Employee Tip Rule

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DOL Will Allow Portions of the Tip Rule to Take Effect April 30

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After reviewing the rule for consistency with law and policy, the DOL announced that it will allow provisions that increase worker protections and earnings to take effect in April, including provisions that:

  • Prohibit employers (including managers and supervisors) from keeping their employees’ tips, regardless of whether the employer takes a tip credit; and

  • Allow employers that do not take a tip credit to include non-tipped workers (including cooks and dishwashers) in nontraditional tip-sharing agreements.

DOL Delays Effective Date for 2020 Employee Tip Rule

On Feb. 26, 2021, the U.S. Department of Labor (DOL) delayed the effective date of its 2020 employee tip rule to April 30, 2021. This rule was originally scheduled to go into effect on March 1, 2021.

The rule prevents employers from keeping their employees’ tips and specifically prohibits managers and supervisors from keeping any portion of employee tips, including any from a tip pool.