Tips

News & Analysis as of

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

What Employers Need to Know About the New State Garnishment Laws, Part I: Michigan and Georgia

The requirements and processes applicable to employers handling garnishments are primarily governed by state laws. Therefore, in addition to the federal Consumer Credit Protection Act (CCPA), multistate employers need to be...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

The Danger of Service Charges in Country Club Operations

Country clubs and other private clubs have traditionally utilized service charges on food and beverage sales to supplement their revenue. In most cases, this supplemental revenue is used to pay higher wages to all employees...more

Tips Belong To Tipped Employees, Regardless Of Whether Employer Takes Tip Credit, Says A Federal Appellate Court

The U.S. Court of Appeals for the Ninth Circuit upheld a U.S. Department of Labor (DOL) rule prohibiting employers from requiring employees to share tips with non-tipped employees, even if the employer does not take the tip...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 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

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 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

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

Food and Beverage Law Update: January 2016

Key Issues Facing Food Retailers - Compliance and Cybersecurity: Consero Group surveyed the general counsel of Fortune 1,000 companies in June 2015 and learned that 60 percent still lack the proper preparation for a...more

Chebotnikov v. LimoLink, Inc.: a Cautionary Tale Concerning the Use of Forum-Selection Clauses

At the end of last year, a federal court in Massachusetts found that a forum selection clause in an Iowa company’s standard form service-provider agreement did not apply to claims asserted under the Fair Labor Standards Act...more

New York Adopts Tipped Worker and Fast Food Worker Minimum Wage Regulations

As we reported previously, the New York State Department of Labor (“NYSDOL”) proposed a series of new regulations earlier this year. These proposals included new regulations raising the minimum wage and reducing the maximum...more

UPDATE: Employee Tip Pooling – Don’t Say We Didn’t Warn You!

We have talked with you in the past about the risks of allowing employees to pool or share tips. This is a pretty common practice in the food service industry, but there can be concerns because of the complexity of compliance...more

Minimum Wage To Increase For Many In 2016

A number of states and local jurisdictions will raise their minimum wage in 2016; here is the latest information on what to expect in the new year....more

Minimum Wage To Increase For MA Hourly and Tipped Workers

Starting January 1, 2016, the minimum wage in Massachusetts will be $10.00 per hour. Before Governor Deval Patrick left office, he signed into law an increase in the state minimum wage in three successive annual increments...more

A Legal Tipping Point – Are No-Tip Policies the Wave of the Future?

In this country, there are thousands of employees who earn their living off tips or gratuities they receive from customers. Over the last several years, there has been a movement afoot, particularly in the restaurant...more

Tip Pooling Tax Implications—What Employers Need to Know

The sharing of tips is referred to as “tip pooling,” “tip splitting,” or “tip sharing.” For purposes of this discussion, we will refer to the sharing of tips as tip pooling. Tip pooling occurs generally in two forms....more

Hospitality, Food and Beverage Industry Newsletter

We are pleased to share the first edition of our Hospitality, Food and Beverage Industry Newsletter with you. This Newsletter addresses important recent legal developments affecting the hospitality and restaurant industry and...more

Food and Beverage Law Update: October 2015

Labor and Employment - Plaintiff Wage and Hour Lawsuits Continue to Climb - Wage and hour litigation has become what some call the new "workplace revolution." Data from the Federal Judicial Center indicates that...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

Nevada’s Recent Minimum Wage Ruling and Best Practices for Employers

Nevada’s minimum wage law continues to be a minefield for employers. On August 14, 2015, in the case of Hancock v. the State of Nevada, the First Judicial District Court held two, key minimum wage regulations as...more

DOL Announces Increase in Minimum Wage Rate for Federal Contractors

The Department of Labor (DOL) has announced that the minimum wage for certain federal contracts will increase to $10.15 per hour beginning January 1, 2016. Additionally, the minimum cash wage that generally must be paid to...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

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