Do you have Tipped Employees? The Rules May Be Changing

On Monday, October 7, 2019, the U.S. Department of Labor (DOL) issued a proposed rule to change the regulations regarding tips. The proposed rule would implement provisions of the Consolidated Appropriations Act of 2018 (CAA) and codifies existing Wage and Hour Division guidance.

The proposed rule seeks to allow employers to share tips between workers who receive them, such as waiters, and employees that do not traditionally receive tips, such as dishwashers and cooks. The DOL has also released a fact sheet noting the key provisions of the proposed rule.

Following the DOL’s current guidance, the rule allows an employer to take a tip credit for the time an employee in a tipped occupation performs related duties that are not tipped. Be aware that to use the tip credit, the employee must perform non-tipped duties at the same time or within a reasonable time before or after he tipped duties. The proposed regulation helpfully lists which non-tipped duties are related to tipped duties.

This notice is available for review and public comment for 60 days (until December 7, 2019). As always, the DOL encourages interested parties to submit their comments on the proposed rule.