On February 15, the U.S. Department of Labor struck another nail
into the coffin of the infamous "20% Rule," the
agency's prior enforcement position which purported to limit an
employer's ability to take the federal Fair Labor Standards Act
tip credit. Under this rule, USDOL would not permit an employer to
take the tip credit if the tipped employee spent more than 20% of
his or her work time performing "related duties," meaning
duties that are not directly customer-facing or tip-producing, but
that are related to the tipped occupation (i.e. a server making
coffee or cleaning tables).
Previously, in November 2018, USDOL had announced via an
Opinion Letter that it was abandoning the 20% Rule and that it
would issue a revised Field Operations Handbook in the near future.
USDOL has now made good on its promise as the revised FOH no longer
contains the 20% limitation on the performance of "related
duties."
