Employers Should Be Wary Of DOL's Eased Tip Rule

Law360 (April 16, 2020, 4:46 PM EDT) -- For over 30 years, the U.S. Department of Labor took the position that an employer must pay its tipped employees the minimum hourly wage, without being permitted to take a tip credit, for time spent on work that doesn't generate gratuities when those untipped duties consume more than 20% of the employee's time.

At the end of 2018, however, the DOL reversed its position on the so-called 80-20 Rule in guidance allowing employers to apply a tip credit to tipped employees' wages regardless of the amount of time spent on untipped work. In October 2019, the DOL went a step further,...

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