On Dec. 30, 2020, the U.S. Department of Labor (DOL) published a final rule to amend employee tip regulations under the Fair Labor Standards Act (FLSA).
On Apr. 29, 2021, the DOL published another final rule delaying the effective date of three provisions of the 2020 employee tip rule (the Rule) to Dec. 31, 2021.
Delayed Provisions
The three provisions affected by this delay relate to the assessment of civil money penalties against employers that violate federal wage and hour laws, as well as regulations that dictate the application of tip credits to employees who perform both tipped and non-tipped work.
The DOL explained that this delay will provide the agency additional time to conduct another rulemaking to potentially revise that portion of the Rule addressing the application of tip credit provisions to tipped employees who perform both tipped and non-tipped duties.
Effective Apr. 30, 2021
On Feb. 26, 2021, a “delay rule” extended the effective date of the 2020 employee tip rule until April 30, 2021. As previously scheduled, the remainder of the Rule will become effective Apr. 30, 2021, including those portions that address the keeping of tips and tip pooling, recordkeeping and other minor changes.
Request for Comment
The DOL is soliciting public comment on how to improve the Rule’s recordkeeping requirements and the provision that bans managers and supervisors from keeping employees’ tips.
Important Dates
Dec. 30, 2020
The DOL published its final rule on employee tips. The effective date was initially set for March 1, 2021.
April 30, 2021
The effective date of the final rule was extended to April 30, 2021.
Dec. 31, 2021
New effective date for three provisions of the final rule that relate to money penalties. (All remaining portions of the rule will go into effect on April 30, 2021.)
This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2021 Zywave, Inc. All rights reserved.