NEW RULE: DOL Eliminates “80/20” Tip Credit Rule

On November 8, 2018, the US Department of Labor issued a new Opinion letter (Opinion Letter FLSA 2018-27) wherein the DOL rescinded the 80/20 tip credit rule.  Under this rule, employers were not able to use the tip credit for tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties.

In lieu of this rule, the DOL has stated that ““We do 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 direct customer-service duties and all other requirements of the Act are met.”