Tip-Pooling

News & Analysis as of

Minnesota Court Creates “Wrongful Discharge” Damages Claim for MFLSA Violations

In an unexpected surprising broadening of employee rights under the Minnesota Fair Labor Standards Act, the Minnesota Court of Appeals held, on June 27, 2016, that an employee who is discharged for refusing to obey an...more

Here’s a Tip for You, Jack – Fifth Circuit Upholds Ruling on Restaurant Credit Card Offset

Life is filled with risky decisions. Should you take that new job? Should you put in an offer on that house that is just out of your price range? Should you really eat that last piece of cake when you’ve already had two?...more

Here's a tip: Don't skim from employee tips

Hospitality industry employers take note: If you claim a “tip credit” toward the minimum wage for any of your employees, you need to make sure that all tips are properly distributed to employees. A recent case from the Fifth...more

Franchise & Distribution News, Number 2

Ontario Passes New Legislation Governing Tips and Gratuities - Ontario restaurants, bars and other businesses with employees who receive some of their pay through tips and gratuities will face new laws governing how...more

Recent Ruling Means You May Need To Revise Your Tip-Pooling Plan

In a recent decision by the federal 9th Circuit Court of Appeals, a 2011 U.S. Department of Labor (USDOL) regulation that significantly restricts the common practice of “tip pooling” among wait staff and other service...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

Employment Law This Week: Sexual Orientation Discrimination Suits, Tip Pooling, Successor Liability, Trade Secrets, Workplace... [Video]

We invite you to view Employment Law This Week - a weekly rundown of the latest news in the field, brought to you by Epstein Becker Green. We look at the latest trends, important court decisions, and new developments that...more

Ninth Circuit Validates Rules Prohibiting Inclusion of “Back of the House” Employees in Tip Pools Even for Employers Not Taking a...

Employers in the hospitality industry have been increasingly assessing and updating their tipping practices over the past several years, with some even eliminating tipping all together, affecting both their bottom lines and...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 Holds That DOL May Expand Regulation of Employers’ Tip Pooling Practices

The restaurant and gaming industry lost a battle in the Ninth Circuit over whether employers that pay their workers at least the minimum wage are subject to Department of Labor regulations restricting tip pooling...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 Ices Back-of-House Tip Pools

The Ninth Circuit Court of Appeals has upheld U.S. Department of Labor regulations invalidating tip-pooling arrangements that include kitchen staff and other employees who are not customarily tipped (often referred to as...more

Restaurateurs Rush to Review Tip-Sharing in Light of Surprising Ninth Circuit Decision

On February 23, 2016, a divided three judge panel of the Ninth Circuit Court of Appeals validated regulations by the Department of Labor (“DOL”) that significantly limit employers’ ability to maintain tip pools that extend...more

DOL May Enforce Rules Extending Tip Pooling Restrictions

Since 2010, the law has been in flux as to whether certain restaurant employees may or may not be allowed to participate in tip pools, particularly in states located in the jurisdiction of the U.S. Court of Appeals for the...more

Ninth Circuit "Tips" Against Tip-Pooling Policies

In a surprising decision that may require many restaurants and other hospitality businesses in the Western U.S. to alter their labor practices, the 9th Circuit Court of Appeals upheld a 2011 U.S. Department of Labor (USDOL)...more

February 2016: Five Biggest Labor And Employment Law Stories

The world of labor and employment law is always rapidly evolving. In order to make sure that you stay on top of the latest developments, here is a quick review of the five biggest stories from last month that all employers...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

Is Your Tip Pool Policy a Recipe for Trouble?

In a recent blog post, we highlighted the trend amongst hoteliers and restaurateurs toward adopting service charge models to meet the rise in state and local minimum wage requirements. Although “no-tip” and “service charge”...more

Are You Adopting a Service Charge Model to Help Raise Wages?

As lawmakers continue to increase the minimum wage in states and cities across the country, many hoteliers and restaurateurs are implementing service charges and tip pools in order to meet rising costs and help workers earn...more

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