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.
As the summer comes to a close, USDOL’s continued momentum ensures a busy fall for employers. While we await the details, one thing is clear – employers should take these three steps right now.
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.
Here is a handy summary of the minimum wage increases applicable to most employers in the coming year.
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.
In an opinion illustrating the tangled web we weave when de-facto legislation takes place outside of Congress, the Ninth Circuit in Marsh v. J. Alexander's gave deference to the USDOL's sub-regulatory "20% Rule", restricting an FLSA tipped employee's activities, essentially on the basis that the agency's position was previously available online and that employers were therefore presumed to have notice of its potential effect.
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.
Legislation has been introduced that would ultimately more-than-double the FLSA's minimum wage from today's $7.25 an hour to $15 an hour.
There is no such thing as an FLSA "subminimum wage for tipped workers".
Tipped-worker employers should immediately respond to the misleading "tipped minimum wage" PR campaign.