in our restaurants – for those times when you have last-minute dinner guests or forgot to subscribe by the deadline. So we’ve been easing into the process of combining one part of Clover with another.
November 28, 2022
Brussels Sprouts are extra sweet this time of year, and King Brussels, in his infinite wisdom, has cooked up a Brussels Week in our meal boxes. Every single subscription box will contain a recipe inspired by brussels! This is the first time we’ve explored a seasonal theme across our entire lineup and we’re excited to dive in.
November 19, 2022
This was Jane’s last week at Clover. We’re wishing her the best in her next steps (but also not so secretly hoping she comes back!)