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DOL/WHD RIN: 1235-AA21 Publication ID: Spring 2022 
Title: Tip Regulations Under the Fair Labor Standards Act (FLSA) 
Abstract:

In the Consolidated Appropriations Act of 2018 (CAA), Congress amended section 3(m) of the Fair Labor Standards Act (FLSA) to prohibit employers from keeping tips received by their employees, regardless of whether the employers take a tip credit under section 3(m). Congress also amended section 16(e) of the FLSA to allow the Department to impose civil money penalties (CMPs) when employers unlawfully keep employees’ tips. On December 30, 2020, the Wage and Hour Division (WHD) published Tip Regulations Under the Fair Labor Standards Act (the "2020 Tip final rule") in the Federal Register to address these amendments and to codify guidance regarding the FLSA tip credit’s application to employees who perform tipped and non-tipped duties. The effective date of the 2020 Tip final rule was March 1, 2021, but the Department extended that date until April 30, 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. The Department further delayed three portions of the 2020 Tip final rule until December 31, 2021: two portions addressing the assessment of CMPs and the portion addressing the application of the FLSA tip credit to tipped employees who perform tipped and non-tipped duties. The Department proposed to withdraw these three portions of the 2020 Tip final rule and proposed new language addressing these three issues. On September 24, 2021, a Department final rule (CMP final rule) was published in the Federal Register, which among other things, adopted language upholding the Department’s statutorily-granted discretion with regard to section 3(m)(2)(B) CMPs, and aligned the Department’s regulations with the FLSA’s statutory text. On June 23, 2021, the Department published an NPRM (Dual Jobs NPRM) in the Federal Register, 86 FR 32818, proposing to withdraw and repropose the portion of the 2020 Tip final rule addressing when a tipped employee performs both tipped and non-tipped duties under the FLSA. The comment period closed on August 23, 2021. The Department published a final rule on October 29, 2021 to finalize its proposal to withdraw one portion of the Tip Regulations Under the FLSA (2020 Tip final rule) and finalize its proposed revisions related to the determination of when a tipped employee is employed in dual jobs. Specifically, the Department amended its regulations to clarify that an employer may only take a tip credit when its tipped employees perform work that is part of the employee’s tipped occupation.

 
Agency: Department of Labor(DOL)  Priority: Economically Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Completed Actions 
Major: Yes  Unfunded Mandates: Private Sector 
CFR Citation: 29 CFR 531    29 CFR 10    29 CFR 516    29 CFR 578    29 CFR 579    29 CFR 580   
Legal Authority: Fair Labor Standards Act    29 U.S.C. 201 et seq.    29 U.S.C. 203(m)    Pub. L. 115-141   
Legal Deadline:  None
Timetable:
Action Date FR Cite
NPRM  12/05/2017  82 FR 57395   
NPRM Comment Period Extended  12/15/2017  82 FR 59562   
NPRM Comment Period Extended End  02/05/2018 
NPRM; and Withdrawal of NPRM dated 12/05/2017 (82 FR 57395)  10/08/2019  84 FR 53956   
NPRM Comment Period End  12/09/2019 
NPRM Comment Period Extension  12/11/2019  84 FR 67681   
NPRM Comment Period Extension End  12/11/2019 
Final Rule (2020 Tip final rule)  12/30/2020  85 FR 86756   
Proposed Delay of Final Rule Effective Date (to 4/30/21)  02/05/2021  86 FR 8325   
Proposed Delay of Final Rule Effective Date Comment Period End   02/17/2021 
Final Rule Delay of Effective Date (to 4/30/21)  02/26/2021  86 FR 11632   
Final Rule Delay of Effective Date Effective  04/30/2021 
NPRM; Partial Withdrawal (CMP NPRM)  03/25/2021  86 FR 15817   
NPRM; Partial Withdrawal (CMP NPRM) Comment Period End  05/24/2021 
NPRM; Proposed Delay of Effective Date (to 12/31/2021)  03/25/2021  86 FR 15811   
NPRM; Proposed Delay of Effective Date Comment Period End (to 12/31/21)  04/14/2021 
Final Rule; Delay of Effective Date (to 12/31/21)  04/29/2021  86 FR 22597   
Final Rule; Partial Withdrawal (CMP Final Rule)  09/24/2021  86 FR 52973   
Final Rule; Partial Withdrawal (CMP Final Rule) Effective  11/23/2021 
NPRM; Partial Withdrawal (Dual Jobs NPRM)  06/23/2021  86 FR 32818   
NPRM; Partial Withdrawal (Dual Jobs NPRM) Comment Period End  08/23/2021 
Final Rule; Partial Withdrawal (Dual Jobs Final Rule)  10/29/2021  86 FR 60114   
Final Rule; Partial Withdrawal (Dual Jobs Final Rule) Effective  12/28/2021 
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: Businesses  Federalism: No 
Included in the Regulatory Plan: Yes 
RIN Data Printed in the FR: No 
Agency Contact:
Amy DeBisschop
Director of the Division of Regulations, Legislation, and Interpretation
Department of Labor
Wage and Hour Division
200 Constitution Avenue NW, FP Building, Room S-3502,
Washington, DC 20210
Phone:202 693-0406