Appeals Court Strikes Down Onerous 80/20/30 Tip Credit Rule: 7 …

Aug 26, 2024 · A federal appeals court just delivered some good news to hospitality employers by blocking the Department of Labor’s infamous 80/20/30 rule, providing immediate relief to …

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DOL Withdraws Tipped-Wage Rule - Lexology

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1 day ago · The now vacated and withdrawn rule, which was known as the “80/20/30,” “80/20,” or “20%” rule, identified three categories of work: Tip-producing… Toggle navigation Search

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FAQs about Appeals Court Strikes Down Onerous 80/20/30 Tip Credit Rule: 7 … Coupon?

What is the 80/20/30 tip rule?

That rule identified three categories of work: “not part of the tipped occupation” – work that is neither tip-producing nor directly supporting. Under the 80/20/30 Rule, any time spent in the third category (tasks not part of the tipped occupation) had to be compensated at full minimum wage (i.e., no tip credit could be taken). ...

Who vacated the 80/20/30 rule?

On August 23, 2024, in Restaurant Law Center v. U.S. Department of Labor, the U.S. Court of Appeals for the Fifth Circuit vacated the U.S. Department of Labor’s so-called “80/20/30 Rule” that governed how tipped employees must be paid under the Fair Labor Standards Act (FLSA). ...

Did Dol vacate a tipped employee rule?

The 5th U.S. Circuit Court of Appeals has vacated a U.S. Department of Labor (DOL) rule that regulated the payment of tipped employees under the Fair Labor Standards Act (FLSA). The court determined the rule did not align with the language of the FLSA. We’ve gathered articles on the news from SHRM Online and other outlets. ...

What is a tip rule & how does it work?

That rule, which first appeared in the DOL’s field handbook in 1988, limits the amount of time an employee may spend on work that is not tip-producing to 20% of the employee’s hours in a given workweek, while still allowing the employer to take the tip credit. ...

Will a DOL rule disallow a tip credit?

The decision will be welcome news to hospitality employers who have long struggled with implementing the DOL’s final rule that disallowed the tip credit if employees spent too much time performing duties related to their so-called tip-producing duties (such as a server who also wipes tables or toasts bread). ...

What is the 80/20/30 rule?

The vacated rule, called the 80/20/30 rule, identified three categories of work: Tip-producing work that provides service to customers for which tipped employees receive tips. Directly supporting work performed in preparation of or to otherwise assist tip-producing customer service work. ...