US Department of Labor announces final rule delaying portions of 2020 Tip rule

WASHINGTON, DC – The U.S. Department of Labor today announced a final rule delaying portions of the 2020 Tip final rule until Dec. 31, 2021.

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

• 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 distribute tips fully no later than the regular payday for the workweek or pay period in which the establishment collected the tips.

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 Fair Labor Standards Act’s tip credit provision to tipped employees who also perform non-tipped work.

“Tipped workers are among those hardest hit amid the pandemic, making these essential frontline workers a priority for the Wage and Hour Division,” said Wage and Hour Division Deputy Administrator Jessica Looman. “The final rule announced today ensures that we have time to consider – fully and thoughtfully – all of the circumstances in today’s rapidly changing workplace, while allowing several portions of the 2020 rule beneficial to essential workers to take effect. Those workers deserve our careful and thoughtful consideration as we craft and implement rules that affect their well-being.”

For more information on protections for tipped workers and others under the FLSA, or learn more about the Wage and Hour Division, visit www.dol.gov/agencies/whd. You may also call toll-free 1-866-4US-WAGE to speak directly and confidentially to a trained Wage and Hour Division professional. The division protects workers regardless of immigration status, and can communicate with workers in more than 200 languages.