Tip Credit

News & Analysis as of

“Side Work” Lawsuits Brought by Restaurant Employees on the Rise

Ruby Tuesday is the latest restaurant chain to face a “side work” class-action lawsuit brought by employees who allege that they are underpaid pursuant to federal regulations. The suit against Ruby Tuesday involves thousands...more

California Employment Law Notes - March 2016

Nuclear Plant Maintenance Manager's Whistleblower Claim Was Properly Dismissed - Sanders v. Energy Northwest, 2016 WL 560809 (9th Cir. 2016) - David W. Sanders, a maintenance manager for Energy Northwest (a...more

Ninth Circuit Reverses District Court Decisions, Reviving U.S. Department of Labor Rule Restricting Tip-Pool Distribution

On February 23, 2016, in a surprise ruling, a divided Ninth Circuit Court of Appeals (which covers the states of California, Nevada, Oregon, Washington, Arizona, Alaska, Idaho, Montana and Hawaii) ignored its prior precedent...more

Ninth Circuit: FLSA's Tip-Pooling Restrictions Apply Regardless of Whether Employers Use Tip Credits

On February 23, 2016, the U.S. Court of Appeals for the Ninth Circuit in a 2-1 panel decision upheld the U.S. Department of Labor’s (DOL) 2011 revisions to 29 C.F.R. § 531.52 applying tip-pooling restrictions to employers...more

Ninth Circuit Says DOL Tip Pooling Restrictions Apply Even if Employer Does Not Claim Tip Credit

Federal Department of Labor regulations have long prohibited employers from requiring that servers, hostesses and bartenders pool a portion of their tips to share with other restaurant employees such as bussers and cooks. For...more

Split Ninth Circuit Decision Clarifies the Limitations of Tip Pooling

In a split 2-1 decision, the Ninth Circuit Court of Appeals ruled in Oregon Restaurant and Lodging Association v. Perez (February 2016) that its 2010 decision in Cumbie v. Woody Woo, Inc. did not prevent the U. S. Department...more

Ninth Circuit Approves DOL Rule that Restricts Tip Pooling

Section 203(m) of the Fair Labor Standards Act (FLSA) allows employers of tipped employees to take a tip credit against the employer's minimum wage obligation if: (a) notice of the tip credit is provided, and (b) tipped...more

Ninth Circuit Limits Tip Pooling to Customarily Tipped Employees

In a decision with important implications for employers throughout the service industry, the federal Ninth Circuit Court of Appeals ruled on February 23 that employers cannot implement policies requiring tipped employees to...more

Ninth Circuit Rules Tip Pooling Arrangements That Share Tips With Employees Who Do Not Normally Receive Tips Violate Federal Law

In a game-changing event, on February 23, 2016, the U.S. Court of Appeals for the Ninth Circuit (the court that covers nine western states, including Washington, Oregon and California) in a 2-1 decision ruled that it is a...more

Bad News for Employers: In a Surprise, Ninth Circuit Upholds Tip Pooling Regulations

Unsurprisingly, and in direct response to the Woody Woo decision, in May 2011, DOL issued new regulations regarding tips. Under those regulations, DOL interpreted the FLSA such that tips are the property of the tipped...more

Ninth Circuit “Tips” Away from Prior Decision, Finds Pooling Rules Applicable

All around the country, tipping practices have been coming under scrutiny. Restaurants increasingly have abandoned their use of tip credit — and tipping — partially due to a belief that a higher wage not tied to the...more

The Rising Minimum Wages and Tip Credits for 2016: An Overview

Effective January 1, 2016, 29 states plus the District of Columbia will have minimum wage rates that are above the federal minimum wage rate of $7.25 per hour. The District of Columbia will have, by far, one of the highest...more

Tip-Toeing Around Class Actions: Can a “No Tipping” Policy End Wage and Hour Litigation in the Hospitality Industry?

Joining a budding national trend, renowned restaurateur Danny Meyer of Union Square Hospitality Group last week announced that he will eliminate formal tipping at his restaurants starting in 2016. Meyer stated that the new...more

City of Birmingham Raises Minimum Wage, Establishes Severe Employer Penalties in Aggressive Wage and Hour Ordinance

On August 18, 2015, the Birmingham, Alabama, City Council passed an aggressive wage and hour ordinance that raises the minimum wage to $10.10 by July 1, 2017. Presently, the minimum hourly wage in Alabama is $7.25, which is...more

Fifth Circuit Tips Its Hand as to Analysis of FLSA’s Tip Credit

Restaurants throughout the Fifth Circuit, and even beyond, should review the recent decision of Montano v. Montrose Restaurant, which discusses the often tricky and always fact-intensive question of whether a restaurant...more

Montgomery County, Maryland Joins the Jurisdictions Requiring Paid Sick Leave, Alters the Employer Tip Credit

The Montgomery County, Maryland Council recently passed two amendments to the County Code that impact employers. First, the County has joined in the recent trend of mandatory sick leave laws by requiring employers with one...more

The New Highest Minimum Wage in the Country: Emeryville Expected to Reach $16 Per Hour by 2020

As of this week’s vote, the small California city of Emeryville, which is located in San Francisco’s Bay Area, is slated to have one of the highest minimum wage rates in the country. As expected, on June 2, 2015, the...more

A Tip for Employers: Be Aware of How the Department of Labor Interprets Its Regulations

This story applies directly only to the restaurant industry, but it is a cautionary tale for every employer in Connecticut subject to the Department of Labor’s authority to write and interpret its regulations....more

Tips

Who, What, Why . . . Who does it apply to: Employers who take the “tip credit” against wages of some or all of their employees....more

U.S. DOL Suffers Set Back on Tip-Pooling Regulations

A federal district court recently invalidated regulations issued by the U.S. Department of Labor (DOL) that prohibit employees from including non-tipped employees in a tip pool in certain situations. ...more

Court Partially Dismisses and Denies Conditional Certification In Tip-Credit Case

Anyone who has dined at a restaurant is aware of the importance of tipping, even if the exact rules, like the percentage and how it should be calculated, may be a bit fuzzy at times. From the standpoint of the restaurant,...more

Florida's Minimum Wage Increased for 2013

Florida is one of only 10 states which ties its minimum wage rate to the annual rate of inflation as reflected in the federal Consumer Price Index (CPI). Thus, every year the Florida Department of Economic Opportunity must...more

Florida May Change Wage Payments For Tipped Employees

On February 16th the Commerce and Tourism Committee of the Florida Senate reported favorably on a bill that would allow Florida employers to fundamentally alter the way that tipped employees are paid. Senate Bill 2106 is...more

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