While deciding to make effective some portions of the Tipped Regulations Final Rule published in the final weeks of the former administration, the U.S. Department of Labor (DOL) has proposed further delay and consideration of the most controversial provisions of the Rule, including the elimination of the “80/20 Rule” that purports to limit the percentage … Continue Reading
As expected, the U.S. Department of Labor (DOL) has formally delayed the effective date of the Tip Regulations Final Rule, from March 1, 2021 to April 30, 2021. The Tip Regulations Final Rule, issued in late December 2020, implemented a 2018 amendment to the FLSA that permits tipped employees, such as restaurant servers, to pool … Continue Reading
Making good on President Biden’s campaign promise, the House of Representatives has included in its $1.9 trillion Covid-19 relief bill, known as the “American Rescue Plan Act of 2021,” revisions to the Fair Labor Standards Act (FLSA) that would increase the federal minimum wage to $15 per hour by 2025. The current federal minimum wage … Continue Reading
One day after President Biden entered office, the White House issued a memorandum directing all agencies to review, and consider delaying, any rules that had been issued by the former administration but that were not yet effective. Following that directive, the U.S. Department of Labor (DOL) has proposed delaying the effective dates of the recently-issued … Continue Reading
On January 19, 2021, eight states (Delaware, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, and Pennsylvania), along with the District of Columbia, filed a lawsuit seeking to enjoin the Tip Regulations Final Rule published by the U.S. Department of Labor (DOL) in late December 2020. The Final Rule, which currently is scheduled to become … Continue Reading
Agreeing with the district court, the Court of Appeals for the Fourth Circuit has concluded that the mandatory service charges imposed by a restaurant on dining parties of six or more were not “tips” under the FLSA. However, the Court of Appeals reversed and remanded the trial court’s determination that the FLSA’s “commissioned salesperson” overtime … Continue Reading
Last November, the United States Department of Labor (USDOL) issued Opinion Letter FLSA2018-27, rescinding the so-called “80/20” Tip Credit Rule, a provision that during the last decade had spawned a cottage industry of “80/20” cases. These cases sought to dissect the duties of a server between those that allegedly generated tips and those that did … Continue Reading
The Department of Labor (“DOL”) today rescinded its prior guidance that made the tip credit unavailable for tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties. The 20% limitation, contained in an internal DOL Field Operations Handbook, spawned numerous so-called “80/20” lawsuits, claiming servers spent too much time performing allegedly non-tipped … Continue Reading
The Restaurant Law Center, a public policy affiliate of the National Restaurant Association, has filed suit against the Department of Labor and its Wage and Hour Division, seeking to declare unlawful the DOL’s 2012 revision to its Field Operations Handbook, purporting to establish, through sub-regulatory guidance, the “80/20” tip credit rule or “20% Rule.” Restaurant … Continue Reading
This week the Department of Labor issued new guidance, in a “Field Assistance Bulletin,” on the recent amendment to the FLSA regarding tip sharing. The recent amendment to the FLSA (which was included in the omnibus budget bill) bars “supervisors or managers” from retaining tips but expressly allows tipped workers to share tips with non-tipped … Continue Reading
Employers in New York currently are permitted to pay tipped workers a direct cash wage that is below the State minimum wage and take a “credit” for some of the tips received by employees to satisfy the difference between the cash wage paid and the full minimum wage. For example, in New York City beginning … Continue Reading
In recent years, one significant issue that has plagued industries employing tipped employees is whether the employers must ensure that tipped employees retain all of their tips even if the company is not using the employee’s tips to satisfy part of the minimum wage pursuant to the FLSA’s “tip credit” provision, 29 U.S.C. § 203(m). … Continue Reading
Today the Trump Administration, through the Office of Management and Budget’s Office of Information and Regulatory Affairs, released the federal government’s semi-annual Unified Agenda of Regulatory and Deregulatory Actions. This agenda provides public notice of the regulatory actions the various agencies of the Executive Branch anticipate taking in the coming year. Among the items listed … Continue Reading
While Department of Labor regulations interpreting the FLSA remain the primary source of employer guidance regarding the Act’s requirements, they are not necessarily the final word on what federal wage law requires. This is so even where they have been subject to “notice and comment,” triggering a higher level of judicial deference. A federal court … Continue Reading
The U.S. Department of Labor has issued a new FLSA poster, available for download here. Covered employers should replace old posters with the Department’s new versions. Employers should periodically review their compliance with FLSA and state law posting and notice requirements, particularly as related to tipped workers.… Continue Reading
On July 26, 2016, Judge William S. Duffey of the United States District Court for the Northern District of Georgia issued a decision holding that an employer does not have to ensure tipped employees retain all of their tips if the company is not using the employee’s tips to satisfy part of the minimum wage … Continue Reading
The New York State Department of Labor (NYSDOL) recently posted answers to Frequently Asked Questions related to the new Fast Food Wage Order and increased state minimum wage for hospitality workers, both of which take effect on December 31, 2015. As previously covered here, the state minimum wage in New York will increase to $9.00 … Continue Reading
Last week, the New York Industrial Board of Appeals (an arm of the New York Department of Labor) heard oral argument on the National Restaurant Association’s petition to invalidate the Department of Labor’s recent Fast Food Wage Order. If implemented, the Wage Order, which is scheduled to take effect on December 31, 2015, would increase … Continue Reading
Attempting to provide clarity to a subject that is a regular source of litigation, the Court of Appeals for the Fifth Circuit has issued an extended, detailed analysis addressing the circumstances under which an employee’s position is “customarily and regularly” tipped for purposes of participating in a valid tip pool under 29 U.S.C. § 203(m). … Continue Reading
In accordance with the Ninth Circuit and several other federal court rulings, the Court of Appeals for the Fourth Circuit yesterday held that an employee cannot bring a claim for wages based on allegedly misappropriated gratuities under the FLSA unless the employer used the tip credit set forth in 29 U.S.C. § 203(m). Trejo v. Ryman … Continue Reading
In 2013, New York’s highest state court considered which employees are eligible to participate in sharing tips from a communal tip jar, and even if eligible, whether the employer could nonetheless exclude them from participating. The New York court held an employer may exclude employees from sharing in tips even if they would otherwise be … Continue Reading
In New York, the cash wage due to tipped workers will increase to $7.50 at the end of the year, following an Order from acting Commissioner of Labor Mario Musolino. Commissioner Musolino accepted this recommendation from the Wage Board convened by his predecessor. This order will reduce the tip credit to $1.50/hour off the minimum … Continue Reading
Completing its task assigned by former Commissioner of Labor Peter Rivera, the current New York Wage Board has issued its recommended findings to the Commissioner with respect to tip credit issues. Most importantly for hospitality employers – an industry sector which includes many small, low-margin businesses – if approved by the Commissioner, the available tip … Continue Reading
While many state laws regulate the distribution of gratuities (as well as service charges and other fees), the overwhelming judicial view, as originally set forth by the Ninth Circuit in Cumbie v. Woody Woo and joined by district courts in other jurisdictions, holds that an employee’s right to tips under the FLSA flows exclusively from … Continue Reading
