The Federal Labor Standards Act (FLSA), originally passed in 1938 and frequently updated since, defines a tipped employee as one who earns $30 a month or more in tips. For workers without state, county or city laws restricting the practice, workers under FLSA can receive a reduction in hourly pay that is covered by tips received.  Improper use of tip credit for employees is a common wage and hour dispute, and lawsuits are common when employers improperly use tip credits to reduce wages.  Here, we explore the latest rules from the Department of Labor, and common errors employers make when attempting to reduce employee owed wages with these credits.  FLSA Tip Credit  FLSA establishes the rules for how employers may use a tip credit to meet the federal minimum wage requirement. The tip credit provision allows employers of tipped employees to count part of their employees’ tips toward satisfying their minimum wage obligation. Employers can claim a credit as long as the employee’s tips make up the difference to meet the federal minimum wage of $7.25 per hour.   Under this rule, employers may pay tipped employees a base wage of $2.13 per hour and claim a tip credit of up to $5.12 per hour to cover the remainder of the minimum wage requirement. If an employee’s total earnings (tips + hourly wage) do not meet the federal minimum wage, the employer is legally obligated to compensate for the shortfall. Employees cannot earn below the minimum wage, for all time work.  […]

Schneider Wallace Cottrell Kim LLP is pleased to announce the opening of its Washington, D.C. office.  Schneider Wallace Cottrell Kim is a nationwide plaintiffs’ law firm founded in 1993, with offices in Northern California, Southern California, Texas, and Puerto Rico.  The firm represents both individuals and institutional clients such as health insurers and municipalities in complex civil litigation.  Schneider Wallace handles cases throughout the country, with a nationwide reach.  The firm’s Washington, D.C. office will further support our clients and cases in the nation’s capital and on the East Coast. 

April 21, 2025 — A California jury has awarded $2.36 million to a class of consumers in a false advertising lawsuit against Bigelow Tea, finding that the company misled buyers by labeling its products “Manufactured in the USA 100%” despite using imported ingredients and packaging.

ATTENTION: If you are a person with a mobility disability who uses a wheelchair, scooter, or other aid for mobility, and you use or would like to use the parks and recreation facilities operated by the City of Los Angeles, please read the following about a class action lawsuit that may affect your rights.