How Advanced Technology Can Foster a Fair Environment Amid New Tipping Regulations

The proposed changes to restaurant tipping regulations under the Fair Labor Standards Act (FLSA) that are in consideration with the U.S. Department of Labor have sparked intense reaction among restaurants and labor advocates. The regulations would eliminate the “80/20” rule that previously mandated employees earning a tipped minimum wage could only spend 20 percent of their shift performing non-tipped tasks. In addition, restaurant owners would be able to utilize all tips earned from service staff to redistribute this income amongst the entire operating team – enabling operators to establish non-traditional gratuity pools that can now be used to create higher wages for back-house staff such as line cooks, dishwashers and janitorial without increasing their operational labor spend.

On March 25, the Wage and Hour Division of the Department of Labor proposed an eight-month delay for the effective date of the regulations, which would put them into effect on December 31, 2021, in…