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
tip credit
D.C. District Judge Rules Tip Pool Participation Of Maitre ‘d, Others Lawful Under FLSA
While the FLSA governs the payment of minimum wage and overtime, it does not by its statutory language regulate the receipt of gratuities. However, Section 3(m) of the FLSA (29 U.S.C. § 203(m)) requires that employees paid pursuant to the “tip credit” provision (i.e., paid less than the standard minimum wage of $7.25 due…
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…
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…
USDOL Revises Tip Credit Regulations, Leaves Others Unchanged
Following up on proposed regulations issued in 2008 for notice and comment, the U.S. Department of Labor issued final regulations last week, effective 30 days following publication in the Federal Register. These regulations address the issues below but other than in regard to use of the tip credit under Section 3(m), the changes to the text…
Federal Legislation To Decrease FLSA Tip Credit Proposed
Last Thursday, Donna Edwards (D-MD) introduced a bill to the House of Representatives which would increase the tip credit minimum wage for the first time since 1991. The Working For Adequate Gains For Employment In Services Act (WAGE Act) would increase the tip credit minimum wage to $3.75/hour under federal law, with subsequent increases culminating…
Southern District of New York Judge Ratifies Legality of Participation in Tip Pool By Captains and Banquet Coordinator
While the New York State Department of Labor’s new Hospitality Industry Wage Order clarified many wage and hour issues for industry employers, the appropriateness of tip pool participation of certain categories of employee continues to be an area of uncertainty. On January 13, 2011, Federal District Judge Laura Taylor Swain granted summary judgment to Manhattan restaurant…
New York Hospitality Wage Order Goes Final: New Rules Effective 1/1/11
Yesterday, the New York State Department of Labor issued the final version of the new Hospitality Industry Wage Order, as previously discussed here and here. The final Wage Order, substantially revises various long-standing New York industry rules, including, the tip credit amount, permissibility of tip pooling, and spread of hours calculations. The Final Wage Order includes…
New York’s Consolidated Hospitality Industry Wage Order: Status?
As previously reported in detail here, in November 2009 then-New York Commissioner of Labor Patricia Smith issued an Order accepting the 2009 Restaurant and Hotel Industry Wage Board’s recommendation to consolidate and modify the Wage Orders currently in effect covering New York restaurant and hotel industry employers. The Department however has yet to issue the…
The 20% Rule For Tipped Employees – Eighth Circuit Invited to Decide Whether To Adopt USDOL Position
In the food service industry, an employer can take a tip credit against the minimum wage for customarily tipped employees, such as servers, bus persons and bartenders. Under federal law, a restaurant can pay employees holding such positions $2.13 per hour, rather than $7.25 per hour, as long as the employees receive sufficient tips to…