Employers that utilize the “tip credit” under the federal Fair Labor Standards Act, or whose employees receive tips, should carefully consider regulatory changes that were proposed by USDOL today.
The USDOL has removed the infamous "20% Rule" from its Field Operations Handbook, but employers should be mindful of its disjointed approach to revisions across and within agency materials.
USDOL has finally clarified the so-called “20% Rule” limiting the use of the FLSA tip credit even with respect to individuals qualifying as “tipped employees”, and revised the Field Operations Handbook accordingly.
Tip credit controversies are alive and well as employers seek clarity on the USDOL's so-called 20% Rule regarding "tipped employees" engaging in activities that do not, or at least not directly, produce tips.
Employers should be aware of how we got to the recent FLSA amendment regarding tips, and have a solid understanding of their own tip-related practices, before trying to determine where to go from here.
Whether the FLSA effectively prohibits an employer from imposing certain costs (such as for purchasing a uniform) on an employee depends on a variety of factors, including whether it is cost-prohibitive in the particular circumstances.
The U.S. Department of Labor has now proposed regulatory revisions that would in effect rescind the prior administration's tip-retention restrictions as to employers who do not rely upon the FLSA tip-credit.
The 11th Circuit U.S. Court of Appeals has ruled that a tipped employee for whom no FLSA "tip credit" had been taken, and to whom all FLSA wages due had been paid, had no FLSA claim against her employer with regard to its allegedly having converted some of her tips to its own uses.
Donald Trump's election does not mean that employers may now ignore the coming changes in the federal Fair Labor Standards Act's "white collar" definitions.
Overlooking or permitting substandard work can make it harder to defend against claims that an employee should not have been treated as exempt.