DOL Cracks Down, and Opens Cracks, on Employers Keeping Tips

Employers will soon face stricter financial penalties for keeping their employees’ tips under a final rule published by the U.S. Department of Labor (DOL) on September 24, 2021. Section 3(m)(2)(B) of the Fair Labor Standards Act (FLSA) prohibits employers—including “managers and supervisors”—from keeping employees’ tips “for any purposes,” regardless of whether employers claim a tip credit.