Proposed changes to tip rules may deprive workers of significant earnings

The Department of Labor (“DOL”) has announced that it plans to change some of the parameters concerning tipped employees, including the use of tip pools. The new policy would allow employers to pool tips as long as the employees earn minimum wage. Thus far, no announcements have been made concerning how the tips will be distributed once pooled.

Previously, non-tipped workers, such as managers, were not allowed to receive a portion of workers’ tips. However, the newly proposed changes  have not explicitly banned this practice, worrying workers that their earnings may be siphoned off by supervisors. Evidence exists that even with rules against sharing, upwards of 12% of employers illegally retained tips, which is part of the reason behind the Obama administration’s ban on employers sharing tips with wait staff.

One study found that if the proposed tip rule passes, tipped workers stand to lose $5.8 billion in tips, with women baring roughly 80% of that loss.

For more information on the proposed tip rule changes or any other FLSA question, please contact the dedicated Atlanta wage and hour lawyers at Buckley Bala Wilson Mew LLP.