Tipped Worker Downtime Wage Rule Vacated by Fifth Circuit (1)

The US Court of Appeals for the Fifth Circuit has vacated a Labor Department rule requiring employers to pay tipped workers full wages for their downtime, nearly three years after it went into effect.

The decision from the three-judge panel is a win for the Restaurant Law Center and Texas Restaurant Association, who argued the rule would destroy their members’ profit margins.

“The Final Rule fails under the Administrative Procedure Act twice over,” Circuit Judge Jennifer Walker Elrod wrote for the appeals court in the Friday judgment. “Because the Final Rule is contrary to the Fair Labor Standards Act’s ...