On Dec. 30, DoL issued a final rule to amend regulations for tipping.
DoL amended tip regulations to address 2018 fair labor standards act (FLSA) changes.
Codified guidance on tip credit for employees who perform tipped, non-tipped duties.
Tip Regulations Background
In 2018, consolidated appropriations act (CAA) amended S.3(m) of FLSA, 29 USC 203.
FLSA was amended to prohibit employers from keeping tips received by employees.
Tips prohibited to be kept regardless of whether the employers received a tip credit.
In order to address these amendments, DoL issued final rule to amend tip regulations.
Tip Regulation Revisions
Three substantive changes made to DoL regulations related to tips, under 29 CFR 531.
First, added statutory language, applicable whether or not employer takes a tip credit,
Incorporated recordkeeping requirement administer new rule language in 29 CFR 516.
Second, removed portions that prohibited certain employers from including employees who do not customarily, regularly receive tips in mandatory tip pooling arrangements.
Applicable to those that pay their tipped employees a direct cash wage of at least full federal minimum wage, do not take tip credit against their minimum wage obligations.
Third, amended to reflect recent guidance that an employer may take a tip credit for time spent performing related, non-tipped duties contemporaneously with tipped duty.
Or for a reasonable time immediately before or after performing the tipped duties.
Amended rules to address payment of tipped employees under EO 13658, establishing minimum wage for contractors, to reflect tipped employee rescissions, in 29 CFR 10.
Consultation
Final rule to amend tipping regulations becomes effective on the date of Mar. 1, 2021.
Feb. 5, 2021 DoL Effective Date Delay
On Feb. 5, 2021, DoLpublished proposed delay of effective date until Apr. 30, 2021.
Comments in response to proposed delay, from Mar. 1, 2021, are due Feb. 17, 2021.
Feb. 26, 2021 Fed Register Delay Notice
On Feb. 26, 2021, DoL issued Apr. 30, 2021 effective date, delayed, in federal register.
Mar. 2021 Fed Reg Effective Date Delay
On Mar. 25, 2021, DoL extended effective date for 2020 Tip final rule, in fed register.
Amendments to 29 CFR 10.28(b)(2), 531.56(e), 578.1, 578.3, 578.4, 579.1, 579.2, 580.2, 580.3, 580.12, and 580.18, proposed to be further delayed until Dec. 31, 2021.
Comments on proposed extension of effective date due on or before Apr. 14, 2021.
Mar. 2021 NPRM, Request for Comments
On Mar. 25, 2021, DoL issued notice of proposed rulemaking, in federal register.
Proposed withdraw and re-propose part of final rule incorporating CAA new provisions authorizing assessment of CMPs for violations of section 3(m)(2)(B) of the Act.
Also, withdraw and re-propose part of CMP regulations addressing willful violations.
Seeks comment whether revise final rule on statutory term managers or supervisors.
Asked questions how to improve recordkeeping requirements in the 2020 Tip final rule.
Proposed withdraw parts of final rule from Dec. 30, 2020; comments by May 24, 2021.
Mar. 29, 2021 DoL Revised Collection
On Mar. 29, 2021, DoL published notice of OMB approval of information collection request (ICR) titled records to be kept by employers - FLSA, related to tip regulations.
OMB approval of revised ICR effective immediately with expiration of Nov. 30, 2022.
Apr. 2021 Fed Reg Effective Date Delay
On Apr. 29, 2021, DoL finalized extension of effective date for three parts of Tip rule.
This further delay applies to the two portions of the rule that were withdrawn and re-proposed on Mar. 25, 2021, relating to CAA new provisions and willful violations.
DoL also intends to conduct another rulemaking to revise the portion of the Tip rule on FLSA's tip credit provision to tipped employees who perform tipped, non-tipped duties.
Effective date for three portions of final rule subject to rulemaking, are further delayed until Dec. 31, 2021; all remaining portions of Tip final rule are effective Apr. 30, 2021.
Jun. 2021 Fed Reg Partial Withdrawal
On Jun. 23, 2021, DoL proposed to withdraw and re-propose one portion of Tip Regulations Under Fair Labor Standards Act (2020 Tip final rule) in federal register.
Proposed to amend regulations to clarify that employer may only take tip credit when its tipped employees perform work that is part of the employee's tipped occupation.
Work part of tipped occupation includes work that produces tips, work directly support tip-producing work, if directly supporting work not for substantial amount of time.
Comments on proposal to withdraw and re-propose one portion due Aug. 23, 2021.
Sep. 2021 Fed Reg Final Rule
On Sep. 24, 2021, DoL withdrew 2 portions of the rule related to civil money penalties (CMPs) and finalized proposed changes to the 2020 Tip final rule in federal register.
NPRM proposed changes have been adopted incorporating the CAA's new provisions authorizing the assessment of CMPs for violations and regulations on willful violations.
Modified provisions addressing managers and supervisors who perform tipped work.
Managers and supervisors may not receive tips from tip-sharing arrangements, but they are not prohibited from contributing tips to eligible employees in arrangements.
The provisions in the 2020 Tip final rule will become effective on Nov. 23, 2021.
Oct. 2021 Partial Withdrawal Finalized
On Oct. 29, 2021, DoL finalized Jun. 23, 2021, proposed withdrawal of one portion of TIP final rule, re determination of when a tipped employee is employed in dual jobs.
Effective Dec. 28, 2021, the Department is withdrawing the revision of 29 CFR 531.56(e) (in amendatory instruction 11), initially published on Dec. 30, 2020.
Nov. 2021 State AG Lawsuit Resolved
On Nov. 16, 2021, MA AG praised the DoL on the new tip regulation, which ended a lawsuit filed by nine attorney generals to overturn the Trump administration rule.
In Jan. 2021, MA AG joined a coalition of AGs in legally challenging the Trump-era rule.
The effort was co-led by the AGs of Pennsylvania and Illinois along with the AG's from Delaware, the District of Columbia, Maryland, Michigan, New Jersey, and New York.
Dec. 13, 2021 Information Collection
On Dec. 13, 2021, DoL Wage and Hour Division (WHD) published notice of approved information collection request (ICR) titled records, employers-fair labor standards act.
Approved in conjunction with a final rule titled, increasing the minimum wage for federal contractors,” published in the federal Register on Nov. 24, 2021.
The information collection was revised and renewed through Nov. 30, 2024.
Dec. 20, 2021 Fed Reg Technical Correction
On Dec. 20, 2021, DoL issued final correction, in federal register; revised DATES section of final rule published Oct. 29, 2021 to make a technical correction.
Correction clarified that in addition to 29 CFR 531.56(e) the Department is also withdrawing the revisions to 29 CFR 10.28(b)(2) that published on Dec. 30, 2020.
