News
FLSA Prohibits Employer Tip Retention
Posted 04.18.18
A 2018 spending bill enacted on March 23, 2018, amends the Fair Labor Standards Act (FLSA) to:
- Prohibit employers from retaining employees’ tips, regardless of whether the tip credit is used; and
- Eliminate prior regulations that barred tip pooling when employers pay tipped employees at least the full FLSA minimum wage and do not claim a tip credit.
In addition, employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools. However, employers must continue to comply with any state or local requirements that exceed federal standards.
Refer to the attached compliance bulletin for detailed information and contact your NEEBCo representative with questions.
FLSA Amendment Prohibits Employers from Retaining Tips Allows Tip Pooling