View Rule

In the Consolidated Appropriations Act of 2018 ("CAA"), Congress amended section 3(m) of the Fair Labor Standards Act ("FLSA" or "Act") to prohibit employers from keeping tips received by their employees, regardless of whether the employers take a tip credit under section 3(m). On December 30, 2020, the Wage and Hour Division ("WHD") published Tip Regulations Under the Fair Labor Standards Act (the "Tip Rule") in the Federal Register to address these amendments. See 85 FR 86756. The Tip Rule would also codify WHD’s guidance regarding the tip credit’s application to tipped employees who perform tipped and non-tipped duties. The effective date of the Tip Rule is March 1, 2021. In accordance with the Presidential directive as expressed in the memorandum of January 20, 2021, from the Assistant to the President and Chief of Staff, entitled Regulatory Freeze Pending Review, the Department has published a Notice of Proposed Rulemaking to delay the effective date of the rule until April 30, 2021, to review and consider the questions of law, policy, and fact raised by the rule. The Department proposes to withdraw and re-propose one portion of the Tip Regulations Under the Fair Labor Standards Act (FLSA) (2020 Tip final rule) related to the determination of when a tipped employee is employed in dual jobs under the regulations.