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