GrayRobinson Labor & Employment E-lert: The DOL Issues A New Rule Regarding Tipped Employees

By: Matthew A. Bowles, Associate

On December 22, 2020, the DOL issued its Final Rule which codifies the DOL’s guidance regarding employer tip credits for employees who perform both tipped and non-tipped duties, as well as amends the DOL’s regulations regarding tip credits to reflect the Consolidated Appropriations Act of 2018 which amended section 3(m) of the FLSA to prohibit employers from keeping tips received by their tipped employees. Significantly, the Final Rule permits an employer who pays its tipped employees minimum wage under the FLSA to implement a “nontraditional” mandatory tip pool which includes untipped employees such as cooks and/or dishwashers. Notably, an employer is still prohibited from sharing tips with managers and/or supervisors. An explanation of the DOL’s Final Rule can be found at the DOL’s website here. The Final Rule may also be found at the DOL’s website here along with the DOL’s FAQs webpage which discusses common questions regarding the Final Rule.