July 28, 2021 •
News
USDOL Announces Proposed Rule on Tipped Workers’ Non-Tip-Producing Work
The U.S. Department of Labor (USDOL) announced a proposed rule, “Tip Regulations Under the Fair Labor Standards Act (FLSA); Partial Withdrawal,” to revise the portion of the 2020 Tip final rule that addresses the application of the Fair Labor Standards Act (FLSA) tip credit provision to tipped employees who perform both tipped and non-tipped duties. The proposed rule clarifies that:
- When an employee is working in a tipped occupation, and when a worker has performed a substantial amount of non-tipped labor, an employer can no longer take a tip credit and must pay the full federal minimum wage to the worker.
- An employer may only take a tip credit when tipped employees perform labor that directly supports their tip-producing work, so long as the employee does not perform it for a substantial amount of time.
- A substantial amount of time is defined as exceeding 20% of all the hours worked during the employee’s workweek or exceeding 30 continuous minutes
The USDOL invites public comment on the rule through August 23, 2021, at www.regulations.gov
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