DOL lifts its 80-20 rule for tipped employees
The Fair Labor Standards Act sets a minimum wage, but it allows employers to take a credit, i.e., pay below the minimum wage, for tipped employees.
To prevent abuse of the tip credit, the DOL under President Obama announced its 80-20 rule, which provided that the tip credit was not available, i.e., the tipped employee must be paid the full minimum wage, if 20% or more of their time is spent performing non-tippped work.
Now, instead of placing a time limit on non-tipped work, the DOL will permit a tip credit if non-tipped work is “performed contemporaneously with direct customer-service duties and all other requirements of the Act are met.”
Source: DOL opinion letter no. FLSA2018-27 (11/8/18).