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Federal Government Officially Rescinds "80/20 Rule”

Brands with operators across states should consider compensation structures that accommodate all local laws

By Emily ClouseStaff Writer
3:15PM 02/18/19

The U.S. Department of Labor recently issued an official update to the “80/20 rule,” which prohibited paying employees, such as restaurant servers, subminimum wage for side work that’s not tipped, according to an article by Nation’s Restaurant News.

The article notes the Department of Labor announced its plans to revise the rule back in November. The original Obama-era interpretation said that employees who spent more than 20 percent of work hours on tasks that were not tipped could not be paid less than minimum wage for that time, according to the article. Such duties for servers at franchise restaurants, for example, are rolling silverware, food prep and other common “side work.”

Roy Salins, a labor attorney in New York, told Nation’s Restaurant News that large restaurant companies with operations in a number of states, like many franchises, should consider having an overarching wage structure that accommodates all jurisdictions due to varied state-based and local regulations around the country. The article notes that some states such as New York have adopted their own 80/20 laws.

Read the full article