A new final rule from the Department of Labor (DOL) makes it clear how employers should handle their workers’ tips.

The rule, which amends the Fair Labor Standards Act, specifically states that employers aren’t allowed to keep these tips under any circumstances.

Managers and supervisors aren’t allowed to receive any portion of employees’ tips, either.

Handling tip pools

Another key change in the rule concerns tip pooling. Previously, employers that didn’t take a tip credit weren’t allowed to create mandatory nontraditional tip pools that also included employees who typically don’t receive tips (e.g., dishwashers).

Now, the DOL has removed these restrictions, although there’s also a new recordkeeping requirement for employers who establish this tip pool.

In addition, any employer that collects tips for a mandatory tip pool must now distribute these tips no less frequently than when it pays wages.

More info: dol.gov/agencies/whd/flsa/tips