DOL Releases Opinion Letters for Two FLSA Topics: Tipped Workers and Establishment Workers

01/15/2021 1:28 PM | Anonymous

On January 15, 2021, the U.S. Department of Labor released the following Fair Labor Standards Act (FLSA) opinion letters:

  • FLSA 2021-5: This letter provided a step-by-step calculation of overtime pay under the FLSA when a tipped employee works as a server and bartender, receives tips, and also receives automatic gratuities or service charges.
  • FLSA 2021-4*: (withdrawn as of 1/26/21) This letter found that a restaurant can implement a nontraditional tip pool under the FLSA’s new regulatory changes, not yet effective but set to be soon, so long as it does not include any managers or supervisors, the employer does not take a tip credit, and it pays the full minimum wage to both the tipped employees (servers) who contribute to the pool and the non-tipped employees (hosts or hostesses) who receive tips from the pool. A nontraditional tip pool includes both tipped employees and non-tipped employees.
  • FLSA 2021-3: This letter assessed three different entities and whether they satisfy the FLSA’s establishment requirement, which provides an exemption from minimum wage and overtime provisions for workers of an amusement or recreational establishment, and whether an accrual method of accounting may be used to satisfy the FLSA’s Receipts Test.

*2021-4 was withdrawn. It was determined to be issued prematurely because it was based on a rule that has not taken effect. The withdrawal is an official ruling of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259, and the letter may not be relied upon as a statement of agency policy as of the withdrawal date.


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