Baldwin Haspel Burke & Mayer LLC

Employment Law Update: Proposed Reversal of Regulations Concerning Tip Pooling

Lance Arnold - 

As all employers in the food service industry are aware, the Fair Labor Standards Act allows a “tip credit” of $5.12 per hour, provided hourly wages are paid in the amount of $2.13 and as long as tips exceed the credit. Under the current rule, which is the subject of litigation, only employees that normally receive tips may be included in tip pooling arrangements. In other words, back of the house and management may not share in the tip pool. The U.S. Department of Labor is processing a rule change that will free tip pools from the current restrictions, provided the current minimum hourly rate wage of $7.25 is paid to all participating in the tip pool and the credit is not taken. Prompt agency action on the change is anticipated.

If you have any questions regarding this matter, please contact Lance Arnold at 504.569.2900 or larnold@bhbmlaw.com.


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