Here's a Tip: Tread Carefully

As we previously wrote, Congress has now amended Section 3(m) of the federal Fair Labor Standards Act (FLSA) to prohibit an employer from "keep[ing] tips received by its employees for any purpose, including allowing managers or supervisors to keep any portion of employees' tips, regardless of whether or not the employer takes a tip credit." So why did Congress include this amendment within a budget reconciliation bill, with little fanfare and apparently no public debate? With that question in mind, we look back at the series of events that culminated in the recent amendment. We also highlight questions resulting from the amendment that will likely require future agency guidance and/or regulatory action.