Tips and their distribution among the staff have plagued the hospitality industry for years. Federal courts interpret the federal law differently and states have enacted their own statutes that place employers in constant uncertainty, depending on where they are located. Also, tip pooling arrangements have been a regular part of many restaurant operations and are ...Read more
Ninth Circuit Reverses District Court Decisions, Reviving U.S. Department of Labor Rule Restricting Tip-Pool Distribution
Reversing a federal district court’s order invalidating 2011 revisions to the DOL’s tip-pool regulation, a divided Ninth Circuit held the agency acted within its authority when it promulgated the rule change. As revised, the tip pool regulation prohibits an employer from including non-tipped staff in tip pools even when it does not take the tip credit, but ...
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The use of class action lawsuits against large corporations over allegedly illegal tip pooling arrangements is increasingly common. This work examines the use of class action lawsuits for this type of lawsuit and analyzes two recent cases from Massachusetts and New York targeting the legality of Starbucks’ tip-pooling policy under the laws of each state ...Read more