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AG Nessel Resolves Federal Lawsuit in Win for Tipped Workers

LANSING -Michigan Attorney General Dana Nessel joined a coalition of nine attorneys general in praising the Department of Labor's new Tip Regulation, dismissing their lawsuit and ending the fight to overturn the Trump Administration's harmful rule.  

"As it stood, this rule would have negatively impacted hundreds of thousands of service workers in Michigan," Nessel said. "I commend the Department of Labor for correcting this harmful rule and as a result, protecting workers nationwide." 

The coalition led a legal challenge to a U.S. Department of Labor (USDOL) rule that unlawfully sought to remove the limit on non-tipped work a tipped worker may complete and still receive only the tipped minimum wage, $2.13 per hour federally and $3.67 per hour in Michigan. 

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 twenty 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. 

As the coalition advocated, the new rule restores the twenty percent cap and imposes an additional limit of thirty 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 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.   

Joining Attorney General Nessel in this effort were the attorneys general from Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, New Jersey, Pennsylvania and New York. 

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