The US Department of Labour has proposed a rule change regarding the tip regulations under the Fair Labour Standards Act (FLSA).
The Notice of Proposed Rulemaking (NPRM) seeks to allow sharing of tips among tipped and non-tipped employees to help decrease wage disparities, especially in restaurants.
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Currently, tips are the property of the employee who received them as per a rule that went into effect in 2011.
In line with this 2011 rule, several states have also changed their laws.
The proposed rule, which applies only where employers pay a full minimum wage and do not take a tip credit, allows tip-pooling with employees such as restaurant cooks and dishwashers who do not receive direct tips.
However, the proposal would not affect current rules under the FLSA.
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By GlobalDataThe proposal comes amidst several litigations involving the tip pooling and tip retention practices of employers that pay a direct cash wage that is at least the federal minimum wage.
The NPRM has been published in the Federal Register and will be available for public comment for 30 days.
