Field Assistance Bulletins

*Effective April 9, 2021, WHD has rescinded FAB 2020-2 and has provided updated guidance to Wage and Hour Division (WHD) field staff regarding the practice of seeking liquidated damages in settlements in lieu of litigation (liquidated damages). See FAB 2021-2

*WHD is withdrawing FAB 2019-2 because it has been superseded by and is inconsistent with the Department’s recent Dual Jobs final rule. (See 86 FR 23446). WHD issued FAB 2019-2 to provide guidance on the extent to which an employer can continue to take a tip credit for an employee who performs tipped and non-tipped duties (i.e., dual jobs). In particular, the FAB explained that WHD would follow its November 8, 2018, Opinion Letter on this issue, WHD FLSA2018-27. In December 2020, WHD issued a final rule that would have largely codified the guidance in FAB2019-2 and WHD Opinion Letter FLSA2018-27 into its regulations. However, before the 2020 Tip final rule went into effect, the Department delayed the effective date of the dual jobs portion of the 2020 Tip final rule (See 86 FR 22597). On October 28, 2021, the Department published its Dual Jobs final rule, which withdraws and modifies the dual jobs portion of the 2020 Tip final rule. The Dual Jobs final rule sets reasonable limits on the amount of time tipped employees can spend in non-tipped activities when the employer claims a tip credit. The rule clarifies that an employer may only take a tip credit for the hours when an employee is doing work that is tip-producing or engaged in tasks that directly support tip-producing work, provided the directly supported work is not performed for a substantial amount of time. Accordingly, the requirements of FAB 2019-2 are no longer in effect. The Department is also withdrawing Opinion Letter FLSA2018-27.

*WHD is withdrawing FAB 2018-3 because it has been superseded by regulations issued by the Department in 2020 and 2021. WHD issued FAB 2018-3 on April 6, 2018 to provide interim guidance on the March 2018 Consolidated Appropriations Act (CAA) amendments to the FLSA. Among other changes, the CAA amendments added section 3(m)(B) to the FLSA, which prohibits employers, managers, and supervisors from keeping employees’ tips, regardless of whether they take a tip credit, and authorized WHD to assess Civil Money Penalties (CMPs) when employers unlawfully keep tips. Although the CAA did not limit assessment of CMPs for keeping tips to only repeated or willful violations, the FAB stated that WHD would “follow its normal procedures” in assessing CMPs for unlawfully keeping tips, including by determining whether the violation is repeated or willful.” The FAB also stated that managers and supervisors would be prohibited from “participating in tip pools.” FAB 2018-3 noted that WHD intended to issue regulations regarding the CAA amendments in the near future. In December 2020, WHD promulgated a final rule (2020 Tip final rule) addressing the CAA amendments (see 85 FR 86756). The 2020 Tip final rule made numerous revisions to the Department’s regulations, including new tip pooling regulations for employers that do not take a tip credit, a definition of “manager or supervisors” prohibited from keeping tips, and provisions related to the assessment of CMPs for unlawfully keeping tips. Subsequently, the Department announced the publication of the CMP final rule on September 23, 2021. (see 86 FR 52973). This rule withdrew and modified the portion of the 2020 Tip final rule related to the assessment of CMPs for unlawfully keeping tips. See 86 FR 52973. The CMP final rule adopts language upholding the Department’s statutorily-granted discretion with regard to section 3(m)(2)(B) CMPs and aligns the Department’s regulations with the FLSA’s statutory text. The CMP final rule also modifies regulatory provisions adopted in the 2020 Tip final rule addressing managers and supervisors, clarifying that while managers or supervisors may not receive tips from mandatory tip pools, managers and supervisors are not prohibited from contributing tips to eligible employees in such pools. The CMP final rule went into effect on November 23, 2021. All the other provisions of the 2020 Tip final rule addressing the CAA amendments, including the provision defining a “manager or supervisor” prohibited from keeping tips and the tip pooling provisions, went into effect on April 30, 2021. Accordingly, the requirements of FAB 2018-3 are no longer in effect.