Saturday, October 12, 2019

U.S. Department of Labor Issues Notice of Proposed Rulemaking for Tipped Employees

WASHINGTON, DC – The U.S. Department of Labor announced a proposed rule for tip provisions of the Fair Labor Standards Act (FLSA) implementing provisions of the Consolidated Appropriations Act of 2018 (CAA). The proposal would also codify existing Wage and Hour Division (WHD) guidance into a rule.
The CAA prohibits employers from keeping employees' tips. During the development of those provisions, the Department provided technical assistance to Members of Congress. The Department's proposed rule would allow employers who do not take a tip credit to establish a tip pool to be shared between workers who receive tips and are paid the full minimum wage and employees that do not traditionally receive tips, such as dishwashers and cooks.
The proposed rule would not impact regulations providing that employers who take a tip credit may only have a tip pool among traditionally tipped employees. An employer may take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (currently $2.13 per hour) and the federal minimum wage. Establishments utilizing a tip credit may only have a tip pool among traditionally tipped employees.
Additionally, the proposed rule reflects the Department's guidance that an employer may take a tip credit for any amount of time an employee in a tipped occupation performs related non-tipped duties with tipped duties. For the employer to use the tip credit, the employee must perform non-tipped duties contemporaneous with, or within a reasonable time immediately before or after, performing the tipped duties. The proposed regulation also addresses which non-tipped duties are related to a tip-producing occupation.
"The proposed rule shows the Department's commitment to ensure that employees' tips are not stolen," said Wage and Hour Administrator Cheryl Stanton. "This proposal offers a clear pathway for both employers and employees to legally operate a tip pool. The Department is also seeking to add further guidelines in order to complement congressional action and solidify current guidance with the benefit of public input through notice and comment rulemaking."
This NPRM is available for review and public comment for 60 days. The Department encourages interested parties to submit comments on the proposed rule. The NPRM, along with the procedures for submitting comments, can be found at the WHD's Proposed Rule website.
WHD's mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of the Nation's workforce. WHD enforces Federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the FLSA. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration related statutes. Additionally, WHD administers and enforces the prevailing wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to Federal contracts for construction and for the provision of goods and services.
The mission of the Department of Labor is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.
Agency
 
Wage and Hour Division
Date
 
October 7, 2019
Release Number
 
19-1800-NAT
Contact: Emily Weeks
Phone Number
 

Friday, October 11, 2019

Breaking: DOL finalizes $35K overtime threshold

The U.S. Department of Labor (DOL) announced today it will publish a final overtime rule, setting the minimum salary threshold for overtime eligibility at $35,568. The regulations implement the Fair Labor Standards Act (FLSA)'s overtime mandate and, according to a senior DOL official, will make an estimated 1.3 million additional U.S. workers eligible for overtime pay. The final rule will be effective January 1, 2020.

The threshold is slightly higher that the $35,308 proposed in the initial draft of the rule and also will allow employers to count non-discretionary bonuses, incentives, and commissions as up  to 10% of an employee's salary level, as long as those bonuses are paid annually. The FLSA's exemption threshold for highly-compensated employees will be set at $107,432, lower that in DOL's initial draft but still higher than the previous threshold of $100,000.

What is it?

The FLSA finalized a new rule that would increase the minimum salary requirement for exempt employees.

What does this mean for business owners?

Any employee on a salary less than $38,568 will now be eligible for overtime. Clients that don't want to raise their employee's salaries to the new minimum will need a system to track their hours and overtime.