Dept. of Labor proposes changes to current tipping regulations

WASHINGTON – The U.S. Department of Labor announced on Tuesday a new proposal to change the regulations for tipping.

The rule would affect states who have employee tip credit meaning the state requires employers to pay tipped employees full state minimum wage before tips.

Montana is one of seven states and territories who require employers to pay their tipped employees full state minimum wage before tips.

Courtesy Department of Labor

The Notice of Proposed Rulemaking (NPRM) under the Fair Labor Standards Act (FLSA) would allow workplaces freedom to allow sharing of tips among employees who are non-tipped workers. It would allow tip pooling with employees who do not normally receive direct tips such as dishwashers or restaurant cooks.

“These ‘back of the house’ employees contribute to the overall customer experience but may receive less compensation than their traditionally tipped co-workers,” a press release from the Department of Labor said. 

The Department of Labor says the proposal would decrease the wage disparities between the tipped and non-tipped employees. The proposal is currently restricted by a rule implemented 2011.

According to the release, there has been legal action that has directly challenged the Department’s ability to enforce the current regulations. Some states have changed their laws to require employers to pay employees the employee tip credit. The new rule would keep with that trend.

The proposal is now open for public comment for the next 30 days. To submit comments click here.