Labor Dept. Scraps 80/20 Rule Guidance for Tipped Workers
The Wage and Hour Division withdrew three decades-old opinion letters and clarified that no percentage cap governs non-tipped duties for tipped employees.
The U.S. Department of Labor's Wage and Hour Division issued Field Assistance Bulletin No. 2026-1 this week, withdrawing three opinion letters dating to 1979, 1980, and 1985 that had shaped federal policy on how tipped workers can be treated when they perform duties outside their tipped occupation.
The bulletin follows a 2024 federal court ruling that struck down the department's 2021 dual jobs final rule. After that decision, the agency removed the regulatory language introduced in 2021 and restored the original dual jobs framework established in 1967. The three opinion letters were pulled because they no longer reflect departmental policy or the agency's interpretation of the Fair Labor Standards Act.
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Central to the new guidance is the elimination of the so-called 80/20 rule, a percentage-based threshold that had restricted the share of time a tipped employee could spend on related, non-tipped tasks. The division had already removed 80/20 guidance from its Field Operations Handbook in January 2025. The new bulletin makes explicit that no current Wage and Hour Division guidance imposes such a percentage limit.
Under the reinstated 1967 regulations, the operative question is whether the duties in question are related to the employee's tipped occupation — not how much time is spent performing them. The shift represents a significant change in how employers in the restaurant and hospitality industries should evaluate scheduling and pay practices for tipped staff.
The Labor Department also disclosed that it is developing a notice of proposed rulemaking to further amend FLSA regulations covering tipped employees and will accept public comments once that proposal is published. Continue reading at DOL News Releases and Briefs.
