Last month, Congress amended the FLSA in the Consolidated Appropriations Act, 2018 (Act), Pub. L. No. 115-141, Div. S., Tit. XII, § 1201.

The DOL issued guidance indicating that the Act stops employers from keeping tips received by their employees, regardless whether the employer takes a tip credit under 29 U.S.C. § 203(m). Employers who pay the full FLSA minimum wage are now allowed to include employees who are not customarily tipped employees (such as cooks and dishwashers) to participate in tip pools.

Managers and supervisors cannot participating in tip pool and the DOL will use the duties test at 29 C.F.R. § 541.100(a)(2)-(4) to determine whether an employee is a manager or supervisor for purposes of section 3(m).

The DOL can recover all tips unlawfully kept by the employer, in addition to an equal amount in liquidated damages and civil penalties.

DOL Field Assistance Bulletin Guidance