Executive Summary: On Monday, October 7, 2019, the Department of Labor (DOL) proposed a new 80/20 rule and tip pooling regulation. First, the proposed regulation, if finalized, will permit employers to take a tip credit regardless of the amount of non-tip generating work (such as cleaning tables or folding napkins) a tipped employee performs as long as it is performed contemporaneously with his/her tipped duties, or within a reasonable time immediately before or after performing tipped duties. Second, the proposed regulation eliminates some regulatory restrictions regarding tip pooling when the employer does not take a tip credit. If the proposed rule is finalized, employers who do not take a tip credit will be permitted to include “back-of-the-house” employees who usually do not receive tips (such as cooks and dishwashers) as part of a tip pool. Lastly, the existing rule prohibiting employers from keeping employees’ tips or participating in tip-pooling arrangements will remain.
Home > Federal Law Articles > FLSA > Industries and Occupations > Department of Labor Deflates the 80/20 Rule & Inflates the Tip Pool