In early November 2022, nearly 74 percent of D.C. voters approved Initiative 82, the “District of Columbia Tip Credit Elimination Act,” which will gradually eliminate use of the tip credit in the District of Columbia by 2027.
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.
On October 28, 2021, the U.S. Department of Labor (DOL) released a final rule that may cause many employers in the restaurant, hospitality, and service industries to rethink and/or end their use of tip credits under the federal Fair Labor Standards Act (FLSA). Under the FLSA, an employer that meets certain requirements may count a limited amount of the tips its tipped employees receive as a credit toward its federal minimum wage obligation—a practice which is known as a “tip credit.”
Employers will soon face stricter financial penalties for keeping their employees’ tips under a final rule published by the U.S. Department of Labor (DOL) on September 24, 2021. Section 3(m)(2)(B) of the Fair Labor Standards Act (FLSA) prohibits employers—including “managers and supervisors”—from keeping employees’ tips “for any purposes,” regardless of whether employers claim a tip credit.
On June 23, 2021, the United States Department of Labor (DOL) published a notice of proposed rulemaking (NPRM) that would create greater limitations on an employer’s ability to take a tip credit under the federal Fair Labor Standards Act (FLSA).
The acronym SLAPP stands for “Strategic Lawsuit Against Public Participation.” A SLAPP lawsuit seeks to chill, dissuade, or punish a party’s exercise of constitutional rights to free speech and to petition the government for redress of grievances.