Department of Labor Withdraws Guidance on "80/20 Rule" for Tipped Employees

The Department of Labor has formally withdrawn its guidance underlying the "80/20 rule" for tipped employees. This former rule generally required employers to pay the full federal minimum wage for non-tip-producing work if it exceeded 20% of an employee's working time. With the withdrawal, employers may now pay the federal tipped wage of $2.13 per hour for such duties, with tips making up the remainder of the $7.25 minimum wage, potentially reducing direct wages for workers spending substantial time on side tasks.