Tag Archives: gratuities

Massachusetts Highest Court Holds Businesses Not Required to Permit Tipping Under State Law

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

Supreme Court Declines Skycaps’ Appeal of Tip Claim Preemption Ruling

Presumably ending the long-running litigation regarding whether certain Massachusetts skycaps’ common law claims challenging the imposition of a $2 curbside baggage handling fee that allegedly caused a reduction in tips are preempted, the U.S. Supreme Court has declined to hear an appeal of the First Circuit’s 2013 decision finding those claims preempted by the Airline … Continue Reading

Following Woody Woo, Federal Court In Utah Rejects Employee Gratuity Claim Since No Tip Credit Taken

Joining several other recent federal court decisions, including a decision invalidating recently promulgated Department of Labor regulations purporting to address the issue, Judge Ted Stewart of the District of Utah has ruled that an employee has no claim for allegedly misappropriated gratuities under the FLSA unless the employer elected to take the tip credit set … Continue Reading

Minnesota High Court Rules: Tips Are Wages

As discussed in greater detail here, the Minnesota Supreme Court has ruled that gratuities received by night club employees were “wages” within the meaning of Minnesota’s law prohibiting deductions, and thus an employer violated that law when it required employees to pay for “register shortages . . . walkouts . . . [and] unsigned credit-card … Continue Reading

Restaurant Association Defeats Department of Labor, Invalidates 2011 Tip Regulations

In 2010, the Ninth Circuit held in Cumbie v. Woody Woo, Inc., that an employee’s property right to tips attaches under the FLSA only if the employer is taking a tip credit pursuant to 29 U.S.C. § 203(m). In response to this decision the Department of Labor passed widely discussed-regulations which, contrary to the decision, purport … Continue Reading

New York Judge: Deduction of Full “Seamless Web” Fees from Gratuities Potentially Violates FLSA, New York Law

In a decision sure to attract attention within the New York hospitality industry, Judge Alison J. Nathan of the United States District Court for the Southern District of New York ruled in a case of first impression that deducting the full amount of service fees charged by internet food delivery sites (including popular web portal … Continue Reading

New York State Department of Labor Issues Pro-Employer Gratuity Distribution Guidance

New York employers have struggled with the New York State Department of Labor’s view that all gratuities must be distributed on a daily basis, regardless of whether they are collected in cash or via credit card and regardless of employee preference.  Late last week, without notice, the NYSDOL modified this position.  Effective immediately, New York … Continue Reading
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