The U.S. Labor Department has withdrawn three longstanding opinion letters that limited the duties that tipped employees may perform while their employers take a tip credit under the Fair Labor Standards Act. This action brings DOL’s older tip-credit guidance into line with its current interpretation of the FLSA.
In a Field Assistance Bulletin issued October 19, DOL states that the opinions issued between 1979 and 1985 no longer reflect its policy and, in some respects, state the law inaccurately. DOL also confirms that it no longer supports guidance imposing specific time limits on duties performed within a tipped occupation. The bulletin follows a 2024 decision in which the Fifth Circuit invalidated DOL’s 2021 “80/20” rule.
The withdrawal of these opinion letters further dismantles the federal 80/20 framework. DOL says the FLSA focuses on whether an employee is engaged in a tipped occupation, not whether each individual task produces tips or consumes a particular percentage of the workday. However, an employer still cannot take a tip credit for the time that an employee spends working in a separate, non-tipped occupation.
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