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DOL, Applebee's Square Off Over Tips In 8th Circ.

Thursday, January 13, 2011

The U.S. Department of Labor, Applebee's International Inc. and workers who claim the chain failed to pay them proper minimum wage sparred before the Eighth Circuit on Thursday over the Fair Labor Standards Act's tip credit provision.  Applebee's is asking the U.S. Court of Appeals for the Eighth Circuit to overturn a decision denying the restaurant summary judgment, in which the lower court deferred to the DOL's position that employers cannot use a tip credit to offset minimum wage requirements when workers spend more than 20 percent of their time on nontip-producing duties.

The plaintiffs originally filed suit in 2006, claiming that Applebee's violated the FLSA by paying servers and bartenders less than minimum wage. The department, which filed an amicus brief in support of the plaintiffs in September, got a green light to take part in oral arguments in the case in December.  The 20 percent figure is found in the DOL Wage and Hour Division's Field Operations Handbook, which interpreted a department regulation that said an employer can use the tip credit if an employee occasionally performs nontip-producing tasks. (click on link to read full story)

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