DOL returns to outdated definition of tipped staff – Tech Cyber Web

On December 17, 2024, the U.S. Division of Labor (DOL) rescinded its laws that tried to restrict the share of labor time and consecutive minutes tipped staff might spend on non-tip-producing work for functions of tip credit below the federal Honest Labor Requirements Act (FLSA). The DOL’s motion was in response to a call by the Fifth Circuit Court docket of Appeals. The courtroom had struck down the DOL’s 2021 laws that mentioned if a tipped employee spent greater than 20 % of their time (the “80/20 rule”) or greater than 30 consecutive minutes on duties that didn’t produce suggestions, employers couldn’t apply the FLSA tip credit score towards minimal wage necessities throughout that extra time (Restaurant Regulation Heart v. U.S. Division of Labor5^th Cir, Oct. 2024).

Suggestions (i.e., recommendation!): When you make use of tipped staff, we advocate you retain these provisions in thoughts:

Tipped worker: The FLSA defines this as “any worker engaged in an occupation during which” the worker “typically and often receives greater than $30 a month in suggestions.” Typical examples are restaurant servers and supply drivers.

Tip credit score: The tip credit score is an possibility below the FLSA that permits employers to pay as little as $2.13 per hour to tipped staff so long as they earn sufficient tricks to attain the federal minimal wage of $7.25 per hour. Nevertheless, some states, together with California, Montana, Oregonand Washingtondon’t enable employers to use any kind of tip credit score to cut back the relevant minimal wage. As well as, many state and native minimal wages are larger than the federal quantity. The DOL affords a chart displaying minimal wage necessities for tipped staff in all 50 states.

Twin jobs: The DOL’s laws at 29 CFR 531.56 clarify that if an worker works in two really totally different jobs for a similar employer, equivalent to constructing upkeep and desk server, a tip credit score below the FLSA can solely be utilized to the desk server job. It’s common for a tipped job to incorporate associated duties that don’t straight produce suggestions (equivalent to when a server wipes down tables or briefly pitches in with meals preparation). The revised guidelines make it clear that these associated duties don’t should be picked aside and timed individually—all the occupation is taken into account as a complete in figuring out whether or not the employee is a tipped worker.

Tip pooling: Workers might voluntarily agree to separate or pool their suggestions, and an employer might facilitate this association. Nevertheless, solely employers that don’t take a tip credit score might require tipped staff to pool their suggestions with non-management staff who wouldn’t ordinarily obtain suggestions, equivalent to dishwashers or different “again of the home” staff. All employers, no matter whether or not they take a tip credit score, are forbidden from taking staff’ suggestions to present them to the employer or to supervisors or managers. The DOL’s laws clarify these prohibitions at 29 CFR 531.52 and 29 CFR 531.54.