The Department of Labor (DOL) announced a tip regulations final rule delaying portions of a December 2020 tip rule. Subsequently, parts of the previous 2020 tip final rule will not go into effect until December 31st, 2021. The remainder of the 2020 final rule became effective April 30th, 2021. The DOL also recently released the top ten Occupational Safety and Health Administration violations for the past fiscal year.
Background of Final Rule
Previously, on March 23rd, 2021, the DOL announced two Notices of Proposed Rulemaking related to tipped workers. That announcement came as the effective date approached for the “Tip Regulations Under the Fair Labor Standards Act” final rule. The tip regulations final rule, published on December 30th, 2020, contained an original effective date of March 1st, 2021. On January 20th, 2021, the DOL proposed to delay the final rule and solicited public comments for opinions. As a result, on February 26, after reviewing the comments, the DOL delayed the effective date until April 30th, 2021.
Portions of 2020 Tip Final Rule Now in Effect
Above, the blog mentioned that only a portion of the 2020 Tip final rule has gone into effect. As of April 30th, 2021, the following now applies:
- A prohibition on employers, including supervisors and managers, keeping tips from workers. Most importantly, regardless of whether the employer takes a credit toward obligations to pay workers minimum wage.
- Recordkeeping requirements for employers who do not take a tip credit to include non-tipped workers. For example, this includes cooks and dishwashers in nontraditional tip-sharing arrangements.
- An employer that collects tips for tip pools must distribute the money in full. The disbursement must happen no later than the regular payday for the period when workers collected the tips.
Employer Takeaways
According to the DOL, the department needs the eight-month effective date extension included in the tip regulations final rule. The delay allows the department time to address additional law, policy, and fact questions. Likewise, the DOL can complete separate rulemaking related to the assessment of civil money penalties. Affected employers should pay attention to the new tip regulations final rule and anything else released soon. The DOL has made tipped workers’ protection a top priority, and employers could face heavy penalties for non-compliance.