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Showing 1 post tagged Tip Credit.

Department of Labor Ends 80/20 Rule for Tipped Employees

On November 7, 2018 the U.S. Department of Labor issued an advisory opinion letter, FLSA 2018-17, that amends previous guidance regarding the “tip credit provision,” sometimes known as the 80/20 rule. The “tip credit” provision addressed the payment of minimum wage and applies to employees of a business that usually receive at least $30 per month in tips. These “tipped employees” are not required to be paid federal minimum wage (currently $7.25 per hour), but instead, only $2.13 per hour. In 2011, the Department of Labor had issued an opinion rescinding a 2009 opinion and instituting what has colloquially been called the “80/20 rule.” By FLSA 2018-17, the Department of Labor fully reinstated the prior 2009 determination, which will have far reaching consequences for employers of “tipped employees.” More >

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