On March 23rd, President Trump signed into law a massive
spending bill. Buried on page 2025 of the spending bill,
available here, is the following amendment to Section
203(m) of the Fair Labor Standards Act (FLSA), the federal
wage-hour law: "An employer may not keep tips received by its
employees for any purposes, including allowing managers or
supervisors to keep any portion of employees' tips, regardless
of whether or not the employer takes a tip credit." The new
law also states that any employers who violate this rule will be
liable to the employees in the amount of the tips that were taken,
"an additional equal amount as liquidated damages," and
"a civil penalty not to exceed $1,100 for each such
violation," as the U.S. Department of Labor (DOL) shall
determine. The back story to this change in the wage-hour law
is important to understanding its impact on wage-hour enforcement
going forward.
