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Eleventh Circuit Approves Tip Sharing – Will the U.S. Department of Labor Follow Suit?

In late 2017, the United States Department of Labor proposed modifying the rules regarding tip pooling.  Presently, tips belong to the employee earning them, regardless of whether the employee is paid minimum wage or the employer uses a tip credit to satisfy minimum wage.  In the DOL’s proposal, employers who pay the full minimum wage are allowed to require employees to share tips with employees who do not receive direct tips such as dish washers and cooks. 

The Eleventh Circuit Court of Appeals recently addressed this issue in Malivuk v. Ameripark, LLC.  Malivuk was a valet driver who received tips and wages.  She brought a claim arguing her employer violated the Fair Labor Standards Act (FLSA) because it took some of the tips she and other valet drivers earned.  Her employer, however, paid her the minimum wage.

The Eleventh Circuit found Malivuk did not have the ability to bring a cause of action against her employer because she did not argue she was not paid minimum wage or overtime for any hours worked in excess of 40.  The Court noted a plaintiff can only bring a private right of action under the FLSA for violations of minimum wage or overtime.  Here, she asserted neither allegation.

Thus, it appears in the Eleventh Circuit when an employer pays an employee the minimum wage and does not take a tip credit, the employer can require the employee to share tips.  While this case only applies to employers in Georgia, Alabama, and Florida, in light of the DOL’s proposed rule, this may be the wave of the future.  However, employers must also review local and state laws regarding tip pooling and credits. 

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.