On October 29, 2021, the United States Department of Labor (DOL) released its final rule for employees tipping. It comes into effect on December 28, 2021. The DOL issued a Notice of Proposed Regulatory Proposal (NPRM) on June 21, 2021, proposing limits on tip credit that employers can take during work weeks when employees are tipping. perform work that directly supports the tip work but does not do it itself. tip. (See our before Alert discuss NPRM.)
The final rule defines “direct support work” as “work performed by an employee to tip in preparation for or otherwise assist in tipping customer service work.” An employer can get tip credit for the time that a tip employee spends doing work that does not generate a tip but directly supports a job that earns a tip, as long as an employee does not perform that work for a period of time. substantial period of time.
Employees have performed direct support work for a substantial period of time if:
- direct support work exceeds 20 percent of the hours in a work week for which the employer has taken tip credit (80/20 rule); Where
- for any continuous period of time, direct support work exceeds 30 minutes. If a tip employee performs direct support work for a continuous period greater than 30 minutes, the employer cannot take tip credit for any duration greater than 30 minutes. Time in excess of 30 minutes, for which an employer cannot take tip credit, is excluded from the 20 percent level calculation.
Non-tipping occupation work is any work that does not provide customer service for which a tip employee receives tips and does not directly support the work producing tips. If a tipped employee is required to perform work that is not part of the employee’s tipping occupation, the employer cannot take tip credit for that period.
Employers’ net profit
Employers should anticipate an increase in litigation and the application of DOL as a consequence of this final rule. Employers who use tip credit should implement procedures to help monitor, plan and limit the non-tip work of tip employees and ensure that direct support work does not exceed the 80/20 rule or 30 minutes of continuous work.