Final Amended FLSA Regulations Make Significant Changes to Tip Credit Processes and Proposed Fluctuating Work Week Rules

On April 5, 2011, the Wage and Hour Division of the U.S. Department of Labor published its final amendments to regulations interpreting the Fair Labor Standards Act of 1938 (FLSA) and the Portal-to-Portal Act of 1947. While most of the changes do little more than comport the regulations to the language of current laws, proposed changes adopted to tip credit regulations, and the decision not to adopt proposed amendments concerning fluctuating workweek compensation, are significant and require employers relying on these regulations and pay methods to take immediate action.

Tip Credit Regulation Changes

The amendments to the DOL's tip credit regulations are the first changes to the regulations in 44 years. The DOL's original tip credit regulations were promulgated in 1967, one year after the 1966 FLSA amendment that created the tip credit provision in section 3(m). Although section 3(m) was amended in 1974 and again in 1996, the tip credit regulations remained