The Office of Management and Budget is in the midst of finalizing the U.S. Department of Labor's (DOL) proposed rule to revise its standards for tipped workers. Among other things, the proposed rule is intended to prevent employers from keeping tips received by their employees. More specifically (and as reported in detail in our spring newsletter), the DOL said in the spring that it will also revise its existing tip credit rule as it pertains to dual jobs, which currently allows employers to pay employees who perform both tipped and nontipped duties at a lower tipped minimum wage for service work as long as they pay at least the full minimum wage for nontipped tasks.

Last November, the DOL published an opinion letter that rescinded the "80-20 rule" (which prohibited employers from paying tipped workers at a lower wage if they spent more than 20% of their time on nontipped side work). Since then, several federal courts have rejected the DOL's opinion letter. The proposed rule, which had been under review at the White House Office of Information and Regulatory Affairs (OIRA), was recently removed from the OIRA website. This typically signals that the final rule is a step closer to being published.

We – as well as many hospitality employers – continue to wait for clearer and more consistent guidance on these tip issues.

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