The Texas Restaurant Association and Restaurant Law Center are suing the Biden Administration’s Tip Credit Regulation

December 7

2021

Washington DC – The Restaurant Law Center (Texas Center) and the Texas Restaurant Association (TRA) have filed a lawsuit against the Biden administration, claiming that its new “Dual Jobs” tipping regulation is in fact a new hidden law that is in direct conflict with simple language. law. In addition, allowing it to happen would seriously impair the ability of small and local restaurant owners to run their businesses. The lawsuit seeks an order that the new regulation be ordered and subsequently overturned by a court because it is arbitrary, arbitrary and contrary to the law on fair labor standards.

The Small Business Administration Office of Advocacy (SBA) has also expressed concern that the Ministry of Labor’s certification lacks an adequate factual basis. The SBA Advocacy Office called on the Department of Labor to withdraw the regulation and reconsider its cost estimates to reflect the economic impact of the rule on small entities and to consider significant regulatory alternatives.

“An administration’s attempt to misuse the regulatory process to enact Tip Credit changes would seriously hit operators who are currently focusing on labor and supply chain shortages and trying to keep their doors open after an economically devastating pandemic,” he said. Angelo I. Amador, Executive Director of the Center for Restaurant Law. “As we have said, this is an arbitrary change that only creates confusion and huge compliance problems.”

“Tasks such as preparing the restaurant for customers, replenishing supplies during meals, cleaning and closing the restaurant at the end of the day have long been an integral part of the tipping professions that commonly occur in restaurants,” he said. Emily Williams Knight, President and CEO of the Texas Restaurant Association. “Because restaurant staff often move quickly from one task to another during a shift, there is no practical way for employers to keep records of tasks after tasks that would be required by Administration regulations to avoid potential liability. Operators are exhausted after a very difficult 20-month pandemic; now is the right time to burden them with unnecessary regulations. “

“Tip credit” is the difference between what an employee earns through the hourly minimum wage on the tip received during each shift and the amount owed to employees by the restaurant owner. The Biden administration is preparing to formally withdraw the regulations on tip credits and issue new ones. The proposed regulation would be difficult for the restaurant industry to implement, as it would require restaurants to redirect existing resources to monitor and reclassify the types of tasks performed by restaurant staff. This creates additional challenges for restaurant owners and managers and is likely to increase operating costs. The regulations are due to enter into force on Friday, December 28.

Restaurant Law Center and the Texas Restaurant Association are represented by Angelo I. Amador of Restaurant Law Center and Paul DeCamp, Brian Spang, Kathleen Barrett and Greta Ravitsky of Epstein Becker & Green, PC

A copy of the complaint without exhibits can be found here.
For more information on Restaurant Law Center, visit here.
For more information on the Texas Restaurant Association, visit here.

The Texas Restaurant Association

The Texas Restaurant Association (TRA), founded in 1937, serves as a lawyer in Texas and an indispensable resource for the food industry. As a leading TRA trade association, it represents the state’s $ 70 billion restaurant industry, which consists of approximately 50,000 jobs and employs 1.3 million people. Together with the Texas Restaurant Foundation, an offshoot of TRA’s workforce, the Association proudly continues to protect, develop and educate the growing industry as TRA enters its 85th anniversary.

About Restaurant Law

The Restaurant Law Center is an independent 501 (c) (6). The center’s goal is to enforce business laws and regulations that allow restaurants to continue to grow, create jobs, and contribute to a strong U.S. economy. The center is the voice of American restaurants in the courtroom promoting the political interests of industry.

David Berry

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