Department of Labor Opines that Sushi Chefs may Participate in Tip-Pooling Arrangements

In recent years, employees in the restaurant industry have sued employers for wage and hour violations under the federal Fair Labor Standards Act and New York’s Labor Law, alleging that they were required to share their tips with managers and others, who do not customarily receive tips directly from customers. Although the FLSA and New York’s Minimum Wage Order for the Restaurant Industry permit tip pooling, employers are not permitted to include participants in the pool, who are not of the type expected to receive tips.

Thus, chefs and cooks are not permitted to participate in tip pools, while food servers can be part of such pools because they customarily receive tips and gratuities in the course of their work.
Recently, however, the United States Department of Labor was asked to consider whether itamae-sushi chefs and teppanyaki chefs could lawfully participate in a tip pool. The Department of Labor concluded that such chefs could, in fact, participate in a tip pool, based upon the fact that they have direct contact and interact with customers.
The Department of Labor’s opinion letter compared itamae-sushi and teppanyaki chefs with counter persons, who have been considered to be entitled to participate in tip pools. Consequently, because of the chef’s direct contact and interaction with customers, employers who include them in tip pooling arrangements do not violate the Fair Labor Standards Act.

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