Labor Department Clarifies Tip-pooling Rules

Apr 16

TIP-POOLING UPDATE: Our industry achieved a significant victory in the recently passed “omnibus” spending bill that fully repealed a 2011 regulation that attempted to prohibit back-of-the-house staff from participating in tip pools in restaurants where employers did not take a tip credit. However, we needed further clarification over a provision that bars some “managers” and “supervisors” from participating in a tip-pool.

We are pleased that the Department of Labor (DOL) is moving forward with the process to roll-back the Obama-era rule with its recent release of a Field Assistance Bulletin (FAB), which provides our industry with much needed clarity. The FAB instructs employers to use the “duties test” to determine who qualifies as a supervisor or manager, and establish tip-pool eligibility. Essentially, if an employee earns most of their pay through tips, but also has a limited supervisory role, they are still allowed to participate in a tip-pool.

We will continue to offer advice to the DOL as it works to finalize tip-pooling regulations and procedures. If you have any questions or need assistance please contact Kenneth Besserman, TRA General Counsel. 


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