The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2009-22. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA). Because the letter was apparently never mailed after it was signed, the DOL under new Secretary Hilda L. Solis has decided to withdraw the letter for further consideration. Therefore, this letter may not be relied upon as a statement of agency policy. It is possible that a different conclusion may be reached when the Opinion Letter is reissued.
In this Opinion Letter, the DOL confirmed its previously stated position “that where a state law requires a minimum wage less than the federal minimum wage and forbids a tip credit, the employer may nevertheless take a tip credit in the amount of the difference between state and federal law.” The Opinion Letter was specifically concerned with a Minnesota law that “purports to prohibit taking a credit for gratuities ‘towards the payment of the minimum wage set…by federal law.’”
State laws may provide rules that are more beneficial to the employee and must be followed. The DOL may come to a different conclusion when it reissues the Opinion Letter after further consideration. Contact Vision Payroll if you have questions about this Opinion Letter.