A district court recently held that the U.S. Department of Labor’s (DOL) “Dual Jobs” Final Rule was a “permissible construction” of the Fair Labor Standards Act’s (FLSA) tip credit requirements. In Restaurant Law Center v. U.S. Department of Labor, the U.S. district court for the Western District of Texas upheld the Final Rule and denied the Restaurant Law Center’s request to enjoin the Final Rule’s enforcement.
Background
On October 28, 2021, the DOL published its Final Rule that limits the amount of time tipped employees can spend doing related non-tipped activities during periods that an employer utilizes the tip credit.
The Final Rule clarifies that an employer may only take a tip credit for the hours when an employee is doing work that is tip-producing or engaged in tasks that directly support tip producing work. An employer can take a tip credit only when the tipped employee is performing tip-producing work or when the tipped employee is performing work that directly supports tip-producing work as long as the tipped worker does not spend a substantial amount of time doing tip-supporting work. The Rule defines a substantial amount of time as more than 20% of the hours worked during the employee’s workweek or a continuous period of time that exceeds 30 minutes.
The Final Rule became effective on December 28, 2021. Shortly thereafter, the Restaurant Law Center (RLC) filed suit against the DOL to enjoin the Rule from taking effect. The district court denied RLC’s motion...
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