New Tip Regulation Underway
November 25, 2019
The Department of Labor (DOL) has proposed a rule that would implement changes to the tip credit under the Fair Labor Standards Act (FLSA).
The FLSA requires covered employers to pay employees at least the federal minimum wage, which is currently $7.25 per hour. Employers are allowed to count a limited amount of the tips its “tipped employees” receives toward the minimum wage obligation as a tip credit.
Changes include, but aren’t limited to the following:
- Prohibit employers, managers and supervisors from keeping tips received by employees.
- Allow employers who don’t take the tip credit to establish a tip pool to share between workers who receive tips and are paid the full minimum wage.
- Add a civil penalty of up to $1,000 for employers that unlawfully keep tips.
Comments are due on this proposal by Dec. 9, 2019. For more information on the proposed regulation and how you can submit comments, visit the DOL’s website.