I know a guy.
(Ok, I got a press release.)
In December, I blogged here about how the U.S. Department of Labor planned to update the rules for tipped employees under the Fair Labor Standards Act.
(By the way, if you don’t have tipped employees, you can skip this post. Or play Tetris.)
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If you have tipped employees, you know that the DOL proposed the following rule changes back in December:
- Employers can’t keep employee tips — ever! (more of a clarification than anything else)
- An employer that does not take a tip credit can require employees that traditionally receive tips to share them with other non-managerial employees that traditionally don’t receive tips
- Tips collected in a tip pool must be shared no less often than when the employer pays wages
- Updated civil money penalty guidance consistent with recent court rulings
- New recordkeeping requirements for employers that do not take a tip credit but collect employees’ tips to operate a mandatory tip pool
- No more 80/20 rule
- Alignment with payment of tipped employees under Executive Order 13658 (Establishing a Minimum Wage for Contractors)
These new rules would have taken effect in 2021 were it not for
those meddling kids a change in administration. Instead, President Biden instructed administrative agencies, like the DOL, to delay any proposed rules and carefully consider the next steps.
Translation: The “Biden DOL” would either file the pending tip-rule changes from the “Trump DOL” in File 13, or the Biden DOL would salvage the employee-friendly portions of the proposed rule and scrap most or all of the rest.
Let’s see what happened here, shall we?
The Biden DOL salvaged the proposed tip rule’s employee-friendly portions and scrapped most or all of the rest.
From the DOL’s press release:
After considerable review, the department will allow several portions of the 2020 Tip final rule implementing the 2018 Consolidated Appropriations Act to go into effect, including the following:
- A prohibition on employers, including supervisors and managers, keeping tips received by workers, regardless of whether the employer takes a tip credit. This prohibition establishes significant protections for tipped employees.
- The ability of an employer that does not take a tip credit to include non-tipped workers, such as cooks and dishwashers, in nontraditional tip-sharing agreements and, by doing so, boost their earnings.
Good on the Biden DOL for keeping these proposals.
The DOL won’t finalize anything until the end of the year. But, don’t hold your breath for any other holdovers. It appears as though the DOL is angling for more latitude to assess civil money penalties against employers that willfully violate the FLSA. The DOL may also reinstate the 80/20 rule, among other things.
Click through to the press release to read the proposed rules for yourselves, a lot of which seeks to elicit public comment. You can comment on the proposals at www.regulations.gov.