Hey Compliance Warriors,
The U.S. Department of Labor today announced two Notices of Proposed Rulemaking related to tipped workers as the effective date approaches for the “Tip Regulations Under the Fair Labor Standards Act” final rule, published in December 2020.
On Feb. 26, 2021, the Department issued a rule to delay the effective date of the 2020 final rule until April 30, 2021, to provide additional time to consider issues of law, policy and fact.
After considerable review, several portions of the 2020 Tip final rule implementing the 2018 Consolidated Appropriations Act will go into effect upon expiration of the first extension of the effective date, on April 30, 2021, including the definition of managers and supervisors, recordkeeping requirements and:
- A prohibition on employers keeping tips received by workers, regardless of whether the employer takes a tip credit.
- The ability of an employer that does not take a tip credit to include non-tipped workers, such as cooks and dishwashers, in nontraditional tip-sharing agreements and, by doing so, ensure their earnings.
The Department’s consideration and review of the 2020 Tips final rule led to today’s proposed rules.
The first NPRM proposes to withdraw and re-propose two portions of the rules that address the assessment of civil money penalties to better align them with the language of the Fair Labor Standards Act. The Department is also seeking comments on whether to revise the portion of the 2020 Tips final rule that addresses “managers or supervisors” to better understand those who also engage in tipped work. The Department invites public comments on this NPRM for sixty (60) days following publication of the NPRM in the Federal Register on March 25, 2021. To comment on this NPRM, visit www.regulations.gov.
The second NPRM proposes to further extend the effective date of three portions of the 2020 Tip final rule to December 31, 2021: the two portions that address the assessment of civil money penalties, and the portion of the final rule that addresses the application of the FLSA tip credit to tipped employees who perform both tipped and non-tipped duties The additional eight-month extension would provide the Department the opportunity to evaluate additional information about the questions of law, policy, and fact raised by these portions of the 2020 Tips final rule. The Department invites public comments on this NPRM for twenty (20) days following publication of the NPRM in the Federal Register on March 25, 2021. To comment on this NPRM, visit www.regulations.gov.
More information about the proposed rules is available at