By Lois M. Kosch
Lois M. Kosch is a partner at Wilson Turner Kosmo. She specializes in counseling and representing employers in all aspects of employment law and litigation. Ms. Kosch is a former member of the Labor and Employment Law Section's Executive Committee.
Marsch v. J. Alexander's, LLC, 869 F.3d 1108 9th Cir. (2017)
Employees, former servers and bartenders, brought actions under the Fair Labor Standards Act (FLSA), alleging their employers improperly claimed their tips as credit toward the required minimum wage. A Ninth Circuit Court of Appeals panel vacated the district court's final order and judgment in favor of the employers.
Under the FLSA, an employer must pay a tipped worker at least $2.13 per hour, but may count tips the worker actually receives as a credit against the otherwise payable minimum wage of $7.25 per hour. A Department of Labor (DOL) regulation (29 C.F.R. § 531.56(e)) provides that when an employee performs two distinct jobs for the employer, one tipped, the other not, the employer cannot take the tip credit against hours the employee works at the non-tipped job.
The panel rejected the DOL's informal interpretation of the dual job regulation that changed the focus from distinct jobs each with their associated tasks to a time-per-task approach, dividing tasks into three categories (tip-generating, not tip-generating, but related, and not...
