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Biden DOL issues NPRM to reinstate the so-called “80/20” Rule”

Updated: Jun 25, 2021

The U.S. DOL just issued a proposed rule that seeks reinstate the Obama-era 80/20 interpretation of the Department’s dual jobs regulation to address the application of the FLSA’s tip credit to tipped employees who perform both tipped and non-tipped duties. Specifically, it proposes that if an employee performs work that directly supports tip-producing work for a substantial amount of time – that exceeds 20 percent of all of the hours worked during the employee’s workweek or exceeds 30 continuous minutes – “that worker is no longer performing labor that is part of the tipped occupation.” The proposal goes on to clarify that employers may not take a tip credit for work that is not part of the tipped occupation.

The Association is on record opposing the arbitrary “80/20” rule and was strong proponent of the Trump DOL final rule that restored much needed clarity to employers and employees regarding the dual jobs function. Assigning arbitrary caps and attempting to micromanage restaurant work at the level of task assignment has led to mass compliance burdens and unnecessary and costly litigation. Restaurants attempting to emerge from the pandemic on solid footing should not be saddled with impossible compliance and legal challenges that the reinstatement of this so-called rule would create. The Association will file comments, which are due on August 23, 2021.

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