Business associations support a case challenging the DOL 80/20 rule

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Brief information about diving:

  • Four business associations – the National Retail Federation, the National Federation of Independent Business, the American Hotel and Accommodation Association, and the American Gaming Association – filed amicus May 16 in support of a judicial challenge to U.S. Department of Labor council regulations. The lawsuit, filed by the National Restaurant Association and the Texas Restaurant Association, focuses on a provision commonly called the 80/20 rule.
  • In a nutshell, the associations stated that compliance with the 80/20 rule would create “insurmountable burdens” due to a lack of clarity of compliance. They also argue that gratuitous employees usually exceed the minimum wage, eliminating the need for the rule; that the rule would require “employee monitoring systems that would incur huge costs for employers and employees”; and that the characterization of work that “gives advice” and “directly assists” is confusing and in conflict with the “realities of the service environment”, among other issues.
  • “The organizations submitting this briefing are united in the position that the Final Rule does not provide its members with critical clarity on how compliance can be achieved, if at all,” the organizations and their lawyers said in a statement to HR Dive. “The regulatory requirements in the Final Rule are not appropriate to the realities of the industries that DOL seeks to regulate, and the compliance challenges and significant costs that the rule imposes, have and will continue to have a negative impact on both employees and businesses. “

Diving Insight:

The 80/20 rule, which DOL last accepted at the end of October 2021 and which entered into force on 28 Decemberallows the employer to take a loan for tips – ie. to include gratuity gains in the calculation of their minimum wage – only when gratuity employees perform duties that are part of their profession, defined as gratuitous work and “work that directly supports gratuities – production work, in provided that the direct maintenance work is not carried out for a significant period of time. “

DOL defines direct support work as exceeding “significant time” if it is carried out for a continuous period of time exceeding 30 minutes or if it “exceeds a total of 20 percent of the employee’s hours worked during the working week” – hence the designation “80/20 “.

As the associations noted in their amicus offices, DOL introduced the 80/20 rule to ensure that gratuity employees earn enough tips to receive the minimum wage. “This proposed rule provides more clarity and security for employers, while better protecting workers,” said Jessica Luhmann, acting administrator of DOL’s payroll and payroll department. June 2021. “This helps to ensure that gratuity workers are treated with dignity and respect and that they receive wages appropriate to the work they do.

However, the associations – together with RLC and TRA, in their claim – challenged this statement with increased clarity. They argue that the nature of working in restaurants and similar environments with tips tips can make complying with the 80/20 rule confusing, if not impossible.

Ако If the busser clears the table and changes the table linen, this is considered work that gives advice… But if the server clears the table to prepare for the next guest, it is considered to directly support the work… This raises the question: in which category Do these tasks fall if performed by a food runner? What if the employer doesn’t use bussers and the servers clear the tables? the brief hypothesis. The summary explores a wide variety of circumstances and positions in the workplace that complicate the 80/20 rule.

The 80/20 rule has a long history and before his resurrection last year, came under fire during the term of the Trump administration.

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