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Under New York law, a customarily tipped employee cannot be forced to share tips with an employer or its “agent”. In 2009, a New York federal judge ruled that Starbucks did not violate the New York Labor law (specifically Section 196-d) by permitting shift supervisors at New York Starbucks to receive tips from the coffee…

Employers who maintain a tip pool are likely aware that, depending on the employer’s state of operation and prevailing law, such a tip pool typically can consist only employees who are both “customarily and regularly” tipped and who are not themselves “employers” or those with employer authority. Last year, we discussed a court’s recognition of the…

General practitioners and non-attorneys may or may not be aware that the applicability of the FLSA’s overtime provision to various aspects of a business is not always uniform across the “establishment.” This is because the FLSA’s implementing regulations contemplate multiple distinct “establishments” even within the same physical premises. 29 C.F.R. § 779.305.Two new District Court decisions highlight…

As discussed repeatedly in these pages and elsewhere, employers have faced innumerable lawsuits regarding their alleged failure to distribute amounts purported to be gratuities to service staff in their entirety. However, even distributing tip money dollar-for-dollar to service providers is not a panacea against wage claims, as highlighted in a new opinion issuing from the…

As discussed here, Section 3(m) of the FLSA (like many state laws) places restrictions on which employees within a workforce can receive and share in tips. While the FLSA permits tip pooling “among employees who customarily and regularly receive tips," litigation in the hospitality industry often centers around the legality of tip pool participation by…

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…

As analyzed in more detail  here, the California Supreme Court recently ruled that the California labor code provision prohibiting employers from taking or sharing in tips left for employees by customers – Cal. Lab. Code § 351 (“Section 351”) – does not provide  private litigants with a right to sue their employers directly…

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…

The Ninth Circuit Court of Appeals recently ruled that the FLSA does not restrict employer-mandated tip-pooling arrangements when no tip credit is taken by the employer against the minimum wage obligation.  Cumbie v. Woody Woo, Inc., et al., No. 08-35718 (9th Cir. Feb. 23, 2010).  Further, the Court rejected the DOL’s regulation at 29…

The following report is sent to us from Richard I. Greenberg and Felice B. Ekelman

The New York Department of Labor’s 2009 Restaurant and Hotel Industry Wage Board has submitted its Report and Recommendations to consolidate the individual wage orders for the restaurant and hotel industries into a single Hospitality Industry Wage Order.  Commissioner of Labor M. Patricia Smith had convened the Wage Board to recommend changes in the wage and hour regulations that govern restaurant and hotel industry workers following recent modifications to wage rates, gratuities and allowances emanating from the latest increase to the New York minimum wage (see New York Employers Subject to Modified Wage Orders Effective Immediately.

If approved, the September 21, 2009 Wage Board Report and Recommendations would implement many significant changes to existing restaurant and hotel wage orders.  Some of these recommendations are summarized after the jump.Continue Reading New York State Wage Board Approves Revised Hospitality Industry Wage Order