Tag Archives: tip credit

DOL Confirms to OMB It Will Reverse Course on Yet Another Controversial Regulation, New Rule Will Reduce Restrictions on Tip Sharing

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

Federal Court In Florida Is Latest To Reject DOL Regulation, Finds FLSA Does Not Require That Employees Receiving Full Minimum Wage Retain All Tips

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

Federal Court In Georgia Rejects DOL Regulation, Rules FLSA Does Not Require That Employees Receiving Full Minimum Wage Retain All Tips

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

Prominent NY Restaurateur Eliminates Tipping

As New York’s hospitality industry prepares for a reduced tip credit and a fast food minimum wage, one New York restaurateur has announced its intention to eliminate tipping and thus, by extension, use of the tip credit: New York City’s Danny Meyer.  This lengthy Eater feature discusses Meyer’s audacious new Hospitality Included program, noting the … Continue Reading

Fifth Circuit Provides Guidance Regarding Occupations Which “Customarily And Regularly” Receive Tips

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

The Confusing Array of Wage Hour Developments Impacting New York State Employers’ Wage and Hour Compliance

In prior posts, we have summarized the New York State Department of Labor’s most recent rulemaking processes, comprised of two separate wage boards. The first, in 2014, addressed the hospitality industry as a whole, while more recently, in 2015, another highly publicized wage board addressed the subset of that industry deemed “fast food.” Employers should … Continue Reading

Minimum Wage Increases – Another Challenge For National Employers and Unintended Consequences For the Public

As with the recent uptick in state and municipal paid leave laws, employers in multiple jurisdictions now find themselves faced with a similar national bandwagon in favor of increased state and municipal minimum wage requirements, highlighted by the Los Angeles City Council’s recent decision to ratify a proposal moving that City’s minimum wage to $15 … Continue Reading

NY Acting Commissioner of Labor Issues Wage Board Order Reducing New York Tip Credit to $1.50

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

New York Wage Board Issues Recommendation Regarding Tip Credit

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

Utah Federal Court Reiterates That Employees Are Only Entitled to Tips Under FLSA If A Tip Credit Is Applied

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

NYS Commissioner of Labor Issues Official Wage Board Charge

On Monday, New York Commissioner of Labor Peter Rivera formally issued his Charge to the recently convened 2014 Wage Board.  The Charge, available here, asks the Board to answer the following question: What modifications, if any, should be made to the required cash wage rates and the allowable credits for tips, meals, and lodging, for … Continue Reading

DOL Announces Proposed Rule Effectuating Increase To Contractor Minimum Wage

As discussed in greater detail on the Jackson Lewis website here, this week the Department of Labor published its Proposed Rule implementing the minimum wage increase for federal contractors ordered by the President through Executive Order earlier this year.  Under the EO, the minimum wage for work covered by the Davis-Bacon Act or Service Contract … Continue Reading

Citing To Precedent, Nevada Federal Court Rejects FLSA Tip Claim Asserted By Workers Receiving Minimum Wage

A Nevada federal court’s decision is consistent with  other recent federal court decisions holding that an employee has no claim for allegedly misappropriated gratuities under § 203(m) of the FLSA if no tip credit is taken and the employee receives the full minimum wage before tips, as the FLSA does not create  a property right … 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

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

Federal Court in Indiana Dismisses Claims Alleging Work Outside Of “Tipped Occupation” As Contrary To Law And Inadequately Pleaded

In a case defended by Jackson Lewis Wage Hour Practice Group Chair and former Wage and Hour Administrator Paul DeCamp, Judge Theresa Springmann of the Northern District of Indiana on Tuesday dismissed claims brought by a former server employed by an Indiana-based Applebee’s operator alleging the restaurant was not entitled to avail itself of the … Continue Reading

Text of NY Minimum Wage Bill Finalized

The text of the New York legislature’s proposed minimum wage increase confirms increases as previously reported: ·         $8.00 on and after December 31, 2013 ·         $8.75 on and after December 31, 2014 ·         $9.00  on and after December, 2015. Per the language of the amendment, the minimum wage requirements for food service workers and other … Continue Reading

Progress Towards NY Minimum Wage Hike

Reports indicate that the New York State legislature and Governor Cuomo have tentatively reached agreement regarding the terms of the anticipated proposed increase in the state’s minimum wage. As portrayed in news coverage, the latest proposal would increase the minimum wage to $8/hour in 2014, $8.75/hour in 2015 and $9/hour by 2016, but not tie further … Continue Reading

Texas Court Holds “Service Bartenders” May Be Eligible To Participate In A Mandatory Tip Pool Under FLSA

The FLSA and state law often both regulate the distribution of tips. See here. Under the FLSA, an employer can require all “customarily tipped employees” to pool tips generally or require a specific “customarily tipped employee” to share tips with another “customarily tipped employee.”  Disputes often arise as to whether an employee is a “customarily tipped employee” … Continue Reading

Industry Association’s Challenge New USDOL Tip Credit Rule

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 … Continue Reading
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