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The U.S. Department of Labor issued a final rule delaying portions of the 2020 Tip final rule until December 31, 2021.

The remainder of the 2020 Tip final rule will become effective April 30, 2021, including rules that address:

  • A prohibition on employers, including supervisors and managers, keeping tips received by workers, regardless of whether the employer takes a credit for workers’ tips toward their obligation to pay those workers minimum wage.
  • The recordkeeping requirements for an employer that does not take a tip credit to include non-tipped workers, such as cooks and dishwashers, in nontraditional tip-sharing arrangements.
  • An employer that collects tips for tip pools must fully distribute tips no later than the regular payday for the workweek or pay period in which the tips were collected.

The eight-month extension of the effective date for specific portions of the 2020 Tip rule allows the department time to address additional questions of law, policy and fact and complete separate rulemaking related to the assessment of civil money penalties, and the application of the FLSA’s tip credit provision to tipped employees who also perform non-tipped work.

Please contact Genevieve M. LeFevour, Christopher J. Carlos, or Brian C. Langs with any questions related to how this development might affect your organization.