Case in point: How to handle tip-pooling arrangements in Texas — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Case in point: How to handle tip-pooling arrangements in Texas

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in Compensation and Benefits,Human Resources

by Mark A. McNitzky, Ogletree Deakins, San Antonio

You may have heard that the Department of Labor has been focusing some of its enforcement efforts on low-wage service industries, particularly restaurants and fast- food outlets. That’s true. But federal courts are also stepping in to ensure that low-wage employees get every penny they are entitled to.

That’s what recently happened when the 5th Circuit Court of Appeals ruled in a tip-pooling case that the employee who makes coffee in the back (the barista) should not be participating in the restaurant’s tip pool.

In Montano v. Montrose Restaurant Associates, the 5th Circuit Court of Appeals reversed a decision of the Southern District of Texas in which the trial court had granted summary judgment in favor of a restaurant.

The issue: whether it was permissible under the Fair Labor Standards Act (FLSA) for the restaurant to include a back-end barista in a mandatory tip-pooling...(register to read more)

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