• Home
    Home We Serve America's Restaurants Representing nearly 500,000 restaurant businesses, we advocate for restaurant and foodservice industry interests and provide tools and systems that help members of all sizes achieve success.
  • Foundation
    Foundation Building & Retaining Talent The NRAEF is focused on developing a stronger workforce and building the next generation of industry leaders through education, scholarships and community engagement.
  • Show 2018
    Show 2018 May 19-22, 2018 As the international foodservice marketplace, the National Restaurant Association Show provides unparalleled opportunities for buyers and sellers to come together, conduct business and learn from each other.
  • ServSafe
    ServSafe Minimize Risk. Maximize Protection. For over 40 years, ServSafe® training programs have delivered the knowledge, leadership and protection that have earned the trust and confidence of business leaders everywhere.

National Restaurant Association - NRA sues Labor Department over new tip-credit regulation

Skip to navigation Skip to content

News & Research

Email Print
News RSS

NRA sues Labor Department over new tip-credit regulation

The National Restaurant Association --- joined by the Council of State Restaurant Associations and the National Federation of Independent Business -- has filed suit against the Labor Department over the agency’s new tip-credit-notice regulation.

The DOL regulation significantly changes the notice that businesses must give tipped employees about the tip credit. The new rule took effect on May 5. The DOL gave restaurants no chance to comment on the new notice requirements -- and then gave employers only 30 days to comply.

The National Restaurant Association met with DOL officials in early May to ask them to withdraw the rule or delay it by 120 days so our industry could provide input. The agency refused.

Among other grounds, our lawsuit argues that the DOL failed to comply with the federal Administrative Procedure Act, which requires federal agencies to solicit public comment on proposed regulations.

The stakes are tremendous: If an employer does not give the required notice, then use of the tip credit is invalid; in other words, the employer cannot take the tip credit. The impact of these new administrative obligations and the potential loss of the tip credit and assessment of civil and criminal penalties portend a huge and negative economic impact on the restaurant industry. Even one small misstep by an employer can result in substantial liability.

Employers face risks not only through DOL enforcement actions but separate plaintiffs’ lawsuits.

As we pursue the lawsuit, we continue to educate our members about the new rule. We have encouraged our members to immediately make efforts to comply in good faith with the new notice requirements, and offer suggested compliance guidelines at www.restaurant.org/tips for operators to discuss with their legal counsel, including sample notices members can use to provide written notice to their tipped employees.

Stay tuned to www.restaurant.org/tips for ongoing lawsuit news and compliance information. 

Conserve RSS Healthcare RSS Conserve RSS

▲ Back to Top

We're glad you're here!®

® 2012-2017 National Restaurant Association. All rights reserved.

2055 L St. NW, Suite 700, Washington, DC 20036
(202) 331-5900 | (800) 424-5156