Brigitte Duffy and Dana Fleming Published in Bloomberg Corporate Law Journal
“Employers’ Guide to Tip Statutes”

Brigitte Duffy and Dana Fleming's article, "Employers' Guide to Tip Statutes," was published in the Winter 2009 issue of the Bloomberg Corporate Law Journal. In their article, the authors discuss the tremendous surge in lawsuits related to the pooling, sharing, and distribution of tips and gratuities. Brigitte and Dana note, "Class and collective actions alleging violations of federal and state wage and hour laws governing tips are exploding onto state and federal dockets across the country. In this economy, any employer who takes tip credit or operated in the service industry is at risk." The authors continue to explain the federal and state laws for tip credits and tip distributions. They point out, "For states that do not have a state minimum wage or that have expressly adopted the Fair Labor Standards Act (FLSA) requirements and federal minimum wage laws, employers only need to worry about the federal requirements. By contrast, employers in states like California that do not permit any tip credit at all, or Massachusetts which treats service charges as tips, are subject to state tip statute requirements and state minimum wage laws." The authors further note that when state and federal tipping statutes are equally applicable to a single employer, it can become tricky.

“Until the courts issue more interpretive rulings on the various tip statutes, employers should tread very carefully around their tipping policies and practices and consult legal counsel before deciding on any course of action related to tipping,” they conclude.