Labor Dept. Withdraws Three Tipped-Employee Opinion Letters, Drops 80/20 Rule
The Wage and Hour Division issued a new bulletin aligning tipped-employee guidance with reinstated 1967 dual-job regulations after a 2024 court ruling.
The U.S. Department of Labor's Wage and Hour Division issued Field Assistance Bulletin No. 2026-1 this week, withdrawing three decades-old opinion letters governing tipped employees and formally abandoning the percentage-based standard long known as the 80/20 rule.
The bulletin retracts opinion letters from 1979, 1980, and 1985, which the agency said no longer reflect its policy or its interpretation of the Fair Labor Standards Act. Under the reinstated framework, the determining factor is whether a worker's non-tipped duties are related to the employee's tipped occupation — not how much time is spent on those duties.
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The policy shift follows a 2024 federal court decision that vacated the department's 2021 dual jobs final rule. After that ruling, the agency removed regulatory text introduced under the 2021 rule and restored the original dual jobs regulations dating to 1967. The Wage and Hour Division had already removed its 80/20 guidance from its Field Operations Handbook in January 2025.
The new bulletin makes explicit that no current Wage and Hour Division guidance relies on the former time-based threshold. The handbook, the division said, is now fully consistent with the reinstated 1967 regulations, providing uniform direction to agency investigators and employers across the tipped-worker sector.
Looking ahead, the department said it is developing a notice of proposed rulemaking to amend various FLSA tipped-employee regulations and will accept public comment once that proposal is published. Continue reading at DOL News Releases and Briefs.
