U.S. appeals court upholds limit on sharing of tips among workers

SAN FRANCISCO -- Businesses cannot collect tips given to waiters, casino dealers or other service employees to share with support staff such as dishwashers even if the tipped employees are receiving minimum wage, a U.S.

See Full Article

federal appeals court has ruled.

The 2-1 decision by the 9th U.S. Circuit Court of Appeals upheld a 2011 U.S. Labor Department rule.

The 9th Circuit said Tuesday that the rule was reasonable and consistent with Congress's goal of ensuring tips stay with employees who receive them.

The court overturned district courts in Nevada and Oregon. The 9th Circuit ruling would largely apply to states that require workers to get the state minimum wage on top of any tips. Seven states fall into that category, according to the labour department's Wage and Hour Division: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.

It was not immediately clear what the impact would be on back-end workers in those states.

The labour department has previously banned employers who use tips to fulfil their hourly minimum wage requirements from distributing those tips to employees who don't regularly receive tips.

"The premise is the tip is never the employer's," said Reuel Schiller, a labour law professor at the University of California, Hastings in San Francisco. "The employer doesn't have the power to take that from the waiter and give it to a dishwasher because it's not the employer's money."

Supporters of the rule would say the employer should pay the dishwasher higher wages or charge customers to pay the dishwasher instead of having other staff subsidize the dishwasher's pay, Schiller said.

The 9th Circuit considered two lawsuits in its ruling -- one brought on behalf of plaintiffs including restaurant and lodging associations in Washington, Oregon and Alaska and the other by two casino dealers against Wynn Las Vegas.

The casino dealers said Wynn was taking their tips to share with other employees. The restaurant and lodging associations said the federal rule would prevent back-end staff from sharing in tips.

Paul DeCamp, an attorney for the restaurant and lodging associations, said there was a decent chance one of the plaintiffs would appeal.

"The real world impact of this sort of regulation that the Department of Labor has issued is important for people to understand," DeCamp said. "The people who are hurt most by the 9th Circuit ruling are the people in the kitchen, the cooks, the dishwashers, the prep cooks and so on."

Michael Weaver, a spokesman for Wynn Resorts, said Wynn was studying the ruling to decide its next steps.


Latest Economic News

  • Lululemon warns Ottawa it could move headquarters out of Canada

    Economic CTV News
    Vancouver-based retailer Lululemon has threatened it could move its headquarters out of Canada if federal regulators don’t grant them an exemption to the Temporary Foreign Workers (TFW) program. The popular apparel company wrote a letter submitted to the House of Commons Finance Committee in late July seeking an exemption to the program in order to expand its business and remain in Canada. Source
  • Precision Drilling had $47 million net loss for third quarter

    Economic CTV News
    CALGARY - Precision Drilling Corp. had a $47 million net loss for the third quarter as revenue declined 45 per cent from last year. The loss amounted to 16 cents per share, which was an improvement from the Calgary-based drilling company's 2015 third quarter loss of $87 million or 30 cents per share. Source
  • Second wave of cuts as Bombardier slashes 7,500 jobs

    Economic Toronto Sun
    MONTREAL — A second large wave of job cuts is hitting Bombardier workers in less than a year as another 7,500 positions are to be eliminated around the world through the end of 2018. About 2,000 positions will be cut across Canada, including 1,500 in Quebec. Source
  • Death from overwork in Japan shows lessons unlearned

    Economic CTV News
    TOKYO -- Matsuri Takahashi's dream career at Japan's top ad agency, Dentsu, ended with her suicide as her overtime pushed past 100 hours a month. "I'm emotionless and only wish to sleep," she wrote, exhausted and depressed, in a Twitter post in October 2015, six months after starting the job. Source
  • Bombardier cutting 7,500 jobs over next two years

    Economic CTV News
    MONTREAL - Bombardier says it is cutting another 7,500 jobs around the world over the next two years, including about 2,000 across Canada. The Montreal-based plane and train maker says the reductions designed to save about US$300 million a year are part of its plan to restore its profitability by 2020. Source
  • Canadians becoming less dependent on banks: EY report

    Economic CTV News
    TORONTO - A new survey from EY suggests Canadians are becoming less dependent upon their banks as the main providers of financial services. The business consultancy firm says a quarter of those polled agreed with the statement, "I'm less reliant on established (financial services) companies and banks these days, as there are more options to self-manage my finances. Source
  • Deadline looming for Canada-EU trade pact

    Economic CTV News
    OTTAWA - They're listening carefully to the noisy argument spilling out of their neighbour's house - but for the moment they're giving the appearance of keeping their noses out of it. That essentially is the Canadian government's position with the deadline looming for European Union countries to approve their wide-ranging free trade deal with Canada. Source
  • BAT offers to buy Reynolds in $47B deal

    Economic CTV News
    LONDON - British American Tobacco has offered to buy Reynolds American Inc. in a $47 billion cash-and-stock deal. The London-based company offered Friday to buy the 57.8 per cent of Reynolds it doesn't already own for the equivalent of $56.50 per share. Source
  • $47B offer to create world's biggest tobacco company

    Economic CTV News
    LONDON -- British American Tobacco is offering to buy Reynolds American Inc. in a $47 billion deal that would create the world's largest publicly traded tobacco company and attempt to make up for a decline in smoking in the U.S. Source
  • Asian shares mixed on European Central Bank stimulus hopes

    Economic CTV News
    HONG KONG - Asia stock markets drifted Friday as oil prices slid. The dollar rallied after Europe's central bank kept the door open for more monetary stimulus, leaving investor sentiment mixed. KEEPING SCORE: Japan's benchmark Nikkei 225 index rose 0.3 per cent to 17,285.53 but South Korea's Kospi lost 0.3 per cent to 2,032.85. Source