Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Bloomberg Law Daily Labor Report, in “Punching In: Apple Store Union Gears Up for First Contract Talks,” by Ian Kullgren and Rebecca Rainey.

Following is an excerpt:

Federal judges appeared skeptical last week that restaurant industry groups would face harm from compliance costs if a rule limiting the use of the tip credit is allowed to remain in place.

The US Court of Appeals for the Fifth Circuit heard oral arguments Dec. 6 in the Restaurant Law Center and Texas Restaurant Association’s request for a preliminary injunction to block the rule, which has been in place since late last year.

The legal fight is over a DOL rule that requires employers to pay the full federal minimum wage of $7.25 an hour to tip-earning workers if they spend 20% of their hours a week or more than 30 minutes straight doing non-tip earning work, like rolling silverware. Employers can currently pay their workers as little as $2.13 an hour, so long as the worker earns at least $30 a month in tips and their wages reach the full minimum rate of $7.25 an hour at the end of the pay period.

The appellate court questioned whether a preliminary injunction would be a necessary remedy, given that the lower court overseeing the case has set a hearing in January on motions for summary judgment filed by both the agency and the restaurant groups. The panel of three judges also raised questions about the difference between a nearly identical “80/20" guidance document, which had been in place during the Obama administration, and the final rule codifying that guidance.

Arguing on behalf of the restaurant groups, Paul DeCamp of Epstein Becker & Green PC said the rulemaking included a new limitation, which requires employers to pay the full minimum wage to tip-earning workers if they are doing non-tip earning work for more than 30 minutes straight.

DeCamp noted that the regulation has never explicitly included a recordkeeping requirement, but if employers don’t keep records of when employees are doing side work, as opposed to tip-earning work, they leave themselves “exposed to massive litigation.”

“This regulation really forces employers to maintain these records, not because of a recordkeeping violation, because they’d get slaughtered in litigation if they don’t have records,” DeCamp said. “So it forces employers to change their practices significantly.”


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