The 2,232-page bud­get spend­ing bill that was signed by Pres­i­dent Trump on March 23, 2018, includ­ed an amend­ment to the Fair Labor Stan­dards Act (FLSA) pro­hibit­ing employ­ers, man­agers, or super­vi­sors from col­lect­ing or retain­ing tips made by employ­ees, regard­less of whether the employ­er takes a tip credit.

This law essen­tial­ly blocked the U.S. Depart­ment of Labor’s 2017 pro­posed rule which would have allowed tip shar­ing between employ­ees who direct­ly earn them with “back of the house” employ­ees who “[c]ontribute to the over­all cus­tomer expe­ri­ence,” but do not tra­di­tion­al­ly receive direct tips, such as cooks and dishwashers.

The next step with the DOL’s pro­posed rule could be that the agency pulls it or con­forms the rule­mak­ing to the spend­ing bill. How­ev­er, experts are con­cerned that the bill did not go far enough to pro­vide clear and con­cise def­i­n­i­tions. For exam­ple, in the restau­rant indus­try employ­ees can wear many hats. So what hap­pens when a food serv­er is the shift lead? Is a shift lead a man­ag­er or super­vi­sor because they are grant­ed author­i­ty, be it min­i­mal author­i­ty, over oth­er food servers? Employ­ers will be look­ing to the DOL to pro­vide more specifics.

For the time being, the FLSA stan­dard con­tin­ues, “[a] valid tip pool may not include employ­ees who do not cus­tom­ar­i­ly and reg­u­lar­ly received tips, such as dish­wash­ers, cooks, chefs, and janitors.”

Get the basics in our Fed­er­al Employ­ment Law Update or go more in depth into the back­ground and impli­ca­tions of tip­ping reg­u­la­tions on Eater.

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