Understanding the Tip Income Protection Act of 2018

Unfortunately, as has become the norm these days, the 2017 regulatory proceeding became highly politicized, which opened the door for a Congressional resolution that was buried in the recent government spending bill.[...]the FLSA secured an employee’s right to receive the proscribed minimum wage and overtime, but it has now been amended and its protections have been extended to cover all tip income regardless of whether the employer relies upon any portion of the tip income in meeting its minimum wage requirements — in other words, regardless of whether the employer applies a tip credit. The impact on tip pooling The concern that the Tip Income Protection Act of 2018 will usher in a whole new wave of FLSA collective actions is based on the vague and ambiguous statutory prohibition language which begs the question: what is meant by the terms “may not keep tips received by its employees for any purposes?” For decades, restaurant employers have operated various forms of tip pooling and tip sharing arrangements where servers have been required to share a portion of the tip income with other customarily tipped employees, such as bussers, food runners and service bartenders. In such arrangements, the employers do not “keep” any portion of the tip income, but they do facilitate and ensure that a portion of the tip income is shared with and distributed to other employees.[...]the obvious question arises as to whether such arrangements will be deemed to violate the new statutory language.