Out With The Old; In With The Original: DOL Re-issues 2009 Tip Credit Guidance

Briit, Louis - 300dpi
Louis Britt

On November 8, 2018, the U.S. Department of Labor (DOL) re-issued an opinion letter abandoning the “80/20 Rule,” which prohibited employers from taking a tip credit if a tipped employee spent more than 20% of his or her working time on non-tipped work.

The opinion letter is a re-issuance of one previously published on January 16, 2009 by the Bush administration.  The letter, however, was withdrawn once President Obama took office. The DOL’s new guidance provides restaurant and hospitality employers with clarity and a more practical approach defining when a tip credit can be taken. Continue reading

Austin’s Third Court of Appeals Holds Austin’s Paid Sick Leave Ordinance Unconstitutional

Austin’s paid sick leave ordinance, which was supposed to go into effect this past October, has been held unconstitutional by the Third Court of Appeals in Austin. The court of appeals held that the ordinance establishes a “wage” and, as such, it is preempted by Texas Minimum Wage Act. The Texas Minimum Wage Act specifically precludes municipalities from regulating the wages paid by employers who are subject to the Fair Labor Standards Act (FLSA) and specifically provides that the Texas Minimum Wage Act supersedes a “wage” established in an ordinance governing wages in private employment. The court of appeals remanded the case back to the district court, instructing the lower court to grant the State’s application for temporary injunction and for further proceedings consistent with its ruling. Continue reading

More Green is Coming to Workers in Two Red States

Cummings, Angela - 300dpi
Angela Cummings

As everyone knows, an historic midterm election occurred this week. Early projections from The New York Times estimate that more than 114 million ballots were case this year, which presents an increase of almost 30 million votes from the 2014 midterms. The big take-aways include the Democrats retaking control of the House and the Republicans retaining their majority in the Senate. Also, a record number of female candidates (more than 250) and people of color (almost 200) ran for office in this election, with many of these candidates throwing their hats in the ring for the very first time. Not surprisingly, health care, immigration and the economy were at the top of the list for voters during exit poll interviews. Continue reading

Tip Credits and Florida Minimum Wage Laws

Gomez, Rudy - 300dpi
Rudy Gomez

Background: The Fair Labor Standards Act (“FLSA”) and Florida minimum wage law allow an employer to take a tip credit toward its minimum wage obligation for “tipped employees”. A “tipped employee” is an employee who customarily and regularly receives more than $30 per month in tips. 29 U.S.C. § 203(t). An employer is permitted to take a tip credit equal to the difference between the minimum wage (currently $8.25 in Florida) and the required cash wage (currently must be at least $5.23 in Florida). Thus, the maximum tip credit that an employer can currently claim under the FLSA and Florida law is $3.02 per hour ($8.25 – $5.23).  Continue reading

The Fate of the DOL’s 80-20 Rule: Will the 80-20 Rule Survive?

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Jeffrey Douglas

The U.S. Department of Labor’s (“DOL”) “80/20 Rule” has caused significant anxiety and concern for employers in the restaurant industry and other industries with tipped employees.  A recent spate of nation-wide class action litigation is leading to record-setting settlements for restaurant employers.  However, in a recent lawsuit filed in the Western District of Texas, Restaurant Law Center, et al. v. United States Department of Labor, 18-cv-567 (W.D.Tex.), national and local restaurant groups hope to bring an end to this wave of litigation by seeking to invalidate the 80/20 Rule. Continue reading

North Carolina (Surprisingly) Becomes First State to Increase Minimum Wage to $15/Hour For Most State Employees

Cummings, Angela - 300dpi
Angela Cummings

North Carolina, like many other states in the Southeast, rarely takes the prize when it comes to being a trailblazer for employment laws. Instead, states such as California, New York or Oregon are the usual suspects for such distinctions. However, on July 1, 2018, North Carolina did become the first state in the nation to increase the minimum wage for most of its state employees to $15 per hour (which would equate to a minimum of $31,200, annually). New York, by contrast, does not plan to reach the $15 per hour minimum wage milestone for its state employees until 2021.  Continue reading