DOL Proposes Rescission of Regulations that Restrict Tip Pooling

2 Min Read By Helen Holden

In December, the U.S. Department of Labor, Wage and Hour Division (DOL) will publish a Notice of Proposed Rulemaking (NPRM) and a request for comments on tipping regulations issued pursuant to the Fair Labor Standards Act (FLSA.) The NPRM will propose that the tip pooling regulations issued by the DOL in 2011, which placed restrictions on employers’ ability to implement tip pooling arrangements, should be rescinded. This move strongly signals that the DOL may start strategically backing away from some of its prior regulatory initiatives. Employers in the restaurant and hospitality industry, as well as employers in any other industry where tips constitute a significant portion of employee compensation, should carefully monitor this proposal as it progresses through the rule making process.

Since 2011, there has been a significant amount of private litigation involving the tip pooling and tip retention practices.

Under the FLSA, employers may choose to pay certain employees a…