DOL Issues Final Rule Increasing Protections for Tipped Workers

In the ongoing saga of the tipped worker regulations, the U.S. Department of Labor released a Final Rule that expanded its ability to seek civil money penalties against employers, among other things.

In 2020, the Trump DOL issued an employer-friendly tipped worker Final Rule. After the Biden Administration took office, the DOL took a number of actions to withdraw and revise portions of the Rule. In this latest step, the new Final Rule reinstates the ability of the DOL to seek a civil money penalty of up to $1,100 when employers unlawfully keep employees’ tips, regardless of whether the violation was repeated or willful. It also reinstates a broader definition of “willful” violations.

The Final Rule also modifies provisions applicable to managers and supervisors. One revision clarifies that, while they cannot receive tips from mandatory tip pools or tip sharing arrangements, they may contribute tips to employees in those pools and arrangements. Another revision applies to the provision that managers and supervisors may keep tips for services they directly provide to customers, to add that such service must also be “solely” provided by them.