From: Staffing
Transcript:
Legal Update
DOL Proposes Rule to Clarify When Tips Wages Apply
On June 21, 2021, the US Department of Labor (DOL) announced a proposed rule to clarify when employers can claim a tip credit to compensate their tipped employees.
The Fair Labor Standards Act allows employers to claim a tip credit when compensating tipped employers for tip-producing work, the proposal clarifies that employers can claim the tip credit only for tip-producing work.
Tip-producing work includes work that is part of an employee’s tipped occupation, along with any activities that “directly support” tip-producing work.
However, employers cannot use the tip credit for activities that directly support tip-producing work when these activities exceed 20% of the employee’s hours worked or are performed for a continuous period of time exceeding 30 minutes.
Employers with tipped employees should become familiar with this proposal and monitor DOL communications for updates regarding tipped wage regulations.
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