Employer Claiming Tip Credit Cannot Offset Credit Card Tips With Optional Expenses: Fifth Circuit | Practical Law
In Steele v. Leasing Enterprises, Ltd., the US Court of Appeals for the Fifth Circuit held that an employer may offset employees' tips charged on credit cards to recover its costs associated with collecting those credit card tips, but that it violates the Fair Labor Standards Act (FLSA) if it offsets credit tips to recover other costs that exceed the direct fees charged by the credit card companies.