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.



Advertisements

Latest Economic News

  • CP Rail second-quarter profit hurt by disruptions related to labour strife

    Economic CBC News
    ?Canadian Pacific Railway Ltd. says service interruptions related to labour negotiations and strike notices caused its net income to decrease 10 per cent in the second quarter despite higher revenues. The Calgary-based railway earned $436 million, compared with $480 million a year earlier. Source
  • CP Rail second-quarter profits hurt by disruptions related to labour strife

    Economic CTV News
    CALGARY -- Canadian Pacific Railway Ltd. says service interruptions related to labour negotiations and strike notices caused its net income to decrease 10 per cent in the second quarter despite higher revenues. The Calgary-based railway earned $436 million, compared with $480 million a year earlier. Source
  • Manitoba will charge 'social responsibility fee' on cannabis retailers

    Economic CTV News
    WINNIPEG -- When recreational cannabis is legalized later this year, it will be subject to a government fee and a wholesale markup in Manitoba. The provincial government says a "social responsibility fee" of six per cent will be applied to a cannabis retailer's total annual revenues. Source
  • Costco launches online grocery delivery in Canada

    Economic CTV News
    Costco.ca is the latest retailer to launch an online grocery store in Canada, starting with some stores in southern Ontario. The membership-based retailer has begun offering hundreds of non-perishable grocery items, beauty products and supplements online. Source
  • Nova Scotia's 'unique' cannabis stores unveiled

    Economic CTV News
    HALIFAX -- The Nova Scotia Liquor Corp. offered a glimpse inside one of its coming cannabis stores Wednesday, showcasing a unique retail hybrid not likely found anywhere else in the world. NSLC president and CEO Bret Mitchell took media on a tour of the cannabis store that's inside the NSLC on Joseph Howe Drive in Halifax, saying Nova Scotia is the only jurisdiction that brings cannabis and alcohol sales under one roof. Source
  • Manitoba Hydro boss announces retirement; says the time is right to leave

    Economic CTV News
    WINNIPEG -- The president and CEO of Manitoba Hydro has announced he is retiring less than three years after joining the Crown corporation. Kelvin Shepherd, who joined the utility in December 2015 after a five-year stint at MTS Inc. Source
  • CRA lawyers say Loblaw misused Barbadian subsidiary for tax avoidance

    Economic CTV News
    TORONTO - Government lawyers say Loblaw Companies Ltd.'s Barbadian banking subsidiary was "playing with its own money" rather than an active business with outside customers and is obligated to pay tax back home. Justice Department lawyer Elizabeth Chasson said in her closing arguments at the Tax Court of Canada that Barbados-based Glenhuron Bank Ltd. Source
  • Two become one? Planemakers work on tech to cut pilot numbers

    Economic CBC News
    Airplane manufacturers are working to adapt jets to reduce the number of pilots needed for long-haul flights and to build new cockpits designed for a single aviator in order to ease a global pilot shortage and cut airline costs. Source
  • Condos rushing to ban pot smoking before legalization

    Economic CTV News
    TORONTO -- Gerald Major goes out on the back balcony of his condo several times a day, leaning against the wall and smoking or vaping medicinal cannabis to ease the pain and other symptoms of severe arthritis. Source
  • Marriott to ban plastic straws by next summer

    Economic CTV News
    One of the world's largest hotel companies has followed the lead of other major food and travel players in banning straws across its properties by next summer. Marriott International -- whose portfolio includes more than 6,500 properties in 127 countries and territories around the world -- pledged to eliminate the use of single-use plastic straws by July 2019. Source