20% Rule Rescinded with FLSA2018-27

Yes, it’s true. The Department of Labor issued guidance November 8, 2018 regarding “Side Work” and the FLSAs Restaurant Tip Credit (29 CFR 531.59 The Tip Wage Credit, Section 3(m)  Osha Safety and Health Act). They reissued Opinion Letter FLSA2009-23, gave it a new name, FLSA2018-27. 

Per  Epstein Becker Green (2018)Epstein Becker Green (2018), the guidance “clarifies that employers may pay a tipped wage when employees engage in side work so long as the side work occurs contemporaneously with, or in close proximity to, the employees’ normal tip-generating activity. This opinion letter should put an end to the many pending cases, including numerous class actions, that depend on the 20% standard.”

 

Source
29 CFR § 1902.31

 


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