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Changes may be coming to tipped pooling rules

In October 2017, the Department of Labor created a proposal that would rescind a 2011 rule related to tip pooling. That rule forbids employers in New York and other parts of the country from forcing workers who aren’t paid minimum wage from sharing tips with those who typically don’t receive them. The proposal from the DOL would not require employers to abide by this rule if they pay tipped workers the minimum wage.

Those who are in favor of this action say that it could give cooks and those in similar roles an incentive to work harder. However, others say that it is just a way to drive down wages for those who rely on tips in an effort to effectively hire more workers for less money. The courts are currently split on whether the rule should stand. The Ninth Circuit has upheld it while the Tenth Circuit has taken an opposing view.

There is currently an effort to get the Supreme Court to review the case and help create a consensus around the rule. Of course, if the rule is scrapped, it wouldn’t be necessary to pursue a ruling. A request for review from the Supreme Court is still being considered. However, employers are advised to keep an eye out for any changes to tipping rules that may impact their companies.

Employers may face financial or other penalties if they fail to pay workers properly. This generally means following minimum wage and overtime laws as well as rules surrounding how tipped workers must be paid. An attorney may be able to review claims of improper payment and create defenses to the claim. Resolving a claim in a timely manner may make it easier to preserve relationships with employees and protect the brand image that the company portrays.

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