Appeals Court Strikes Down Federal Tipped Wages Rule

A U.S. appeals court has vacated a rule from the Department of Labor that restricted when employers could pay workers who receive tips less than minimum wage. The three-judge panel said the department (DOL) in 2021 improperly issued a rule that said in part that employers could only pay workers $2.13 an hour when the workers were engaged in work that is part of their job but not when the same workers were engaged in other work. As an example, an employer could pay waitresses $2.13 an hour when they were providing service to tables but not when they were preparing food. The Fair Labor Standards Act (FLSA) lets employees pay sub-minimum wage to a tipped worker who is “engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.”...