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ARTICLE · 07 SEPTEMBER 2011

How Much Is Too Much?

Fisher Phillips LLP
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The U.S. Court of Appeals for the 8th Circuit recently issued a decision that has significant ramifications for employers making use of the tip-credit provisions of the Fair Labor Standards Act (FLSA).

United StatesEmployment and HR
John McLachlan
John McLachlan
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The U.S. Court of Appeals for the 8th Circuit recently issued a decision that has significant ramifications for employers making use of the tip-credit provisions of the Fair Labor Standards Act (FLSA). The decision mandates that employers who use the FLSA tip credit provisions to pay tipped employees should pay close attention to the amount of time those employees spend performing non-tip-producing work. Fast v. Applebee's International, Inc.

How It All Began

This case resulted from a lawsuit filed by servers and bartenders against Applebee's claiming that they were not properly paid for all the work they performed. Under the FLSA employers are permitted to pay employees in a tipped occupation a cash wage of $2.13 per hour so long as employees receive tips sufficient to ensure that they receive at least the minimum wage (currently $7.25) for all hours worked in a workweek.

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