Punching In: Progress in Tipped Wage Rule Litigation Possible

Monday morning musings for workplace watchers.

Tipped Wage Litigation|OSHA Expands Outreach

Rebecca Rainey: There could be an update this week on whether a court is willing to suspend enforcement of a Biden administration rule requiring tipped workers be paid the full minimum wage when they aren’t doing tip-earning duties. A conference is scheduled June 27 in a lawsuit brought by two restaurant industry groups who are requesting that the US District Court for the Western District of Texas block the tipped wage rule while their legal challenge against the regulation plays out.

The rule at issue requires employers to pay the full federal minimum wage of $7.25 an hour to tipped workers who earn the $2.13 hourly subminimum wage if they perform non-tipped work for at least 20% of their hours a week, or for more than 30 minutes straight. Workers in many states already have seen their wages increase, however, as those state legislatures have raised hourly minimum wages and tipped wages above federal minimum rates.

The tipping rule has been in effect since December 2021, but the Restaurant Law Center and Texas Restaurant Association said its requirements create devastating compliance costs for employers, and that Congress never explicitly authorized the US Labor Department to issue such a rule.

Initially, Judge Robert Pitman ruled in February 2022 that the business costs from implementing the measure wouldn’t amount to enough harm to warrant an injunction to halt enforcement, given that the rule had already been in effect for weeks. But, more than a year later, the US Court of Appeals for the Fifth Circuit disagreed, and in April sent the case back to the lower court.

While the order announcing the conference this week didn’t indicate what the subject of the meeting could be, Pitman hasn’t yet responded to the appeals court’s reversal or ruled on the merits at the heart of the restaurant groups’ challenge.

Citing the precedent set in the US Supreme Court’s ruling last year in West Virginia v. EPA, the restaurant groups’ argued in their latest June 2 filing that the rule should be set aside because it’s “an unauthorized detour off the regulatory path that Congress set for the Department.”

But the Biden administration has argued in response that it’s regulated tipped work for decades, and that the groups’ have overstated how much it would cost to comply with the rule.

“Part of the Department of Labor’s core mission is to promote the welfare of wage earners and assure work-related benefits and rights. And it has been doing so for a long time,” attorneys for the DOL wrote in their reply June 13.

The telephone conference is scheduled on Tuesday at 9:10 AM Central.

READ MORE:

• Tipped Workers Will Earn More for Side Work Under New Final Rule
• Restaurants Win Fifth Circuit Appeal in Bid to Block Tip Rule
• Labor Department Challenges Test Limits of West Virginia v. EPA

Litigation over a tipped wage rule continues with a hearing conference scheduled at federal district court in Texas this week.

ANDREW CABALLERO-REYNOLDS/AFP via Getty Images

Bruce Rolfsen: The US Occupational Safety and Health Administration is in listening mode.

The agency has historically held public meetings to hear the pros and cons of proposed rules (anyone else remember the agency’s three-week hearing on silica exposure rules in March 2014?)

But this year, OSHA has been hosting meetings that aren’t directly connected to enforcement or proposed rules, and instead has been asking for opinions about how the agency can promote employers to have “value-driven leadership,” a “positive workplace safety culture” and accept “safety as a core value.”

The idea is that OSHA, beyond its enforcement duties, could be a clearing house for best safety and health practices, like efforts by the National Safety Council and health and safety professional organizations.

At the close of a June 15 in-person gathering at the US Department of Labor headquarters to discuss safety programs, OSHA administrator Doug Parker told employer and labor representatives that the meeting was “the beginning of an engagement, not something where we’re going to take notes on and issue a report and put it on a shelf.”

The agency has been taking a similar approach to its work on changes to its Voluntary Protection Programs. The programs encourage employers and their workers to initiate safety and health efforts. If the employer has an injury and illness rate lower than its industry average, the workplace may be exempted from some OSHA inspections.

The agency hosted a June 16 listening session and accepted written comments to discuss a wide-range of possible revisions to the program. Potential options included aligning qualification for the program with non-government consensus standards for safety and health programs, allowing third-party auditors to review whether employers meet program requirements, and using leading indicators to determine a program’s effectiveness.

But this softer approach to convincing employers to improve workplace safety has attracted critics, who argue there’s still a vital need for the agency to focus on workers in unsafe environments.

In a written comment to the agency about Voluntary Protection Programs, former OSHA administrator David Michaels and assistant administrator Jordan Barab questioned whether OSHA’s resources would be “better dedicated to enforcement and compliance assistance activities focused on vulnerable workers at low road companies that are cutting corners and killing their employees?”

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.