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Recent Ruling Means You May Need To Revise Your Tip-Pooling Plan

In a recent decision by the federal 9th Circuit Court of Appeals, a 2011 U.S. Department of Labor (USDOL) regulation that significantly restricts the common practice of “tip pooling” among wait staff and other service employees was revived. As a result, you should now review your tip-pooling practices and procedures to ensure compliance with the regulation, even if you already comply with California state tip-pooling rules.

Ruling May Change Tipping in California

A three-judge panel of the 9th U.S. Circuit Court of Appeals recently sent shockwaves throughout the hospitality industry, specifically restaurants, when it decided Oregon Restaurant and Lodging Association v. Perez and consolidated case Cesarz, Ngoc Tang v. Wynn Las Vegas LLC, 14-15243 (Feb. 23, 2016). 2016 DJDAR At issue was the legality of "tip pooling."

Tips on Tip Pooling.

In March a California court awarded more than $105 million to Starbucks baristas due to the company's practice of permitting supervisors to share the tips. The case is significant to all California employers that have tip-sharing arrangements.
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