April 30th Effective Date Set for (Part of) Final Tip Credit Rule

By Alyssa L. Levy

The Department of Labor (DOL) has delayed the effective date for its Tip Regulations Under the Fair Labor Standards Act (the “Final tip rule”) until April 30, 2021, so it can have additional time for “review” before certain parts of the rule become effective. 

In the same DOL announcement of the April 30th effective date for portions of the Final tip rule, the DOL explained that other parts of the rule have been put off even longer – until (at least) December 31, 2021. Specifically, the DOL plans to withdraw and re-propose the parts of the Final tip rule addressing civil money penalties, willful violations, and the “managers or supervisors” language currently contained in the provision about employer retention of tips.  Thus, none of these provisions will be included in what goes into effect at the end of April.

The DOL’s guidance for employers who have tipped employees has been coming fast and furious over the last few months – including guidance on non-tipped employees in tip pooling (which was later withdrawn) and calculating overtime for employees in tip-credit and non-tip-credit positions. Stay tuned, because more is sure to come as the DOL adjusts to the changed wage and hour mandates from the new administration.