Achilles Group Blog
6.6.11 - The DOL's Revised Regulations Warrant Caution for Employers Taking Tip Credits - Effective 5 May 2011 | Back
On April 5, 2011, the Department of Labor Wage and Hour Division presented finalized changes to several Fair Labor Standards Act regulations. The division initially published its proposed regulations in July 2008, and then allowed public comments on the rules for 60 days. Finally, the division published the regulations April 2011 and the new directives went into effect 30 days later on May 5, 2011. This time, the division provided no opportunity for public comments. The revised regulations greatly affect Employers who take advantage of the Tip Credit Provision to meet the minimum wage payment requirements.
IMPORTANT REVISED REGULATIONS FOR "TIP CREDIT PROVISION" EMPLOYERS: The main issue is the requirements around the notice required to be given to the tipped employee. The original 2008 proposal would not have changed the regulations concerning tip credit notice:
"Pursuant to section 3(m), an employer is not eligible to take the tip credit unless it has informed its employees that it intends to avail itself of the tip wage credit. Such notice shall be provided in advance of the employer's use of the tip credit; the notice need not be in writing, but must communicate to employees that the employer intends to treat tips as satisfying part of the employer's minimum wage obligation."