Tipping can be a minefield. Just ask Mario Batali, Daniel Boulud or Jessica Biel. They’ve all been sued by their employees for allegedly pocketing tips in what is rapidly becoming one of today’s most heavily litigated areas of law. The law is confusing and, up until a few weeks ago, was silent on a key issue that spurred an interpretation dispute between the Department of Labor (DOL) and federal courts that spanned almost a decade.
But on March 23rd, the cobwebs were officially cleared. Tucked deep within the new congressional spending bill is a provision that both clarifies and significantly changes how tips can be allocated. Let’s break down what you need to know to prevent violations and the $1,100 fines they now come with.