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US Supreme Court to Decide Wage Theft Case

Apr 20 2018

Overwhelming Opposition to DOL’s Proposed Changes to Law for Tipped Employees Makes a Difference

The Department of Labor (DOL) under the current administration proposed changing the law to permit restaurant employers to require tip sharing between servers and cooks.  The DOL’s proposed rule received more than 218,000 comments, most of which were negative.  The Economic Policy Institute recently published a report that estimated $5.8 billion dollars in tips would be taken from servers, redistributed to back of the house staff, and possibly just retained by the employer, if the DOL’s rule had passed.

Currently, the federal minimum wage for workers who get tips is $2.13 per hour, when the employer takes the maximum tip credit.  Several states no longer permit an employer to take a tip credit.

The Fair Labor Standards Act is a federal law that sets forth the parameters of minimum wage and overtime for all employers. In addition to the FLSA, most states have corresponding wage laws that provide a state minimum wage rate.  In fact, many cities and states have already raised their overall minimum wages, as the federal law has become out of date.  It was last updated in 2009.

The 2,232-page spending bill passed in March 2018 included a section that made clear that employers may not pocket any portion of tips that diners leave for workers.   Despite threatening to veto the bill, President Trump did eventually sign it.  Since taking office, the Department of Labor under the Trump administration has made a number of decisions that lean heavily in favor of the employer and against the employee.  This is unsurprising given the appointments made by President Trump, which have all been very pro-employer appointments.  The passage of this bill marks a rare victory for employees, amid a series of pro-employer decisions from the Department of Labor.

Written by Wage Authority Group · Categorized: Tip-Sharing

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