Employers of tipped workers need to start exploring how their pay and timekeeping policies may need to change once a new rule from the U.S. Department of Labor (DOL) is finalized.
The DOL announced a Notice of Proposed Rulemaking on June 21 that includes limitations on the amount of non-tip-producing work a tipped employee can perform when the employer is taking a tip credit. Taking a credit refers to the practice of paying a tipped minimum wage instead of the full minimum wage of $7.25 an hour. The Fair Labor Standards Act (FLSA) allows employers with tipped workers to pay as little as $2.13 per hour as long as the workers’ tips bring the hourly pay up to at least $7.25.
