Press Release

Press Release AG Healey Resolves Federal Lawsuit in Win for Tipped Workers

State AGs Sued to Stop Trump Administration Rule That Allowed Employers to Reduce Wages of Tipped Employees and Make It Harder to Earn a Living Wage
For immediate release:
11/16/2021
  • Office of Attorney General Maura Healey
  • The Attorney General's Fair Labor Division

Media Contact for AG Healey Resolves Federal Lawsuit in Win for Tipped Workers

Roxana Martinez-Gracias

BOSTONAttorney General Maura Healey today praised the U.S. Department of Labor’s (USDOL) new Tip Regulation, ending a lawsuit that was filed by nine attorneys general and ending the fight to overturn the Trump Administration’s harmful rule.

For decades, tipped workers had been protected by USDOL guidance that said they could not legally be paid the lower tipped minimum wage rate if more than 20 percent of their work time was spent doing non-tipped work. The USDOL rule enacted by the Trump Administration eliminated this guidance and allowed employers to assign non-tipped work such as preparing food, setting tables, and cleaning to tipped employees while still taking a tip credit. As such, the rule allowed employers to spread thin tips and lower servers’ average incomes. In January 2021, AG Healey joined a coalition of attorneys general in legally challenging the Trump-era rule.

“All this rule did was make it more difficult for workers to earn a living wage in the midst of an economic crisis – it was illegal and cruel for so many struggling to get by during the pandemic,” said AG Healey. “We welcome the Department of Labor’s new workplace protections and will continue to advocate for the fair treatment and protection of tipped employees.”

The Fair Labor Standards Act (FLSA) is the federal law establishing a baseline of critical workplace protections, such as minimum wage and overtime, for workers across the country. It permits employers to take a credit against their minimum wage obligations for the tips workers receive. The Trump-era rule would have eliminated a 20 percent cap on the amount of non-tipped work a tipped worker could do and still receive only the tipped minimum wage, resulting in lower pay for tipped workers nationwide. The minimum wage rate for tipped workers in Massachusetts is $5.55 per hour, as long as their tips bring their earnings up to $13.50 per hour.

As the coalition advocated, the new rule restores the 20 percent cap and imposes an additional limit of 30 consecutive minutes of non-tipped work. In addition, it provides helpful, clarifying definitions for tipped work, non-tipped work, and work that does not generate tips itself but directly supports tipped work. As a result, tipped workers can only be paid the tipped minimum wage when the vast majority of their work generates tips, helping to protect them from exploitation and wage theft. 

The fight over the Tip Regulation has gone on for more than two years in the midst of the COVID-19 pandemic – a challenging time for all businesses and workers, and especially restaurants and their employees. As vaccination rates rise and restaurants begin to recover, their obligations to tipped employees are as important as ever.  

This effort was co-led by attorneys general of Pennsylvania and Illinois and joined by AG Healey, along with the attorneys general from Delaware, the District of Columbia, Maryland, Michigan, New Jersey and New York.

A copy of the lawsuit dismissal can be found here.

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Media Contact for AG Healey Resolves Federal Lawsuit in Win for Tipped Workers

Office of Attorney General Maura Healey 

Attorney General Maura Healey is the chief lawyer and law enforcement officer of the Commonwealth of Massachusetts.

The Attorney General's Fair Labor Division 

The Attorney General’s Fair Labor Division protects workers from exploitation and sets a level playing field for employers. We enforce wage and hour, public construction, and child labor laws.

Due to the COVID-19 emergency, walk-ins to the AG’s physical office locations will not receive in-person service. Walk-ins will be encouraged to file complaints online or call our office.
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