KingSpry DOL Proposes Regulations for Tipped Employees

DOL Proposes Regulations That May Give More Freedom for Businesses with Tipped Employees

Photo of attorney Keely J. Collins

Posted on December 4th, 2017
by Keely J. Collins

The United States Department of Labor (“DOL”) today announced a Notice of Proposed Rulemaking that gives employers, such as casinos, restaurants, and pubs, more discretion in rewarding the hard work of their “behind the scenes” employees who do not normally receive tips.

Giving employers freedom to connect merit and pay for more employees may have the effect of helping to drive business growth and sustainability.

As the regulations currently stand, tipped employees include servers, bellhops, counter personnel (who serve customers) bussers, and bartenders.  Tips are considered the property of the tipped employee, except for in situations of legally valid tip pools. A valid tip pool, under the current regulations, allows for the sharing of tips, except that dishwashers, cooks, chefs, and janitors are prohibited from joining in on the tip pool.  These restrictions restrict pooled tipping for both employers who take the tip credit and those who pay full minimum wage and do not take the tip credit.

The proposed rule would not require any change to employers’ pay practices. There would be no change at all for employers who take the tip credit. Even under the proposed rule, employers who take the tip credit may not include “behind the scenes” employees in the tip pool.  For employers who pay full minimum wage and do not take the tip credit, tips received by workers may be collected and pooled among traditionally tipped employees and those who serve customers and clients in the “back of the house.”

At this time, the proposed rule has been released for comment by anyone from the public. Anyone who is interested may obtain a copy of the rule and/or comment at www.regulations.gov.

As always, we will keep you informed.

 

 

 

The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice GroupJeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.