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DOL Discards ‘80/20’ Guidance for Tipped Employees

Thursday, November 15, 2018

(North American Meat Institute)

The Department of Labor (DOL) issued a new opinion letter rescinding the 20 percent limitation on the amount of time employees in tipped occupations can spend on non-tip-producing “sidework,” replacing it with a more flexible test. In removing strict time limits for “sidework,” the opinion letter defines “related duties” of tipped employees as those performed contemporaneously with direct customer-service duties, or for a reasonable time immediately before or after performing direct service duties, regardless of whether they involve direct customer service. The opinion letter provides employers taking a tip credit with some relief from the ’80/20’ guidance’s monitoring and tracking requirements, and consequent litigation. Employers are encouraged to carefully evaluate employee job duties before they change their methods of pay for tipped employees to ensure they are following Fair Labor Standards Act requirements and applicable state and local laws.

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