U.S. DOL Announces Intent to Repeal Rule Restricting an Employer’s Use of Tips Where No Tip Credit is Taken


All Employers


July 20, 2017


Contact HR On-Call

(888) 378-2456

On July 20, 2017, the Wage and Hour Division (“WHD”) of the U.S. Department of Labor (“DOL”) announced its intention to repeal a 2011 rule stating that customer tips are always the property of an employee, regardless of whether or not the employer takes a tip credit, and that employers were prohibited from using tip pooling to subsidize the hourly wages of untipped employees. Further, a DOL spokesperson reportedly told Bloomberg BNA that DOL investigators are forbidden from enforcing the 2011 regulation ahead of the proposed rule.  Once the rule is rescinded, employers who do not apply a tip credit against a tipped employees’ wages will be able to keep or distribute gratuities in any way the employer sees fit.