Vision Payroll

July 13, 2011

Tip of the Week: Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees

Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees
Restaurants Should Obtain a Signed Tip Credit Notice from All Tipped Employees
On April 5, 2011, the US Department of Labor (DOL) issued a final rule that affects employers who have tipped employees. The rule amended a Fair Labor Standards Act (FLSA) regulation. All employers are required to provide certain required information to all tipped employees in either oral or written form.

Signed Written Notice Would Document That Requirements Were Met

The DOL commented although a written notice is not required, “employers may wish to do so, since a physical document would, if the notice is adequate, permit employers to document that they have met the requirements in section 3(m) and the Department’s regulations to ‘inform’ tipped employees of the tip provision.”

NRA, CSRA, and NFIB Have Filed Suit over Tip Credit Regulation

The National Restaurant Association (NRA), Council of State Restaurant Associations (CSRA), and National Federation of Independent Business (NFIB) have filed suit over the new final rule. According to the NRA:

The Final Rule followed a notice of proposed rulemaking (NPRM) that the DOL published in 2008 that would have made only technical and non-substantive changes to the tip credit notice regulation. Nothing in the 2008 NPRM put the public on notice that the DOL was contemplating significant changes to the tip-credit notice requirements.

Vision Payroll Recommends Restaurants Implement a Written Notice Policy

The NRA has provided sample documents that restaurants and other who have hired tipped employees may download. Vision Payroll recommends that employers review the documents with legal counsel and implement a written notice policy as soon as practicable.

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