Department of Labor Proposes Delay on Tip Regulations and Independent Contractor Rule
Department of Labor Proposes Delay on Tip Regulations and Independent Contractor Rule

On February 5, 2021, the Department of Labor (DOL) published two notices of proposed ruling to delay the effective date of two rules finalized by the DOL under the Trump Administration regarding tips and independent contractor rules. The proposed delays are designed to allow the DOL “additional opportunity for review and consideration” of both rules.

The first rule is Tip Regulations Under the Fair Labor Standards Act (“Tip Regulations”), which was published on December 30, 2020, and set to go into effect on March 1, 2021. The proposed rule would delay the effective date of the Tip Regulations to April 30, 2021.  Members of the public are invited to comment on the proposed delay through February 17, 2021.

The second rule is entitled Independent Contractor Status Under the Fair Labor Standards Act (“Independent Contractor Rule”), which was published on January 7, 2021, and set to go into effect on March 8, 2021. The proposed rule would delay the effective date of the Independent Contractor Rule to May 7, 2021. Members of the public are invited to comment on the proposed delay through February 24, 2021.

The DOL’s delay is in accordance with President Biden’s January 20, 2021 directive for agencies to issue a “Regulatory Freeze Pending Review” of agency actions.

As we have noted in previous posts, California has its own rules about independent contractors and tip pooling, which must be followed by companies operating in the state.

  • Pooja S. Nair
    Partner

    Pooja S. Nair is a business litigator and problem solver with a focus on the food and beverage sector. She advises food and beverage clients, startups and other businesses on a comprehensive range of issues, including employment ...

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