Counting Tips Toward Minimum Wage Requirements

An employer can satisfy a portion of its minimum wage obligation to a “tipped employee” by taking a partial credit based on the tips received. The The DOL issued a final rule clarifying some aspects of counting tips toward minimum wage requirements. While managers and supervisors may not receive tips from mandatory tip pools or tip sharing arrangements, they are not prohibited from contributing tips to eligible employees in mandatory tip pools or sharing arrangements. Employers may not retain tips under any circumstances and doing so can result in civil penalties (up to $1,100 per violation). The final rule is effective November 23, 2021. #IdeaoftheDay