4 Tip Credit Compliance Reminders as Summer Nears

Labor and Employment attorney Timothy Taylor was featured in a Law360 article sharing advice for tip credit compliance as the summer hiring season nears. As seasonal businesses reopen and companies boost their workforces for the coming months, one area to which they should pay particular attention is tip credits, since federal and state requirements may differ and the rules in this field change often. For example, under the federal Fair Labor Standards Act (FLSA), employers can pay tipped workers a lower hourly rate as long as tips make up the difference between that amount and the federal minimum wage; on the other hand, states such as California and Washington do not allow this "tip credit," and penalties or litigation resulting from noncompliance can be costly. Mr. Taylor recommended that companies in jurisdictions with this discrepancy "gear their regime to whichever one is the most employee-protective" in addition to staying informed generally about new regulations. The article also delved into side work under the 80/20 rule, and he emphasized giving employees "very clear instructions" about what workers' duties are along with recording them accurately.

READ: 4 Tip Credit Compliance Reminders as Summer Nears (Subscription required)