A federal appeals court says 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.
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 labor department’s Wage and Hour Division: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.
An attorney for the restaurant and lodging associations said there was a decent chance one of the plaintiffs would appeal.
