Tuesday, July 6, 2010

The Treatment of Tips under the FLSA: Notice Requirements for Use of Tip Credits

The FLSA requires that employees be informed of how tips will be credited toward minimum wage and that all tips be retained by employees.  In Kilgore v. Outback Steakhouse,160 F.3d 294 (6th Cir. 1998), the Sixth Circuit held that providing employees with a tip policy page explaining how tips would be credited toward minimum wage is sufficient to meet the notice requirement for tip credits.  The court remanded the case with respect to three employees who claimed they had either not been given notice or been discouraged from reading the notice.

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