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ARTICLE · 04 SEPTEMBER 2015

Fifth Circuit Rules On Tip Pooling

Littler Mendelson
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In Montano v. Montrose Restaurant Associates, Inc., the U.S. Court of Appeals for the Fifth Circuit was presented with what may seem like an easy issue: does including a "coffeeman" in a tip pool invalidate the tip credit?

United StatesEmployment and HR
Jeremy Hawpe
Jeremy Hawpe
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In Montano v. Montrose Restaurant Associates, Inc., the U.S. Court of Appeals for the Fifth Circuit was presented with what may seem like an easy issue:  does including a "coffeeman" in a tip pool invalidate the tip credit?  The Fifth Circuit's answer?  It depends.  While the court attempted to articulate a test that would provide some clarity, it may be such a fact-intensive inquiry that it does not provide employers much guidance.

Case Background

A fine-dining restaurant in Houston required its waiters to participate in a tip pool.  At the end of the shift, the tips were divided among the lead waiter (or captain), front waiter, back waiter, busboy, bartender, and coffeeman.  Waiters were paid $2.13 per hour, in addition to their tips.

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