REUTERS/Andrew Kelly

Labor Dept. revives ’80/20 rule’ for paying tipped workers

Oct 28 – The U.S. Division of Labor on Thursday issued a remaining rule limiting when employers pays workers the decrease tipped minimal wage for performing non-tipped duties, reversing a Trump-era regulation favored by enterprise teams.

The rule from DOL’s Wage and Hour Division (WHD) says workers can solely be paid the tipped minimal, which is presently $2.13 an hour below federal legislation, for duties that immediately help tipped work and don’t take up greater than 20% of a employee’s time or 30 consecutive minutes.

The so-called “80/20 rule” was first adopted by DOL in 1988. Through the Obama administration the company expanded the sorts of duties that weren’t deemed to immediately help tipped work below the federal Truthful Labor Requirements Act.

The Trump administration finalized a rule final December that scrapped the 80/20 regulation and mentioned employers pays the tipped minimal wage for nontipped duties carried out contemporaneously or instantly earlier than or after workers’ main tipped duties, no matter how a lot time they take.

Main enterprise teams backed the Trump-era rule, saying that maintaining observe of the exact period of time workers spent on totally different duties was unworkable. However employee advocates claimed the adjustments would value tipped workers a whole bunch of thousands and thousands of {dollars} in wages.

The brand new rule takes impact on Dec. 28. WHD estimated that the rule would value employers $183.6 million per yr on common over the subsequent decade.

Jessica Looman, the appearing administrator of WHD, famous in a press release that greater than half of all tipped workers are girls, folks of coloration, or immigrants.

“Today’s final rule enhances protections for this vital segment of the nation’s essential workforce, and combats income disparity and promotes equity,” Looman mentioned.

However Shannon Meade, vp of the Nationwide Restaurant Affiliation, mentioned the rule will create mass confusion and massive compliance challenges for eating places, notably amid the busy vacation season.

“This rule does not provide the clarity that small business owners and their employees need and is likely to increase litigation around the issue,” Meade mentioned in a press release.

WHD final month adopted a separate rule restoring the company’s skill to levy financial penalties on employers who pocket workers’ suggestions, even when the violations are usually not willful.

That rule withdrew a Trump-era regulation that permitted DOL to difficulty penalties of $1,100 per violation solely when employers have been discovered to have purposely or repeatedly not paid workers the total suggestions they earned.

(Editor’s Be aware: This text has been up to date to incorporate a press release from the Nationwide Restaurant Affiliation).

Daniel Wiessner

Dan Wiessner (@danwiessner) experiences on labor and employment and immigration legislation, together with litigation and coverage making. He might be reached at [email protected]