Small Businesses Challenge DOL Tip Rule Regulation in New Brief

November 3, 2023

Small Businesses Challenge DOL Tip Rule Regulation in New Brief

WASHINGTON, D.C. (Nov. 3, 2023) – NFIB filed an amicus brief in the case Restaurant Law Center et al. v. United States Department of Labor at the U.S. Court of Appeals for the Fifth Circuit. The case concerns the Department of Labor’s (DOL) tip credit rule and the Fair Labor Standards Act. “The DOL’s final rule disproportionately impacts small businesses and restaurants,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Requiring small business owners to split a job into sub-tasks and record the minutes and seconds devoted to each task will lead to confusion and difficulty in complying. Ultimately, the 80/20 rule will result in a decrease in higher-paying jobs for tipped employees in the hospitality industry. We ask the Court to reverse the district court’s decision.” The brief argues four main points: 1) the FLSA ensures employees receive the minimum wage, and industry data shows tipped employees receive tips that far exceed minimum wage, 2) compliance with the final rule is practically impossible, 3) consideration of a 15-minute portion of a shift further highlights the significant compliance issues raised by the 80/20 Rule, and 4) the final rule fails to provide guidance for the ever-evolving nature of the hospitality industry in a post-pandemic world. NFIB filed the amicus brief with the National Retail Federation, American Hotel and Lodging Association, and American Gaming Organization. The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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