The hospitality industry remains a favorite target for wage/hour lawsuits. On June 16, 2011, a group of industry associations led by the National Restaurant Association filed a lawsuit of its own in the District Court for the District of Columbia, challenging the new DOL regulations effective in May expanding the notice requirements associated with taking a tip credit against tipped employees’ wages, pursuant to 29 U.S.C. § 203(m). Representatives of the organizations observed that the rule creates draconian and confusing new burdens on small business owners such as restaurateurs, likely leading to exposure to regulatory and private enforcement action, and also that the changes were implemented without a notice and comment process to afford an opportunity for business leaders and others affected to provide input.
“Hospitality industry employers have seen a disproportionate share of enforcement proceedings, in the form of both Department action and private litigation,” observes Jackson Lewis partner Paul DeCamp, former Administrator of the U.S. Department of Labor’s Wage and Hour Division. “This new lawsuit, like the similar action filed by the Mortgage Bankers Association earlier this year, sends a message to the Department about the need to follow the rules governing administrative procedure, as well as the importance to employers of being able to rely on agency rulings without worrying that they are going to be discarded each time the political winds change.”
We will apprise of further developments arising from this new litigation and other important developments in the heavily regulated hospitality industry.