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Seventh Circuit Upholds Tip Credit Pay for Related, Non-Tipped Duties

As those in the restaurant industry know well, federal and state law allow employers to pay tipped employees less than the required minimum wage with the expectation they will receive enough tips to make up the difference. This is referred to as a "tip credit." There has long been a battle within wage and hour suits over whether and when an employee paid under the tip-credit can still be paid the below minimum wage rate while performing "side-work" or non-serving duties that do not directly result in tips from customers. In a decision issued on July 15, 2016, the Seventh Circuit helped clarify the line, finding that an employer did not violate wage laws by paying its servers under the tip credit for side work those servers performed. More ›

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