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The 80/20 Tip Credit Rule Still Stands

By August 2, 2023August 22nd, 2023HR, IRS, Legal, Payroll, Tips

A server calculating her tips

In July, a federal court refused to block the U.S. Department of Labor (DOL)’s “80/20 rule,” which applies to employers taking the tip credit toward their federal minimum wage obligations.

The DOL rule is intended to limit the amount of non-tip producing work that a tipped employee can perform when an employer is taking a tip credit. Here is a good article on the 80/20 rule from Fisher Phillips that restaurant owners should read to make sure that their wage and hour practices are compliant and that they are reporting gratuities correctly.

It’s important for restaurants to structure job descriptions carefully and keep track of the tasks assigned to service workers so that they don’t violate the law.

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