By Sahid Fawaz
A federal appellate court has upheld a Department of Labor ruling forbidding restaurants from collecting tips given to employees and then redistributing them to non-tipped employees.
The Chicago Tribune reports:
"Businesses cannot collect tips given to waiters, casino dealers or other service employees to share with support staff such as dishwashers even if the tipped employees are receiving minimum wage, a federal appeals court ruled Tuesday.
The 2-1 decision by the 9th U.S. Circuit Court of Appeals upheld a 2011 U.S. Labor Department rule.
The 9th Circuit said the rule was reasonable and consistent with Congress' goal of ensuring tips stay with employees who receive them.
The court overturned district courts in Nevada and Oregon. The 9th Circuit ruling would largely apply to states that require workers to get the state minimum wage on top of any tips. Seven states fall into that category, according to the labor department's Wage and Hour Division: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.
It was not immediately clear what the impact would be on back-end workers in those states.
The Labor Department has previously banned employers who use tips to fulfill their hourly minimum wage requirements from distributing those tips to employees who don't regularly receive tips."
We think this is a welcomed ruling as employers need to take responsibility for paying workers a fair, living wage rather than using one group of employees to pay another.
For the full article, check out the Chicago Tribune piece here.
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