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Legislative Update: Joint Employer and Tip Pool Rulings

When 2017 ended, so did these two labor practices, which could affect your restaurant.

By Sarah Ann Noel - January 8, 2018


As the 2017 calendar ended, so did a few labor rulings that have the potential to affect your restaurant business and employees. The National Labor Board overturned rules about tip pooling, as well as the joint employer ruling, which will help restaurant owners.

In regards to tip pooling, which the previous ruling limited to the front-of-house employees earning tips, the overturning now means that back-of-house staff can get in on the tip pool. Supporters of the overruling say that it levels the income for all staff members, creating more equality. But those opposed to the change say that it could be mismanaged, making it easy for managers to pocket tips, too, or that it will lead to higher labor costs in light of declining tip earnings for front-of-house staff. For more information, Eater did a quick write-up on the need-to-know information for restaurant owners. This ruling is only in the proposal stage and open to public comment until early February. 

Another ruling recently reversed by the Labor Board was the joint-employer ruling, which initually made it easier for unions and workers to hold larger companies accountable for its franchisees and contractors. This would include large restaurant chains, like McDonald's, for example, that have many independent franchises. The Labor Board overturned the Obama-era joint employer ruling by a vote of 3-2, now saying that a company is a joint employer only if it has direct control over the employees. For more information on the topic, here is a four-minute read on Reuters.

It can be difficult to stay on top of information political and legal information in the midst of day-to-day responsibilty, but clearly these rulings may greatly impact the way your business operates. This is one of many reasons it is important to consult with someone who understands the restaurant industry and business ownership from a broader vantage point, able to funnel large-scale information and current events into a need-to-know business plan format for your specific establishment. Contact a restaurant consultant today to make sure that you've covered your bases and that your operation is as efficient and up-to-date as can be.

Photo by j zamora on Unsplash