Skip to main content

Department of Labor Rescinds The 80/20 Rule For Tip Guidance


Last week, the Department of Labor issued an opinion letter in which it rescinded guidance that said tipped workers that are paid less than minimum wage must spend most of their time performing tipped-wage duties.  That guidance, implemented during the President Barack Obama era Department of Labor (often referred to as the 80/20 rule) required that the tipped workers spend 80% of their time performing tipped-wage duties such as waiting tables rather than folding napkins or cleaning dishes.

In its letter, the Department of Labor noted that it intended to clarify the Field Operations Handbook section 30d00(e), which previously had resulted in some confusion and inconsistent application.  With the issuance of its opinion letter, the Department of Labor stated that the letter was intended to clarify FOH section 30d00(e) in a manner that not only ensured consistent application of the Fair Labor Standards Act ("FLSA") but also gave employers a level of clarity to determine whether their actions were in compliance with the FLSA and provided workers full protection under the FLSA as well.

In its letter, the Department of Labor said it did not "intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with customer service duties."  In doing so, twenty five "acceptable" tasks were identified for tipped workers to perform.

This opinion letter comes on the heels of a July 2018 lawsuit filed by the National Restaurant Association that argued the guidance previously in place placed a burden on restaurant owners.  The lawsuit argued the 80/20 rule was "an arbitrary number to deal with."  As well, it was argued that when the President Obama era Department of Labor added the 80/20 rule, it did so "quietly" and  without notice to the public or an opportunity to respond.  However, workers and their advocates argued that getting ride of the 80/20 rule would allow businesses to take advantage of workers by paying them a sub-minimum wage even if they were not receiving frequent tips.

As of this writing, the National Restaurant Association is apparently still moving forward with its lawsuit.


For a copy of the Department of Labor's opinion letter:  https://www.dol.gov/whd/opinion/FLSA/2018/2018_11_08_27_FLSA.pdf

Comments

Popular posts from this blog

NLRB: Discussion Among Employees About Tip Pooling is Protected Concerted Activity

  This Advice Memorandum from the National Labor Relations Board’s Associate General Counsel, Jayme Sophir, addressed whether employees which discussed and complained about tip pooling at work constituted protected concerted activity. In relevant part, an employer in New York operated a chain of steakhouses.  While tip pooling was in place at these steakhouses, some of the employees objected to it on the grounds that it was not transparent and improperly divided tips among the workers.  Employees were told not to complain or talk to each other about the tip pool and were told that doing so would endanger their jobs.  Despite the employer later attempting to provide some clarity as to how the tips were being divided, rancor still existed among some employees.  At one point, the employees were told by a general manager that some employees that had been talking about the tip pool were “cleared out” and the employer would continue to do so. In the Advice Memorandum,...

Breaking: Labor Secretary Rumored to Be Leaving Administration

A few hours ago, word leaked out that Labor Secretary Marty Walsh (“Walsh”) is in the midst of negotiations to head up the NHL Players Union and leave his position at the Labor Department. Walsh, who has served as the sole Labor Secretary under President Biden, has taken part in a labor renaissance of sorts as support for organized labor has increased during his term as Labor Secretary (although the number of workers that have joined a union over the past two years has not grown as mush as some expected.)  He has also overseen the ongoing negotiations with rail workers over a new contract, although that matter is still on shaky ground and playing out as we speak. As for who might step into the vacant Labor Secretary role, there are already rumblings that President Biden should nominate Deputy Labor Secretary Julie Su (a strong labor advocate) or even a progressive like Senator Bernie Sanders.  Until Walsh officially gives his notice, however, I would expect some/many potential...

San Diego Rolls Back Vaccine Mandate For City Workers

Last Tuesday, the San Diego City Council voted to do away with the vaccine mandate for city employees. The city’s vaccine mandate that was in place required city workers to get the coronavirus vaccine or risk termination.  Perhaps to this surprise of no one, the city’s policy came under fire with 14 employees being terminated and over 100 other employees resigning.  With the coronavirus subsiding, including in Southern California, the San Diego City Council took action. Now, bear in mind, the repeal of the vaccine mandate does not take place immediately. With that being said, the mandate will be repealed March 8th.  I suppose the question now is, what other cities or regions follow San Diego’s lead? For additional information:   https://www.sandiegouniontribune.com/news/politics/story/2023-01-24/san-diego-repeals-controversial-covid-19-vaccine-mandate-citing-drop-in-cases-hospitalizations