With the government’s final rules on the tips provisions of federal wage and hour law becoming effective just weeks ago, employers will be challenged with ensuring they have a plan to address the rules’ impact on their operations – and that your policies and practices on tips, tip pooling, and tip reporting are compliant with the new rules. The first rule issued by the U.S. Department of Labor (DOL), effective November 23, 2021, expanded the agency’s authority to assess penalties against employers who violate the tip provisions of the Fair Labor Standards Act (FLSA). It also clarified when managers and supervisors may receive and retain tips. The second rule, effective December 28, 2021, reinstated – and worsened – the notorious “80/20” Rule, amended the FLSA’s tip provisions regarding when restaurants with tipped employees may take a tip credit, and modified the definition of work that is considered part of a tipped occupation. What do employers need to know – and what are the ten most important action steps you should take to make sure your tip credit ticking time bomb doesn’t detonate?
5 Most Significant Changes to Come from Rule Updates
If you are not familiar with the two new rules that went into effect near the end of 2021, you can read our detailed Insights here and here. However, taking a big step back, there are five significant revisions that you need to account for given the rule updates.
The FLSA allows DOL...
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