9th Circuit Reinstates Tipped Employees' Class Action Suit Against Employers

Published: Wednesday, September 19, 2018 - 4:36pm

The 9th U.S. Circuit Court of Appeals has given employees who earn tips another chance to sue their employers over wages.

Last year, the 9th Circuit quashed a class-action suit by 14 employees claiming six Valley employers were abusing Arizona's "Tip Credit" law and underpaying them while they performed non-tip duties such as cleaning, food prepping and stocking supplies.

The divided three-judge panel originally ruled that tracking non-tip wages is too burdensome for employers.

However, on Tuesday, with a larger bench of 11 justices, the same court voted to reinstate the case.

One judge wrote that employers' misuse of the credit "effectively makes tips - intended as gifts to servers - payments to employers instead."

The landmark case heads to the Supreme Court if the two sides cannot settle.

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