Tipped Employees

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On April 28, 2023, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a decision from the Western District of Texas declining to issue a preliminary injunction barring the Department of Labor (“DOL”) from enforcing a regulation known as the “80/20/30 rule.”

As we previously reported, on October 29, 2021, the DOL issued a final rule for determining which tipped employees may receive “tip credit” in lieu of receiving the full minimum wage directly from the employer.  Under the 80/20/30 rule, employers must pay employees at least the minimum wage if they spend more than 20% of their time on tasks that do not immediately and directly generate tips, including wiping down tables, filling salt and pepper shakers, rolling silverware into napkins, and other duties referred to in the industry as “side work,” or if they spend more than 30 consecutive minutes performing such tasks.  The Restaurant Law Center and the Texas Restaurant Association promptly sought a preliminary injunction in the Western District of Texas.…

Continue Reading Fifth Circuit Reverses and Remands District Court’s Denial of Preliminary Injunction in 80/20/30 Rule Challenge

On March 23, 2023, Utah Governor Spencer Cox signed into law Senate Bill 73 (“SB 73”) expanding the group of employees eligible for tip pooling by allowing employers to include non-tipped employees in a bona fide tip pooling or sharing arrangement.

Historically, only “tipped employees” were permitted to participate in a tip pooling or sharing arrangement under Utah State law. This form of tip pooling is also allowed under federal law and is otherwise known as a traditional tip pool. A “tipped employee” is one who customarily and regularly receives tips or gratuities.”[1] Common examples of tipped employees include waiters and waitresses, whereas dishwashers, chefs, cooks, and janitors are examples of non-tipped employees.…

Continue Reading Utah Expands Tip Pooling to Include Non-Tipped Employees

Gratuities are often helpful for both employees and their employers: tips supplement a worker’s income, and federal law and the laws of most states allow employers to credit a portion of a worker’s tips toward the company’s minimum wage obligations. But what exactly is a tip and how do employers take this so-called “tip credit?”

What is a tip or gratuity?

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Continue Reading Time Is Money: A Quick Wage-Hour Tip on … the Tip Credit 

More than a decade ago, Epstein Becker Green (EBG) created its complimentary wage-hour app, putting federal, state, and local wage-hour laws at employers’ fingertips.

The app provides important information about overtime exemptions, minimum wages, overtime, meal periods, rest periods, on-call time, travel time, and tips that employers can use to remain compliant with the law—and, hopefully, to avoid class action, representative action, and collective action lawsuits and government investigations. …

Continue Reading Epstein Becker Green’s Free Wage-Hour App Includes 2023 Changes to Federal, State, and Local Laws

We seem to say this every year — December always seems to go by far too fast.  And with holidays and vacations, not to mention many employees still working remotely, it’s not unusual for matters to be put off until the new year — or for a project or two to fall through the cracks.
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Continue Reading Time Is Money: A Quick Wage-Hour Tip on … New State and Local Minimum Wage Rates Go Into Effect On January 1, 2023

Wage-Hour-Pay-Stub

On Tuesday, November 8, 2022, Washington, D.C. voters approved a ballot measure to eliminate the “tip credit” which allowed service industry employers to pay servers, bartenders, and other tipped employees $5.35 an hour rather than D.C.’s $16.10 per hour minimum wage. Currently, employers are required to pay the balance if an employee is unable to…

On Friday, October, 29, 2021, the Department of Labor (DOL) issued a final rule regarding how to determine which tipped employees may receive a “tip credit” in lieu of receiving the full minimum wage directly from the employer. The new rule restores the “80/20” rule rescinded under President Trump, requiring employers to pay employees at least the minimum wage if they spend more than 20% of their time working on tasks that do not specifically generate tips such as wiping down tables, filling salt and pepper shakers, and rolling silverware into napkins, or duties referred to in the industry as “side work.” The rule goes into effect on December 31, 2021 and the change represents continuation of a pattern that has continued across administrations with Presidents adopting and rescinding the rule over the past three administrations.
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Continue Reading DOL Restores 80/20 Rule for Tipped Employees

As we previously reported, starting in 2016 the District of Columbia by statute gradually increased its minimum wage to $15.00 per hour, and its tipped minimum to $5.00, effective July 1, 2020. However, included in the statute were provisions for subsequent increases of both these rates based on the annual average increase in the…