“Drip, drip, drip” is the best description of the Biden administration’s staggered attack on the 2020 Tip Final Rule through delays, withdrawals, amendments and notice of proposed rulemaking (NPRM). The latest action by the Department of Labor (DOL) came last week, when the Wage and Hour Division published its final rule addressing managers who receive tips and penalties for violations of the Fair Labor Standards Act (FLSA) (September Tip Final Rule). These regulatory amendments will be effective Nov. 23, 2021.
Managers Who Receive Tips
As expected, the September Tip Final Rule tracks the 2018 Consolidated Appropriations Act (CCA) by prohibiting managers, supervisors and employers from keeping employees’ tips, and it defines managers and supervisors in line with the executive exemption from overtime. See 29 C.F.R. § 531.52(b)(2); see also 29 C.F.R. §§ 541.100(a)(2)-(4) and 541.101 (delineating the executive exemption). Also as expected, the September Tip Final Rule allows mandatory tip pools to include employees who do not customarily and regularly receive tips if the employer pays all employees in the pool the full minimum wage and does not take a tip credit. See 29 C.F.R. § 531.54(c)(3) and (d).