Overtime Lawyer Blog

Recently, a federal court upheld the Department of Labor’s tip credit notice regulation. This regulation requires that employers provide notice to “tipped employees” of the federal Fair Labor Standards Act tip credit provisions.

The Fair Labor Standards Act (FLSA) is one of the oldest federal employment laws. This Depression-era law sets forth certain minimum wage and overtime standards applicable to virtually all U.S. employers. The FLSA is one of the most employee-friendly of the federal labor laws.

One of the rules the FLSA sets forth is the tip provision. The tip provision provides that an employer is allowed to pay tipped employees $2.13, rather than the current minimum wage ($7.25 in most states), and use an employee’s tips as a credit toward the rest of the minimum wage. However, an employer may only use a tip credit if it informed its employees that it is going to do so.

In National Restaurant Association v. Solis, a D.C. court evaluated just what steps an employer must take to adequately “inform” its employees. In 2011, the Department of Labor announced employers must inform employees:

• of the amount of the cash wage to be paid to the employee;
• of the additional amount by which the wages of the employee are increased by the tip credit (the value of which may not exceed actual tips received);
• that all tips must be retained by the employee (except for a valid tip pooling arrangement); and
• that the tip credit shall not apply to any employee who has not been informed of these requirements.

The court however did not say that employers must inform employees of the tip credit provisions in writing.

Continue reading "Tip Notice Regulations Upheld" »

Next time you go to an Atlanta sushi or other nice restaurant, notice the side conversations among the staff. Much of the time, it concentrates on tips, taxes, and other paperwork that most restaurant workers know little or nothing about.

If you work for tips, one of the more disliked conventions in the hospitality business is the practice of tip pooling, where the wait staff makes the tips and then is mandated to share them with the host staff, bus staff, etc. This is different from the wait staff voluntarily giving a percentage of tips to their co-workers, and has tax and other implications. This practice has its own set of rules for both employers and employees, and is easily abused by employers looking to save a few bucks here and there.

Continue reading "Tip Pooling under the FLSA" »

Two major amendments to the Fair Labor Standards Act, one each by a Republican and a Democrat, could profoundly change several FLSA standards for overtime and minimum wages if and when they are passed into law.

The first, introduced in February by Congresswoman Cathy McMorris Rodgers (R. WA), would allow comp time in the private sector. The second, introduced last week by Rep. Donna Edwards (D-MD), raises the minimum wage for restaurant workers. Both bills are fairly controversial, but for different reasons.

Continue reading "Pending FLSA Legislation" »

No matter what, people have to eat. And restaurant employees will always be there to serve them.

There are over 7 million people employed in restaurants in the United States, a large percentage of whom work in fast food establishments. These jobs are often very transient, and the fact is that many fast food workers don’t realize that they have a number of rights under federal employment law.

Most large fast food restaurants are covered under the Fair Labor Standards Act. Any restaurant or fast food business with annual gross sales from one or more establishments that total at least $500,000 are subject to the FLSA.

Continue reading "Fast Food and Restaurant Workers and the FLSA" »

In what appears to be the first such case to reach a federal appeals court, the Eleventh Circuit Court of Appeals (the federal appeals court for the federal district courts of Georgia, Florida and Alabama) recently affirmed a decision by a Miami federal district court, which held that the airlines’ practice of charging baggage handling fees for curbside check-in did not unlawfully deprive the skycaps of their tips. Pellon v. Business Representation International, Inc.

In the case, 53 skycaps had brought a collective action under the FLSA against Business Representation International, Inc., the baggage handling contractor for American Airlines at Miami International Airport, alleging that they had been deprived of millions of dollars in unpaid tips as a result of the baggage handling fees imposed by American.

Continue reading "Skycaps’ Claim for Tips under FLSA Grounded by Eleventh Circuit" »