Eleventh Circuit: Service Charges Are Wages, Not Tips, Under FLSA

On March 18, 2022, the Eleventh Circuit Court of Appeals ruled in Compere v. Nusret Miami, LLC, a collective action under the Fair Labor Standards Act (FLSA), that Nusr-et Steakhouse properly used automatically charged fees on bills to pay its employees’ wages because the fees were service charges. The plaintiffs, a group of tipped employees, had argued these fees were not service charges but instead were tips. The distinction is critical because service charges and tips are treated very differently under federal laws and regulations.