The Department of Labor Eliminates the 80/20 Rule for Tipped Employees
Last month, the United States Department of Labor (DOL) issued an opinion letter eliminating the “80/20” rule for tipped employees . Under the Fair Labor Standards Act, employers can take a “tip credit,” which allows them to pay employees who receive tips less than the minimum wage, as long as their tips will increase their hourly rate to more than the minimum wage. The 80/20 rule prohibited employers from taking a tip credit if an employee who performed tipped and non-tipped work spent more than 20 percent of his or her time engaging in non-tipped work. The Department of Labor rescinded that rule and said that it will consider an employee to be engaging in work for which the tip credit is permitted if that employee engages in activities that are directly related to tip-producing activities. You can see that list of activities by clicking here . So, for example, filling salt shakers and cleaning up tables would be activities that are directly related to tipped work, and therefore...