Tip Credits: Methods For Measuring Employee Work Time

By Elizabeth Arnold and Chester Hanvey (January 14, 2019, 1:11 PM EST) -- Many companies in the hospitality industry (e.g., restaurants) use "tip credits" to augment some employees' hourly rates. This practice involves crediting the tips an employee earns toward their hourly compensation, thus reducing the amount the employer contributes to meet the relevant minimum wage threshold.[1] This practice has received attention recently due to recent rulings (e.g., Alec Marsh v. J. Alexanders) and the reissuance of an opinion letter by the U.S. Department of Labor[2] regarding which activities should be categorized as "tippable" (i.e., should count as time when the employee could have received tips from customers)....

Law360 is on it, so you are, too.

A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions.


A Law360 subscription includes features such as

  • Daily newsletters
  • Expert analysis
  • Mobile app
  • Advanced search
  • Judge information
  • Real-time alerts
  • 450K+ searchable archived articles

And more!

Experience Law360 today with a free 7-day trial.

Start Free Trial

Already a subscriber? Click here to login

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!