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

New Jersey Enters Partnership with USDOL To Fight Worker Misclassification

new jersey signExecutive Summary: Just months after New Jersey Governor Phil Murphy signed Executive Order No. 25 establishing a task force to combat employee misclassification, the NJ Department of Labor and Workforce Development (LWD) entered into a cooperation agreement with the US Department of Labor (USDOL) to work together to fight worker misclassification. Continue reading

DOL Issues Guidance to Aid in the Classification of Home Care Workers

Adams, Julie 300dpi
Julie Adams

Executive Summary: On July 13, 2018, the United States Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) aimed at clarifying the standard utilized to determine if home care workers qualify as employees or joint employees under the Fair Labor Standards Act (“FLSA”).  Over the past few years, the DOL has issued and then withdrawn guidance regarding the proper standard and evaluation of home worker classification, leaving uncertainty for the industry.  The new guidance provides clarity on the subject and provides home care registries a road map for proper classification.

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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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Eleventh Circuit Allows Employer to Share Employee’s Tips as Long as It Pays Employee Minimum Wage

Federal regulations currently treat tips as the employee’s property, regardless of whether the employer pays that employee the minimum wage or whether it uses a tip credit to satisfy the minimum wage requirement. Recently, the federal Department of Labor (DOL) proposed a rule that, if passed this year, would allow employers to require the sharing of tips with employees who do not customarily receive direct tips (such as restaurant cooks, dish washers, and similar workers), so long as the employer pays employees the full federal minimum wage of $7.25 per hour. Employers who use the tip credit option to satisfy the minimum wage obligation would not be allowed to require tip sharing with workers who do not customarily receive tips.

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