Several restaurant and lodging associations sued to invalidate the DOL’s rule expanding the FLSA restrictions on tip pooling to include employers who did not take a tip credit. The restaurant and lodging associations argued that, because the Act was silent on that point, the rule was contrary to Congress’s intent. The Ninth Circuit panel of judges disagreed.
The Ninth Circuit, in a split decision, concluded that the DOL was within its rights to expand the rule because the Act was silent on whether it applied to employers who did not take tip credits, and because the DOL’s interpretation was reasonable. Because the Oregon District Court granted summary judgment in favor of the restaurant and lodging associations, the case has been remanded back to the District Court for further proceedings consistent with the Ninth Circuit’s decision.
So what does this mean for employers who have tipped employees? The Ninth Circuit decision makes tip pools which include back-of-the-house employees invalid, even where employers are prohibited from taking tip credits (such as in Oregon). Employers with tip-pooling agreements should review and revise those agreements as soon as possible to remove employees who are not customarily tipped, and consult with employment counsel if questions remain. We will continue to monitor the District Court case on remand (or any appeal that stems from this Ninth Circuit decision).
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Las Alertas electrónicas son escritas por abogados de Barran Liebman para sus clientes y amigos. Las Alertas no son proveídas como asesoramiento legal, sino solo como anuncios de leyes de empleo, leyes laborales y beneficios de empleo. Si esto ha sido remetido a usted y quisieras empezar a recibir las Alertas directamente, por favor mándanos un correo electrónico o llama a Traci Ray al 503-276-2115. Derechos de autor ©2017 por Barran Liebman LLP.