MN Restaurateurs: Proposed DOL Tip Credit Rule Won’t Impact Unique MN Tip-Pooling Laws

Nilan Johnson Lewis PA

On October 7, 2019, the U.S. Department of Labor announced a proposed rule that would allow employers who do not take a tip credit to establish a tip pool to be shared between (1) workers who receive tips and are paid the full minimum wage and (2) employees who do not traditionally receive tips, such as dishwashers and cooks. While this is an important change to federal wage-and-hour laws, the critical point for Minnesota restaurateurs is that this proposed rule, if enacted, does not affect Minnesota’s unique tip-pooling laws and regulations. Minnesota restaurateurs should continue to comply with local laws that prohibit the use of tip credits, strictly limit how employers can administer tip pools, govern which employees may be required to participate in a tip pool, and determine how tips may be dispersed among members of the pool. “National franchises with operations in Minnesota should not just follow federal law on this complicated issue,” says Joel O’Malley. “In fact, restaurateurs should consider auditing their policies and practices, in consultation with legal counsel, to ensure compliance with Minnesota’s unique laws.”


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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