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Quick Hits
- On December 17, 2024, the DOL issued a final rule amending the 2021 dual jobs rule to reflect changes in law following a Fifth Circuit ruling that reinstated the original 1967 dual-jobs regulation.
- Hospitality industry employers may want to note the 1967 dual jobs rule and the potential confusion caused by varying interpretations of the 80/20 rule, as well as state-specific laws.
On August 23, 2024, the Fifth Circuit vacated the 80/20 (and thirty-minute) rule. The court made clear its holding did not impact the validity of the 1967 dual jobs regulation, but it was unclear whether or not the court vacated the 2021 rule in its entirety as that would nullify the withdrawal of 2020 revisions to the dual jobs regulation. On October 29, 2024, the court revised its opinion to clarify that the corresponding regulatory text previously codified in the Code of Federal Regulations at 29 C.F.R. 531.56(e)–(f) was vacated and the original 1967 dual jobs regulation should be reinstated, rather than any other version of a dual jobs rule under prior administrations.
The amended dual jobs final rule simply reinstates the 1967 dual jobs regulatory text consistent with the court of appeals’ ruling. The newly reinstated text (29 C.F.R. 531.56(e)) explains that an employee who works as a maintenance worker and a server (i.e., working in a true dual jobs capacity where clearly no tip credit can be taken for work in the maintenance role) is distinguishable “from that of a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses.”
Employers may still want to note long-standing DOL subregulatory guidance that imposes a 20 percent threshold on time tipped employees can perform tip-related duties and which courts have relied on for decades. In fact, at least one district court outside the Fifth Circuit has already issued an opinion concluding the DOL’s 2021 final rule interpreting the 80/20 rule was reasonable and that long-standing subregulatory guidance is entitled to deference. This will inevitably cause confusion and unpredictability for employers in the hospitality industry. Employers may also want to take into account 80/20 laws in states like Connecticut, Maryland, and New York.
Ogletree Deakins’ Wage and Hour Practice Group will continue to monitor developments and will provide updates on the Hospitality, Retail, and Wage and Hour blogs as additional information becomes available.
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