Seyfarth Synopsis: After a remand from the Fifth Circuit, a trial court has upheld the validity of the Department of Labor’s 2021 regulation codifying the 80/20 rule, raising the possibility of another appeal.
Welcome to the inaugural edition of Tips from Seyfarth, where we discuss developments in the world of wage and hour law of particular importance to the restaurant and hospitality sectors. We hope you find the content useful; if you do, and would like to receive our regular updates, we invite you to subscribe to Seyfarth’s Wage and Hour Litigation Blog.
For our kickoff of Tips, we write with an update in the latest challenge to the federal Department of Labor’s “dual jobs” regulation codifying the job duties requirements for employers who seek to use the tip credit to satisfy their minimum wage and overtime obligations for tipped workers.
By way of background, under federal law (and many states’ wage and hour laws), employers may take a tip credit to satisfy their minimum wage and overtime obligations for tipped employees. The tip credit is a longstanding and common component of compensation for service workers in the restaurant and lodging sectors. One thorny question that often arises: who counts as a tipped employee? The Fair Labor Standards Act (FLSA) defines a tipped employee as an “employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” Simple enough in theory, but the concept can be hard to apply in...
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