DOL withdraws three opinion letters behind 80/20 rule for tipped employees
Key points
- DOL issued Bulletin 2026-1 withdrawing three opinion letters that supported the 80/20 rule
- A federal appeals court struck down the rule in August 2024; DOL dropped the guidance in January 2025
- DOL is developing a proposed rule on tipped employees; state requirements may be stricter
The U.S. Department of Labor (DOL) issued Field Assistance Bulletin No. 2026-1, withdrawing three opinion letters that supported the 80/20 rule for tipped employees. The rule limited employers' tip credit for time spent on related non-tipped duties exceeding 20% of the workweek. A federal appeals court struck down the rule in August 2024, and DOL removed the guidance from its handbook in January 2025. DOL is developing a proposed rule on tipped employees, and state requirements may be stricter.
What employers should do
- Review tipped employees' non-tip work time records and confirm whether tip credit calculations still rely on the withdrawn 80/20 rule
- Monitor DOL's proposed rule on tipped employees and stricter state requirements
Policy details
- Jurisdiction
- Federal
- Status
- In effect
- Effective date
- —
- Employers covered
- U.S. employers that employ tipped employees and claim a tip credit
- Official source
- View official source ↗
Original report: HRMorning ↗Edited with AI assistance. Facts are based on official sources and original reports. For information only; not legal, immigration or insurance advice.