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The DOL’s proposal on tips: They should be shared
By Katherine Fechte on December 11, 2017 at 4:25 PM

Elevated view of a restaurant bill and money, showing a tip. The Wage and Hour Division of the Department of Labor (DOL) recently proposed a rule affecting tip regulations under the Fair Labor Standards Act. Under the rule proposed Dec. 4, 2017, establishments can implement tip pools, or require servers and workers who earn tips to share with those, such as line cooks and dishwashers, who do not.

The rule, which reverses a 2011 DOL regulation restricting the practice, would only apply to employers who pay a full federal minimum wage and do not take a tip credit (both Illinois and Missouri law allow employers to take a tip credit). The proposal was published in the Federal Register on Dec. 5 and is subject to a 30-day public comment period.

While the DOL says its goal is to help decrease the wage disparities between tipped and non-tipped workers, some establishment owners and employees feel differently. Those who oppose tip-sharing believe the proposed rule allows establishments to control tips, and even keep some tips for the house. Others believe employers should address an alleged wage disparity by paying the non-tipped employees more, not by relying on servers to share the tips they earned. Even the courts are in conflict on the issue. And just this year, the Tenth and Eleventh Circuit Courts weighed in on the issues surrounding employer control of tips.

While the DOL’s proposal is not the law yet, it could be in the foreseeable future. If you have questions about the DOL’s proposed rule and its impact, or how to submit a comment on the proposal, please contact one of the attorneys in our Employment & Labor group.

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