Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers. Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage.
Continue Reading Department of Labor Makes It Easier for Employees to Share Tips – Rolls Back Prior Restrictions

Under the Fair Labor Standards Act (FLSA), employers who use a tip credit to satisfy their minimum wage obligations for tipped employees must follow certain rules related to those tips. One of those rules relates to the use of tip pools – i.e., pooling of tips received by multiple tipped employees and then dividing the total among the pool participants based on a specified formula.
Continue Reading Ninth Circuit Approves DOL Regulation Expanding Tip-Pooling Rules To All Employers

Section 351 of California’s Labor Code prohibits employers from taking any gratuity patrons leave for their employees, and provides that such gratuity is “the sole property of the employee or employees to whom it was paid, given, or left for.”  A number of Courts of Appeal have consistently held that this prohibition does not extend to employer-mandated tip pooling — where employees must pool and share their tips with other employees.  Louie Hung Kwei Lu, a former card dealer with Hawaiian Gardens Casino, Inc., decided to test these rulings.Continue Reading No Private Cause of Action Against Employers for Taking a Dip in the Tip Pool