Tips from the DOL on Tipped Employees

On November 8, 2018, the DOL reissued Opinion Letter FLSA2018-27 which had been rescinded in 2009. The reissued Opinion Letter announces the DOL’s position on dual jobs and related duties under Section 3(m) of the FLSA. The DOL admitted that its Field Operations Handbook (“FOH”) sections addressing the tip credit have resulted in some confusion and inconsistent application. To provide clarification, the DOL rescinded the so-called 80/20 rule and plans to revise the FOH.

The DOL announced: “We do not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the act are met.”

“The determination that a particular duty is part of a tipped occupation should be made based on the following principles:

  • Duties listed as core or supplemental for the appropriate tip-producing occupation in the Tasks section of the Details report in the Occupational Information Network (O*NET) or 29 CFR § 531.56(e) shall be considered directly related to the tip-producing duties of that occupation. No limitation shall be placed on the amount of these duties that may be performed, whether or not they involve direct customer service, as long as they are performed contemporaneously with the duties involving direct service to customers or for a reasonable time immediately before or after performing such direct-service duties.
  • Employers may not take a tip credit for time spent performing any tasks not contained in the O*NET task list. We note, however, that some time spent by a tipped employee performing tasks that are not listed in O*NET may be subject to the de minimis rule contained in the Wage and Hour’s general FLSA regulations at 29 CFR § 785.47.”

Keep an eye out for the DOL’s revised FOH on this issue.

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