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ARTICLE · 30 DECEMBER 2020

Sharing Is Caring: DOL Expands Tip Pool And Dumps 80/20 Rule

Ford Harrison LLP
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On Tuesday, December 22, 2020, the U.S. Department of Labor (DOL) announced its final rule regarding expansion of tip pool sharing and limitations on the 80/20 rule.

United StatesEmployment and HR
Luis A. Santos
Luis A. Santos
Cymoril White
Cymoril White
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Executive Summary:  On Tuesday, December 22, 2020, the U.S. Department of Labor (DOL) announced its final rule regarding expansion of tip pool sharing and limitations on the 80/20 rule. This long-awaited final rule codifies three main points: employers are (1) 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, (2) prohibited from allowing management from keeping employees' tips or participating in tip-pooling arrangements, and (3) permitted to take a tip credit regardless of the amount of non-tip generating work (such as cleaning tables or rolling silverware) 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.

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