USDOL Announces Final Rule Delaying Portions of 2020 Tip Rule to December 31, 2021

On April 28, 2021, after public comment on proposed rulemaking, the U.S. Department of Labor (USDOL) announced a Final Rule delaying portions of the 2020 Tip Rule to December 31, 2021, while making other portions effective April 30, 2021.  

The portions of the rule that became effective April 30 include:

  • A prohibition on employers keeping tips received by workers, regardless of whether the employer takes a credit for workers tips toward their obligation to pay those workers minimum wage
  • Recordkeeping requirements for an employer that does not take a tip credit to include non-tipped workers in nontraditional tip-sharing arrangements
  • Requirement for an employer that collects tips for tip pools to fully distribute tips no later than the regular payday for the pay period in which the tips were collected

During the eight-month extension, USDOL will consider additional questions of law and policy, including the application of the Fair Labor Standards Act (FLSA) tip credit provision to tipped employees who also perform non-tipped work. For more information, see the USDOL press release or refer to the Final Rule.