On October 28, 2021, the DOL finalized the remaining provision of the Tip Final Rule that addresses Dual Jobs. The final rule clarifies that an employer may only take a tip credit when its tipped employees perform work that is part of the employee’s tipped occupation. Work that is part of the tipped occupation includes work that produces tips as well as work that directly supports tip-producing work, so long as the directly supporting work is not performed for a substantial amount of time.
Effective December 28, 2021, and employer may only take a tip credit when the tipped employee is performing tip producing work or:
- A tipped employee performs work that supports their tip producing work any continuous period of 30 minutes or more. If the employee performs the directly supporting work for more than 30 minutes, the tip credit may not be taken for the time in excess of 30 minutes.
- A tipped employee performs work that supports their tip producing work for no more than 20% of their hours worked during their work week where the tip credit is taken.
Employers may not take a tip credit for any time that the employee performs work that does not produce tips or that directly supports tip producing work.
U.S. Department of Labor Announces Final Rule Increasing the Minimum Wage for Federal Contractors.
On November 22, 2021, the DOL finalized the rule Increasing the Minimum Wage for Federal Contractors which was implemented by President Biden, by Executive Order 14026, on April 27, 2021. Effective January 30, 2022, the minimum wage for contractors to workers performing work on or in connection with covered federal contracts shall be $15.00 per hour and $10.50 per hour for tipped employees. Both rates will be annually adjusted on January 1, 2023, with the tipped minimum wage being eliminated in 2024.
The Executive Order applies to new contracts entered into on or after January 30, 2022, and also covers existing contracts that are renewed or extended (pursuant to an exercised option or otherwise) on or after January 30, 2022. It also includes workers with disabilities whose wages are calculated pursuant to certificates issued under section 14(c) of the Fair Labor Standards Act (FLSA).
The four major categories of contractual agreements include:
- procurement contracts for construction covered by the Davis-Bacon (DBA);
- service contracts covered by the Service Contract Act (SCA);
- concessions contracts, including concessions contracts excluded from SCA coverage; &
- contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
Link to the DOL’s Final Rule: Increasing the Minimum Wage for Federal Contractors (Executive Order 14026) webpage can be found here.