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Showing 1 post in Fair Labor Standards Act (FLSA).

Department of Labor Ends 80/20 Rule for Tipped Employees

Posted In Department of Labor ("DOL"), Fair Labor Standards Act (FLSA)

On November 7, 2018 the U.S. Department of Labor issued an advisory opinion letter, FLSA 2018-17, that amends previous guidance regarding the “tip credit provision,” sometimes known as the 80/20 rule. The “tip credit” provision addressed the payment of minimum wage and applies to employees of a business that usually receive at least $30 per month in tips. These “tipped employees” are not required to be paid federal minimum wage (currently $7.25 per hour), but instead, only $2.13 per hour. In 2011, the Department of Labor had issued an opinion rescinding a 2009 opinion and instituting what has colloquially been called the “80/20 rule.” By FLSA 2018-17, the Department of Labor fully reinstated the prior 2009 determination, which will have far reaching consequences for employers of “tipped employees.” More >

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