Applebees Inc. v. Fast

Case Updates

NCLC urged the Supreme Court to grant certiorari in order to clarify the proper standard under the Fair Labor Standards for calculating the minimum wage to be paid to employees, such as waiters and bartenders, who customarily receive tips from customers as part of their compensation. Ordinarily employers may take a “tip credit” for such employees and compensate them at a lower rate as long as each employee receives at least the minimum wage in wages and tips combined. In this class action case, current and former Applebee’s employees sued the company claiming that it violated the Fair Labor Standards Act (FLSA) by failing to pay them a non-tipping wage for time spent performing non-tipping activities, such as general preparation and maintenance work. In its amicus brief, NCLC argued that the decision below calls into question the ability of employers in the restaurant industry and other significant American business sectors to continue relying on the federal tip credit to calculate wages, as they have done for more than four decades. The result would be to impose enormous unworkable burdens and uncertainty.