Tip Pooling Rules Expanded

9th Circuit Says Labor Dept. Can Expand Tip Pooling Rule


Tip Pooling Rules Expanded

On Tuesday the Ninth Circuit Court of Appeals ruled that “the Department of Labor was within its rights to clarify and expand” a 2011 tip pooling rule that bars employers who do not take a tip credit from sharing tips with workers who are not “customarily and regularly” tipped.

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From Law360:

In a published opinion, a three-judge panel found in a split decision that the Labor Department did not exceed its authority in imposing a 2011 rule barring kitchen workers from restaurant tip pools, reversing two rulings by district courts in separate cases filed in Oregon and Nevada and consolidated for the appellate case.

Circuit Judge Harry Pregerson, writing for himself and the concurring Circuit Judge John B. Owens, wrote that the Fair Labor Standards Act allows an employer to use a worker’s tips to fulfill minimum wage requirements — known as taking a “tip credit” — and also holds that employers who do so can establish tip pools only when they are composed exclusively of employees who are customarily tipped. Judge Pregerson wrote that while the Ninth Circuit’ s 2010 decision in Cumbie v. Woody Woo Inc. held that employers who do not take a tip credit can institute tip pooling arrangements involving both regularly tipped workers, such as waiters, and not regularly tipped workers, such as kitchen staff, the situation has now changed.

Joshua D. Buck of Thierman Buck, LLP argued the Nevada case before the Ninth Circuit last July on behalf of former dealers of the Wynn Las Vegas, who had complained that their tips should not be shared with casino floor supervisors.

For more, see Wynn adv. Cesarz

Also see: US Circuit Court of Appeals rules on tip-sharing among workers on SFgate.com

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