Advance Notice: Briefs

Nessel, AGs end lawsuit after Labor Dept. drops rule limiting service worker wages

By: - November 19, 2021 7:14 am

John Partipilo for the Tennessee Lookout

Michigan Attorney General Dana Nessel, alongside eight other attorneys general, on Thursday dropped a lawsuit challenging a Trump-era U.S. Department of Labor rule for service workers. 

The group of attorneys general had originally presented a legal challenge to a proposal that would have removed the “80/20” rule that ensured tipped workers are spending 80% of their time on the job doing work activities that could generate tips. The Department of Labor rule would have decreased the amount tipped workers across the country earned by erasing the limit on the amount of non-tipped work they can do during a shift. 

The current federal minimum wage for tipped workers is $2.13 an hour. In Michigan, tipped workers earn $3.67 an hour. 

In a press release, Nessel praised the department for changing the rule, saying it would have otherwise had harmful effects on service workers throughout Michigan and the nation. 

“As it stood, this rule would have negatively impacted hundreds of thousands of service workers in Michigan,” Nessel said. “I commend the Department of Labor for correcting this harmful rule and as a result, protecting workers nationwide.” 

Nessel worked alongside attorneys generals from Delaware; Washington D.C; Illinois; Maryland; Massachusetts; New Jersey; Pennsylvania; and New York to fight to reinstate the 80/20 rule. The coalition argued that the rule contradicted the Fair Labor Standards Act, which institutes federal standards for minimum wage, overtime pay and other workplace protections. The law also enables employers to receive a credit away from their minimum wage requirements if a worker can earn tips. 

The new rule released by the Department of Labor now adds 30 more minutes of non-tipped work and gives clearer definition to what qualifies as tipped work, non-tipped work and work that could support tipped work. 

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Julia Forrest
Julia Forrest

Julia Forrest is a contributor to the Michigan Advance. She has been covering Michigan and national politics for two years at the Michigan Daily and OpenSecrets. She studies public policy at the University of Michigan.