Labor & Employment Law Updates
The U.S. Department of Labor (DOL) announced a proposed tip-pooling rule that would give certain employers more flexibility in distributing pooled tips. Under the proposed rule, employers who do not take a tip credit and pay employees the full minimum wage may include employees who are not customarily and regularly tipped employees, such as back-of-house employees like dishwashers and cooks, in a mandatory tip pool.
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The United States Department of Labor (“DOL”) will no longer enforce an Obama-era regulation concerning when and how employers may use tip-pools (i.e., pools of tips collected by restaurants and other service industry employers, and redistributed among employees). The 2011 regulation prohibited employers who did not take a “tip credit”—that is, employers who paid their employees the full minimum wage—from requiring their tipped employees, such as servers and bartenders, to share tips with non-tipped employees, such as dishwashers, cooks, hosts, and floor supervisors. Previously, courts had held that prohibitions on tip pooling could apply only to employers who took a tip credit.
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