Alaska Labor Department Protects Employees' Right To Keep Income Earned Through Tips

Jun. 21, 2018
No. 18-29

JUNEAU, Alaska — The Alaska Department of Labor and Workforce Development has finalized regulations to protect employees' right to keep the tips they receive on the job. The new regulations, which go into effect June 29, prohibit employers from redistributing tipped employees' tips among other workers.

"Employers should not be allowed to confiscate tips," said Labor Commissioner Heidi Drygas. "These regulations ensure individuals working in Alaska continue to have the right to keep the income they earn through tips."

In 2017, the United States Department of Labor proposed regulations that would allow employers to take a portion of tipped wages away from tipped workers. These regulations were referenced in Alaska's Administrative Code. In an effort to maintain current employee protections, the Alaska Department of Labor and Workforce Development developed regulations that would preserve the protection in Alaska. These regulations will only allow employers to redistribute tips among other tipped employees, and not to other workers or to management.

In 2018, Congress passed a law prohibiting employers from taking employees' tips. However, this law would still allow employers to redistribute those tips to non-tipped employees. According to the National Employment Law Project, this would likely lead to reductions in wages of tipped workers with a transfer in wealth from those "front of the house" workers.

The new regulations protect the wages of hard-working servers and the expectations of customers who presume the tips they give belong to the recipient. This regulation does not limit or prohibit the voluntary sharing of tips by employees, which is a common practice in many establishments.

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