The U.S. Department of Labor seeks to rollback Obama era restrictions on employers related to the pooling of tips under the Fair Labor Standards Act. The DOL’s Notice of Proposed Rule Making published on December 5, 2017, gave the public until January 4, 2018 to publically comment on the proposed rules. Pressured by public interest groups, the public comment period has been extended to February 5, 2018.
Under the Obama era regulations employers were prohibited from distributing tips to anyone but the employee(s) who earned those tips, if claiming a tip credit. Under the proposed rule, employers will be able to pool tips earned by servers, bartenders and other front of the house employees and redistribute to untipped employees such as cooks, dishwashers and other back of the house employees.
For more information on the proposed rule and how to submit comments, click here.