Fifth Circuit Strikes Down DOL Tip Credit Rule

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The Fifth Circuit Court of Appeals has struck down the U.S. Department of Labor (DOL) 2021 final rule updating tip credit regulations under the Fair Labor Standards Act (FLSA) in the case of Restaurant Law Center v. U.S. Department of Labor.

“This decision is a big deal for restaurant owners and for tipped employees," said Sean Kennedy, Executive Vice President of Public Affairs, National Restaurant Association. "For more than two and a half years, restaurant owners have worked in fear of not being in compliance with the complicated and confusing requirements of the 2021 amendments. Today’s decision will alleviate the confusion and allow operators to focus on the economic challenges that threaten their business viability.”

Epstein Becker Green’s Paul DeCamp, who represented the restaurant groups in this case, elaborated for Modern Restaurant Management (MRM) magazine:

"The Fifth Circuit’s ruling has vacated and set aside the Department of Labor’s 80/20/30 Rule.  As…