US Circuit Court of Appeals rules on tip-sharing among workers

Waiters and other tipped employees can be required to share their tips with one another, but not with supervisors or other non-tipped employees, a federal appeals court ruled Tuesday, upholding Obama administration regulations.

In a 2-1 decision, the Ninth U.S. Court of Appeals in San Francisco overruled federal judges in Oregon and Nevada who had struck down regulations the U.S. Department of Labor enacted in 2011.

In 2009, a state appeals court ruled that a restaurant could order its waiters and waitresses to share their tips with “all employees who contribute to the service of that patron,” including dishwashers, cooks and other kitchen staff, and those who bus tables.

Joshua Buck, a lawyer for Nevada casino dealers in Tuesday’s case, said the regulations were meant to stop casino executives from scooping up dealers’ tips and using them to defray their costs of paying management employees.

In 2010, a year before the new regulations, the appeals court had ruled that federal labor law allowed employers to require tipped workers to share their tips with non-tipped employees, as long as employers didn’t deduct the tips from the minimum wage.