On December 30, 2020, the U.S. Department of Labor released a long-awaited final ruling on the pooling of tips and the payment of incidental charges by tipped employees when not tipped. The final regulation will come into force on March 1, 2021.
The final regulation was prompted by the amendment of the Consolidated Appropriation Act of 2018 ("CAA") in Section 3 (m) of the Fair Labor Standards Act ("FLSA"). Under the FLSA, employers must pay their employees the federal minimum wage. However, if an employee has a paid job, the FLSA allows employers to earn "tip credit". The loan enables employers to pay lower wages to tipped workers, as tips can be applied to the employer's minimum wage obligation.
The main provisions of the final rule are summarized below:
Permitted tip pooling practices may include "back home" workers.
Under the CAA, employers, managers and supervisors cannot withhold tips received from employees even if the employer specifies the minimum wage as the base wage and does not use the credit exemption. Tip under the FLSA.
When employing the tip credit, the employer can request that employees who earn tips share their tips. However, the group of employees who share tips only includes employees who earn tips. Therefore, employees who are generally not tipped cannot be included in the tipping group and must receive the minimum wage.
If an employer does not take the tip, the final rule is that the employer can combine employee tips with tips and include returning employees. Therefore, employees such as cooks or dishwashers can now be added to a tip pool if an employer does not choose to use the "tip credit" below the minimum wage for their tip employees.
Tips for all tasks related to creating tips
The final rule codifies the above guidelines that employers may be tipped for any period of time that an employee in a paid occupation does non-tipping work, provided that such work is done simultaneously or over a reasonable period of time. before or after the tip service. The final rule identifies certain front-door duties that might be eligible, such as caring for the house. B. cleaning, setting the tables or occasionally washing dishes. Any work for which tips cannot be obtained must relate to the profession that deserves the tips, or the work can be viewed as a "duplication".
DOL has published FAQs and a press release on the final rule. If you have any questions about the final rule or how to ensure compliance, please contact your Miller Canfield attorney or one of the authors of this warning.
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© 2020 Miller, Canfield, Paddock, and Stone PLC National Law Review, Volume XI, Number 5
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