The Fate of the DOL’s 80-20 Rule: Will the 80-20 Rule Survive?

Douglas, Jeff - 300dpi
Jeffrey Douglas

The U.S. Department of Labor’s (“DOL”) “80/20 Rule” has caused significant anxiety and concern for employers in the restaurant industry and other industries with tipped employees.  A recent spate of nation-wide class action litigation is leading to record-setting settlements for restaurant employers.  However, in a recent lawsuit filed in the Western District of Texas, Restaurant Law Center, et al. v. United States Department of Labor, 18-cv-567 (W.D.Tex.), national and local restaurant groups hope to bring an end to this wave of litigation by seeking to invalidate the 80/20 Rule. Continue reading

Ninth Circuit Creates More Uncertainty in 80/20 Rule for Tipped Workers

Executive Summary: On February 16, 2018, the United States Court of Appeals for the Ninth Circuit granted en banc review of Marsh v. J. Alexander’s LLC, 869 F.3d 1108, creating a new layer of uncertainty for hospitality employers. The previous decision by a three-judge panel on September 6, 2017, had rejected what is commonly called the “80/20 rule,” which states that hospitality employers may not reduce a tip-earning employee’s hourly pay below the minimum wage when that employee spends more than 20 percent of his or her workweek on non-tip-earning tasks. The case will now be reconsidered by a larger panel of the Ninth Circuit, with oral argument scheduled for the week of March 19, 2018. The grant of en banc review suggests an intention to reconsider the panel’s prior holding or analysis.

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