When should a tipped employee no longer be treated as a tipped employee? Plaintiffs’ lawyers argue that restaurants cannot utilize the tip credit, or pay tipped employees a sub-minimum wage, if tipped employees perform any “non-tipped” duties, such as washing dishes or taking out the trash. Earlier this week, a District Court in the Northern District of Indiana rejected this argument. (See here) Specifically, the court dismissed a former server’s claim that the FLSA was violated by restaurants paying servers, bartenders, and hosts a sub-minimum wage while they performed non-tipped duties. This decision could be far reaching because restaurants across the country are being hit with similar class or collective action lawsuits.
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Tags: conditional certification, tip credit, HR Allen Consulting Services, HR Informant, FLSA