U.S. Department of Labor Finalizes Tip Theft Rule Thumbnail

U.S. Department of Labor Finalizes Tip Theft Rule

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On September 22, 2021, the U.S. Department of Labor (“DOL”) finalized a regulation which allows for penalties up to $1,100 per violation, plus back wages owed, whenever the DOL finds tipped workers have been cheated of tips. Previously, a Trump Administration rule, which was never finalized, only allowed fines to be imposed for “repeated and willful” violations. The new penalty provisions apply when employers, supervisors or managers keep tips intended for tipped workers such as servers, bartenders and the like. The removal of the “repeated and willful” language from the text of the final rule presumably provides the DOL more flexibility to determine when penalties are warranted. The final rule also addresses circumstances when supervisors or managers are permitted to retain tips and when they can contribute tips to a tip pool. The final rule goes into effect November 23, 2021. 

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