Hans Riede Provides Insight on Best Approach without Tipped Credit Rule in Law360 Article
Hans Riede, a Quarles & Brady partner and Washington, D.C., office chair of the Labor & Employment Practice Group, was included in a Law360 article about how employers have adjusted in the year since a federal court struck down the Biden administration’s tipped credit rule.
The tipped credit rule, which fell under the Fair Labor Standards Act, allowed employers to count up to $5.12 per hour toward minimum wage requirements, assuming employees earned the appropriate amount in tips. This enabled employers to pay tipped workers as little as $2.13 per hour. The rule was vacated in August 2024 by the Fifth Circuit.
Riede addressed the best approach for employers who don’t want to risk issues with the latest rules. An excerpt:
In a follow-up October order, the appellate court clarified that the U.S. Department of Labor's 1967 dual jobs rule, which sought to ensure that an employer could only take advantage of the tip credit when an employee is working in a tipped occupation, was back in effect.
Ultimately, when in doubt, the "fundamental best practice" is to pay the full minimum wage, said Hans Riede, the Washington co-managing partner for management-side firm Quarles & Brady LLP.
"It's cheaper than a wage and hour lawsuit," he said. "But again, if you use the tip credit, make sure it's strictly tied to tip duties and review all the state's rules that you're operating in before assuming the federal law gives you cover."