In an action taken shortly before the Presidential transition, the outgoing Trump Administration’s Department of Labor (DOL) issued final revisions to its regulations addressing tip ownership and tip pools under the Fair Labor Standards Act (FLSA) and Executive Order 13658, which establishes a minimum wage for employees working on certain federal contracts.
The revised regulations are substantially similar to those proposed by DOL’s Wage and Hour Division (WHD) in 2019. And while the revisions for the most part adhere closely to statutory amendments made by Congress to the FLSA in 2018, one provision related to tipped employees’ performance of “related duties” is contentious and opposed by worker advocates closely aligned with the new Biden Administration. As a result, the revised rules, which are scheduled to take effect March 1, 2021, are very likely to be paused and reviewed by the new Administration. On top of that, the new rules have already been challenged in a lawsuit filed by a number of states on grounds that the related duties test used in the final rule is inconsistent with the FLSA, among other things.
Members of the Center for Workplace Compliance (CWC) can read more here.