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Federal Register / Vol. 86, No. 183 / Friday, September 24, 2021 / Rules and Regulations willful violations, and reproposed those portions with modifications to further align the regulations with Supreme Court and appellate court decisions and provide improved guidance on circumstances where employers conduct may be willful. Finally, the Department requested comment on whether to revise the 2020 Tip final rules language regarding managers or supervisors, which went into effect on April 30, 2021, to better address the fact that some managers and supervisors perform tipped work.7
The 60-day comment period for the NPRM ended on May 24, 2021. The Department received 33 unique comments from various constituencies including small business owners, worker advocacy groups, employer and industry associations, non-profit organizations, law firms, attorneys general, and other interested members of the public. All timely received comments may be viewed on the regulations.gov website, docket ID
WHD20190004. The Department has considered the timely submitted comments addressing the proposed changes and discusses significant comments below.
The Department also received a small number of comments on issues that are beyond the scope of this rulemaking.
These include, for example, comments suggesting that the amount of the federal minimum wage should be increased, and comments requesting that the Department revise the regulatory definition of managers or supervisors that cannot keep employees tips to include a salary component. The Department does not address those issues in this final rule.
III. Final Regulatory Revisions A. Civil Money Penalties for Violations of Section 3m2B
The CAA amended FLSA section 16e, which establishes CMPs for certain violations of the Act, to add new penalty language for employers who violate section 3m2B by keeping employees tips. 29 U.S.C. 216e2.
This provision states that: Any person who violates section 3m2B shall be subject to a civil penalty not to exceed $1,100 8 for each such violation, as the 7 The Department also asked questions about how it might improve the recordkeeping requirements in the 2020 Tip final rule in a future rulemaking.
8 The CMP amount in the 2020 Tip final rule was adjusted to $1,162 for inflation, as required by the Federal Civil Penalties Inflation Adjustment Act of 1990 Pub. L. 101410, as amended by the Debt Collection Improvement Act of 1996 Pub. L. 104
134, sec. 31001s and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015
Pub. L. 11474, sec. 701.

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Secretary determines appropriate, in addition to being liable to the employee or employees affected for all tips unlawfully kept . . . . Unlike the statutory provisions in section 16e2
setting forth CMPs for minimum wage and overtime violations, the statute does not limit the assessment of CMPs to repeated or willful violations of section 3m2B. Instead, the penalty language subjects persons who violate 3m2B
to civil penalties as the Secretary determines appropriate.
Although the 2020 Tip final rule acknowledged the Departments discretion to assess CMPs for any violation of section 3m2B, the 2020
Tip final rule limited this discretion by restricting CMPs to only repeated or willful violations of section 3m2B.
In the CMP NPRM, the Department proposed to withdraw the 2020 Tip final rule CMP provisions for violations of 3m2B and adopt regulatory language in 29 CFR 578.3, 578.4, 579.1, 580.2, 580.3, and 580.12 that retains the full discretion granted to the Secretary to assess CMPs for any violation of section 3m2B. The Department also proposed to adopt the same rules, procedures, and amount considerations for CMP assessments applicable to violation of section 3m2B as the Department applies to other FLSA CMP
assessments.9 These procedures are found in 578.3, 578.4, 579.1, 580.2, 580.3, and 580.12.
Many commenters, such as the National Partnership for Women &
Families and the Employee Rights Center, supported the proposal, stating that it aligns with the plain language of the FLSA and Congresss legislative intent. Several commenters that supported the proposal noted that it preserved the full discretion the statute grants to the Department to assess CMPs for violations of section 3m2B. The AG Coalition noted that by including regulatory language in the proposal that differentiates between violations of section 3m2B and repeated or willful minimum wage and overtime violations, the Department retains its discretion to levy CMPs against employers that violate the FLSA, as intended by Congress and limited only by the statute. Texas RioGrande Legal Aid stated that the discretion permitted by the proposal would mean that DOL
investigators will have more tools at 9 In the 2020 Tip final rule, the Department similarly adopted the same rules, procedures, and considerations applicable to CMP assessments for violations of section 3m2B as the Department applies to other FLSA CMP assessments. As explained above, the Department proposed to withdraw those provisions, which have not gone into effect.

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their disposal to help workers and argued that the Department should not hamper its own investigations by restricting such discretion.
Other commenters opposed the proposal. The National Restaurant Association NRA stated that the Department should instead retain the 2020 Tip final rule requirement that the Department would only assess CMPs for repeated and willful violations of section 3m2B, noting that the Department had previously explained that this limitation was consistent with how the Department enforces other FLSA wage violations. The NRA also argued that making such a differentiation between violations of sections 6 and 7 and violations of section 3m2B will destroy the public trust. The Department disagrees.
The statute itself distinguishes between violations of sections 6 and 7 and violations of section 3m2B with regard to the assessment of CMPs. Thus, removing the 2020 Tip final rules repeated or willful requirement for section 3m2B CMPs is consistent with the FLSA itself. Moreover, the Departments enforcement of different sections of the FLSA currently varies depending on whether the statutory text limits CMPs to repeated or willful violations or not. The child labor provisions of the FLSAlike the statutory text for violations of section 3m2Bdo not limit CMPs to repeated or willful violations. Compare 29 U.S.C. 216e1Ai Any person who violates the provisions of sections 212 or 213c of this title, relating to child labor . . . shall be subject to a civil penalty . . . for each employee who was the subject of such a violation with 29 U.S.C.
216e1Aii CMPs for violations that caused the death or serious injury of a child employee may be doubled where the violation is a repeated or willful violation. The Departments final rule will bring the assessment of section 3m2B CMPs into harmony with the statutory text, as is currently the case with the child labor CMP provisions.
Furthermore, this final rule adopts the same rules, procedures, and amount considerations for determining section 3m2B CMPs that the Department uses to determine CMPs for other FLSA
wage violations. Therefore, the final rule will preserve consistent enforcement procedures familiar to the Department and the public.
The National Federation of Independent Businesses NFIB also opposed the proposal. Recognizing that the statute vests wide discretion in the Secretary of Labor, NFIB asked the Department to keep the repeated or
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