Executive Summary: On Monday, October 7, 2019, the Department of Labor (DOL) proposed a new 80/20 rule and tip pooling regulation. First, the proposed regulation, if finalized, will permit employers to take a tip credit regardless of the amount of non-tip generating work (such as cleaning tables or folding napkins) a tipped employee performs as long as it is performed contemporaneously with his/her tipped duties, or within a reasonable time immediately before or after performing tipped duties. Second, the proposed regulation eliminates some regulatory restrictions regarding tip pooling when the employer does not take a tip credit. If the proposed rule is finalized, employers who do not take a tip credit will be permitted to include “back-of-the-house” employees who usually do not receive tips (such as cooks and dishwashers) as part of a tip pool. Lastly, the existing rule prohibiting employers from keeping employees’ tips or participating in tip-pooling arrangements will remain. Continue reading
Effective January 1, 2019, Florida’s minimum wage rate will increase from $8.25 per hour to $8.46 per hour. The increase is calculated by the Florida Department of Economic Opportunity and is based on the percentage increase in the Consumer Price Index for the South Region. Continue reading
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 The letter, however, was withdrawn once President Obama took office.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
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 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