![]() ![]() As employers know, these lawsuits are expensive, time-consuming, and can result in unfair media characterizations (i.e., “Wage theft!”).Īt the state level, we have seen an increasing number of ballot initiatives and legislative proposals that would ultimately phase out use of the tip credit. ![]() Litigation under the Fair Labor Standards Act (FLSA) generally increased 270% between 20, with tip-credit claims undoubtedly contributing to that growth. The odds of being targeted with a tip-credit related lawsuit have certainly increased over the years. Lawsuits Remain a Constant Threat – and They’re Increasing Using the tip credit in this day and age could sometimes feel like fraught with danger, as various challenges seem to pop up each new day. Multi-Prong Attack Against the Tip Credit But could there be an easy alternative hiding in plain sight that could lighten your burden and take that target off your back? A recent federal appeals court decision in a case involving the celebrity restaurant owner known as Salt Bae shows how the service charge could be a possible solution – and this Insight will provide a six-step blueprint should you decide to walk this alternative path. ![]() Not only are you in danger of being hit with a costly lawsuit if you use the tip credit, but you can’t help but see the federal and state governments attacking the concept itself. Hospitality employers who utilize the “tip credit” under federal wage and hour law may feel as if they operate with a bullseye on their backs given the multi-prong assault underway against the practice. ![]()
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