Under the FLSA tips are the property of the employee; employers (including managers/supervisors) may not keep employees’ tips. An employer may take a tip credit only if it meets notice and recordkeeping rules, and tip pools are allowed only among employees who customarily and regularly receive tips (unless the employer pays full minimum wage).
The Wage and Hour Division (WHD) is the DOL office that enforces the FLSA and related laws; it has statutory authority to investigate employers, require records, assess civil money penalties for violations and recover unpaid/back wages on behalf of workers.
When WHD finds unpaid wages it calculates back pay by comparing required pay under the law (minimum wage, overtime, etc.) to amounts actually paid, notifies affected workers, and holds collected wages until claimants submit the Back Wage Claim Form (WH‑60) and identity documents; WHD processes claims (about six weeks) and issues payment electronically or by check; unclaimed funds are held up to three years then sent to the U.S. Treasury.
PAID (Payroll Audit Independent Determination) is DOL’s voluntary self‑audit program that lets employers disclose and correct FLSA violations; if an employer self‑reports under PAID DOL can resolve back wages with reduced enforcement exposure and avoid litigation but may still require payment of owed wages and any applicable civil penalties per program terms.
The required FLSA poster (‘‘Employee Rights under the Fair Labor Standards Act’’) explains minimum wage, overtime and tip rules; employers must display it in a conspicuous place at the workplace where employees can readily see it (physical or electronic where applicable).
Use WHD’s Workers Owed Wages (WOW) search: enter your employer’s name, verify your name if listed, submit contact info to receive Back Wage Claim Form (WH‑60), upload ID and documentation via login.gov; WHD processes claims (about six weeks) and then pays claimants.
Penalties vary: for willful or repeated violations of minimum‑wage/overtime (29 U.S.C. §206/207) WHD can seek civil money penalties (CMPs) that are adjusted annually (example: up to $2,515 per violation in 2025); tip‑keeping violations under 29 U.S.C. 203(m)(2)(B) carry separate CMPs (e.g., $1,409 in 2025); posting violations can have smaller per‑offense fines (about $216 in 2025); criminal fines/imprisonment are possible for willful violations in limited cases under 29 U.S.C. §216.