U.S. Labor Department Strengthens Penalties for Employers Who Steal Tips From Their Staff

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Under the new rules, employers will face civil penalties of $1,100 when they keep employees’ tips. - UNSPLASH / SAM DAN TRUONG
  • Unsplash / Sam Dan Truong
  • Under the new rules, employers will face civil penalties of $1,100 when they keep employees’ tips.

Business owners face stiffer monetary penalties for tip theft under new rules published Friday by the U.S. Department of Labor, Nation’s Restaurant News reports.

The new rules restore the department’s ability to levy civil penalties against employers such as restaurants who keep workers' tips — a process made more difficult under the Trump White House. A rule change under that administration said employers could be fined if the tip theft was “repeated or willful.”



After the latest revision, business owners now face civil penalties of $1,100 when they keep employees’ tips, according to the NRN report.

“Workers who depend on tipped wages are every bit as entitled to expect to keep what they’ve earned as other workers,” U.S. Secretary of Labor Marty Walsh said in a statement quoted by the site.



“An employer who withholds workers’ tips in violation of the law deprives them of that security. ... This final rule helps us protect their earnings by strengthening tools to hold employers legally responsible for those violations.”

In another alteration to the rule, managers and supervisors who earn tips will be allowed to contribute to tip-pooling arrangements, according to NRN. However, they are prohibited from receiving tips from those pools.

In short, managers and supervisors are allowed to keep tips only when they are received from customers directly for service that the manager or supervisor solely provided, the department said.

The new rules were published in the Federal Register Friday and are scheduled to take effect in 60 days.

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