Beginning December 28, 2021, employers must pay tipped employees the full minimum wage for periods when non tip-producing work is performed for a substantial amount of time, in light of a new Department of Labor (DOL) Final Rule taking effect that date. To comply with the rule, employers should revisit their current policies regarding how tipped employees are compensated and ensure that they carefully track how tipped workers spend their time.
A tip credit allows an employer the opportunity to satisfy a portion of its minimum wage obligation to a tipped employee by taking a partial credit toward the minimum wage based on the amount of tips an employee receives, provided that the employer meets certain requirements. Please note that the references to minimum wage requirements in this article are based on the federal minimum wage; many states and localities have higher minimum wage requirements that must be honored. In addition, some states may not allow for a tip credit at all. Continue Reading