The U.S. Department of Labor (DOL) continues to devote substantial resources to investigating certain low-wage industries each year. Among those regularly targeted are fast-food establishments and other restaurants, grocery stores, and construction companies. The Wage and Hour Division (WHD) conducted 5,751 investigations of food-service establishments during fiscal year 2018, resulting in more than 41,000 employees being paid almost $43 million in back wages. A large part of the back wages resulted from improper use of tip credit provisions. While this article will address only the requirements of the Fair Labor Standards Act (FLSA), you should be aware that several states don’t allow tip credits. Almost half of the states have their own tip credit regulations that are more stringent than the FLSA.
