Legal Battles Cloud Tipped Wage Limits After Fifth Cir. Ruling

The Fifth Circuit’s decision to vacate a US Department of Labor rule limiting when employers can use the tip credit means they will have fewer restrictions on the types of activities tip-earning workers can perform while still being paid less than the minimum wage.

But whether the decades-old guidance that informed the bulk of the proposal is still intact is an open question, some attorneys say.

The Ninth and Eighth Circuits have found that the DOL’s past 80/20 guidance—which refers to the limits on how workers spend their time on the clock—was reasonable prior to the Fifth Circuit’s ruling.

“So ...