Many hospitality businesses, such as restaurants and bars, have found themselves restructuring their daily operations in light of the current global COVID-19 health crisis, and the subsequent federal, state, and local shelter in place orders. For instance, where restaurants and bars once served customers on a dine-in basis, perhaps they are now restricted to take-out
Federal regulations have long provided that employees whose wages are subject to a tip credit must retain all tips they receive, with the exception that customarily tipped employees — i.e. front-of the-house service employees — are permitted to share in tips received.
In 2011, the U.S. Department of Labor (“DOL”) amended its tip regulations to…
Another luxury New York hotel is the latest target in a constant stream of wage and hour class actions against the hotel and restaurant industry challenging the industry’s practices relating to tip pools and service charges.
Continue Reading Tip Pools and Mandatory Service Charges – Wage and Hour Class Actions Continue to Target Hospitality Employers
In a landmark decision upholding the validity of the employer’s mandatory tip pool, on February 23, 2010, the U.S. Court of Appeals for the Ninth Circuit issued its opinion in Misty Cumbie v. Woody Woo, Inc. No. 08-35718. The court held that where the employer paid a direct wage of at least minimum wage to restaurant wait staff, requiring them to participate in a tip-pooling arrangement with other restaurant employees does not violate the Fair Labor Standards Act. (“FLSA”)..
Continue Reading Tip Pool May Include Employees Not Customarily Tipped If No Tip Credit is Taken