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 “Tipped Worker Downtime Wage Rule Vacated by Fifth Circuit,” by Rebecca Rainey. (Read the full version – subscription required.)
Following is an excerpt:
The US Court of Appeals for the Fifth Circuit has vacated a Labor Department rule requiring employers to pay tipped workers full wages for their downtime, nearly three years after it went into effect.
The decision from the three-judge panel is a win for the Restaurant Law Center and Texas Restaurant Association, who argued the rule would destroy their members’ profit margins.
“The Final Rule fails under the Administrative Procedure Act twice over,” Circuit Judge Jennifer Walker Elrod wrote for the appeals court in the Friday judgment. “Because the Final Rule is contrary to the Fair Labor Standards Act’s clear statutory text, it is not in accordance with law. And because it imposes a line-drawing regime that Congress did not countenance, it is arbitrary and capricious.” …
Guided by the new analysis established by the Supreme Court’s recent Loper Bright Enterprises ruling, the Fifth Circuit centered in on the rule’s language that clarified the tip-credit can only apply to work that is part of the “tipped occupation,” finding it inconsistent with the FLSA’s text. …
Paul DeCamp of Epstein Becker & Green PC, who represented the restaurant groups who sued over the rule, said he was pleased that a court understood the conflict between the DOL’s position and the law. He said the agency didn’t define what it means to be in an occupation or engaged in one, instead focusing on the term tipped occupation, which is not part of the FLSA.
“The department tried to regulate on a different term, that was beyond the department’s authority to regulate,” DeCamp said.
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