Wage and Hour Division withdraws three tipped employee opinion letters and confirms the 80/20 related-duties guidance no longer reflects its policy
As of our last check on November 2, 2026, this is agency guidance, not a rule. It explains how the agency reads the law and does not create a legal requirement on its own.
In short
- What changed
- The Wage and Hour Division (WHD) of the Department of Labor withdrew three old opinion letters on tipped employees and confirmed that its 80/20 guidance, which limited time spent on related non-tip-producing duties, no longer reflects its policy. WHD now looks at whether an employee is engaged in a tipped occupation, not at how much time goes to individual tasks.
- Who's affected
- Employers that take a tip credit toward the federal minimum wage for tipped employees under the Fair Labor Standards Act (FLSA), most often restaurants and hotels.
- What to do
- This bulletin creates no new duties for employers. Existing FLSA tip credit rules still apply, including paying the full minimum wage for hours worked in a non-tipped occupation; consider reviewing any tip credit policies built on the withdrawn letters or on a time-limit test.
What changed
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From the sourceOpening paragraph
This Field Assistance Bulletin (FAB) withdraws Wage and Hour Division (WHD or Division) Opinion Letters FLSA -895 (Aug. 8, 1979); WH-502 (Mar. 28, 1980); and FLSA-854, 1985 WL 1259240 (Dec. 20, 1985).
Also: Discussion
All are hereby withdrawn.
WHD withdrew Opinion Letters FLSA-895 (August 8, 1979), WH-502 (March 28, 1980) and FLSA-854 (December 20, 1985), which addressed tip credits for time servers spent on preparatory and cleanup tasks.
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From the sourceDiscussion
the 1979, 1980, and 1985 opinion letters no longer reflect Division policy and, in some respects, do not accurately state the law.
WHD says the three letters no longer reflect its policy and, in some respects, do not accurately state the law.
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From the sourceOpening paragraph
WHD confirms the version of section 30d06( e) of the Field Operations Handbook (FOH) that included the 80/20 guidance on related duties, withdrawn on January 14, 2025 (see WHD FOH Revision 785) , no longer reflects the Division’s policy or interpretation of the Act.
WHD confirms that the Field Operations Handbook section containing the 80/20 guidance on related duties, which it withdrew on January 14, 2025, no longer reflects its policy or reading of the law.
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From the sourceDiscussion
This FAB confirms that any ... guidance that contemplates specific time limits on duties performed within a tipped occupation no longer reflects WHD policy.
WHD confirms that any guidance setting specific time limits on duties performed within a tipped occupation no longer reflects its policy.
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From the sourceDiscussion
the letter treats time amounting to 30 to 40 percent of an employee’s workday as consuming a substantial portion of that workday.
Also: Discussion
This is inconsistent with the Restaurant Law C enter decision, which WHD finds persuasive
WHD says the 1985 letter wrongly focused on individual tasks and treated 30 to 40 percent of a workday as a substantial portion, which it finds inconsistent with the Fifth Circuit's Restaurant Law Center decision.
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From the sourceBackground, C. Fifth Circuit Decision
Consequently, the 1967 dual jobs regulation set forth in subs ection 531.56(e) remains in effect today.
Also: Discussion
Both the statute and regulation permit employers to take a tip credit based on whether an employee is engaged in a tipped “ occupation,” not whether the employee is performing certain kinds of duties or tasks within the tipped occupation.
The 1967 dual jobs regulation at 29 Code of Federal Regulations (CFR) 531.56(e) remains in effect, and WHD reads the statute and regulation to base the tip credit on whether an employee is engaged in a tipped occupation, not on the kinds of tasks performed within it.
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From the sourceDiscussion
the Department is developing a notice of proposed rulemaking to amend various regulatory provisions in Subpart D of Part 531, related to tipped employees under the Act.
Also: Discussion
Once published, the Department will welcome comments on any proposed rule impacting tipped employees.
WHD says the Department is developing a proposed rule to amend the tipped employee provisions in Subpart D of 29 CFR Part 531 and will welcome comments once it is published.
Who is affected
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From the sourceHeader
MEMORANDUM FOR Regional Administrators
The bulletin is addressed to WHD's regional and district enforcement staff.
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Our analysisBackground, A. The Fair Labor Standards Act
section 3(m) of the FLSA has permitted employers that meet certain requirements to satisfy a portion of their minimum wage obligation to a “tipped employee” by taking a partial credit
Also: Background, B.1. 1967 Regulation
The Division illustrates this concept with an individual employed by a hotel as both a waiter and a maintenance worker.
The employers it concerns are those that take a tip credit for tipped employees under the FLSA; the examples it discusses are restaurant servers and hotel workers.
What it means in practice
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Our analysisDiscussion
This FAB confirms that any ... guidance that contemplates specific time limits on duties performed within a tipped occupation no longer reflects WHD policy.
Also: Background, C. Fifth Circuit Decision
“focuses on whether the employee performs tasks unrelated to his or her tipped occupation, not the amount of time spent on untipped tasks[.]”
WHD will no longer apply a percentage or time limit (such as the 80/20 test) on related, non-tip-producing duties when deciding whether an employer may take a tip credit; the question is whether the duties are part of the tipped occupation.
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Our analysisBackground, B.1. 1967 Regulation
For the hours worked by the employee in a non- tipped occupation, the employer may not take the tip credit and must pay the employee at least the full minimum wage for hours worked in the non- tipped occupation.
Time spent in a separate, non-tipped occupation still cannot be covered by a tip credit, so employers still need to know when a tipped employee is working in a non-tipped role.
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Our analysisDiscussion
the Department is developing a notice of proposed rulemaking to amend various regulatory provisions in Subpart D of Part 531, related to tipped employees under the Act.
The tipped employee rules may change again through the proposed rule WHD says the Department is developing.
What to do
AmendSignal analysis sorts these by whether this document changes them.
Already required
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From the sourceBackground, A. The Fair Labor Standards Act
the employer must pay the tipped employee a direct cash wage of at least $2.13 per hour .
An employer that takes a tip credit must pay the tipped employee a direct cash wage of at least $2.13 per hour, an existing requirement of section 3(m) of the FLSA that the bulletin describes.
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From the sourceBackground, B.1. 1967 Regulation
For the hours worked by the employee in a non- tipped occupation, the employer may not take the tip credit and must pay the employee at least the full minimum wage for hours worked in the non- tipped occupation.
For hours an employee works in a non-tipped occupation, the employer may not take the tip credit and must pay at least the full minimum wage, an existing requirement of the dual jobs regulation at 29 CFR 531.56(e) that the bulletin describes.
Worth considering
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Our suggestionDiscussion
This FAB confirms that any ... guidance that contemplates specific time limits on duties performed within a tipped occupation no longer reflects WHD policy.
Consider reviewing tip credit policies, timekeeping codes or payroll rules that rely on a percentage-of-time or continuous-minutes limit on related duties, since WHD says such guidance no longer reflects its policy.
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Our suggestionOpening paragraph
These withdrawn opinion letters and the FOH provision that implemented them should no longer be relied upon as WHD enforcement guidance.
Consider updating any internal guidance that cites Opinion Letters FLSA-895, WH-502 or FLSA-854, since WHD says they should no longer be relied on.
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Our suggestionBackground, B.1. 1967 Regulation
the employer may take a tip credit against its minimum wage obligation only for the hours the tipped employee spends engaged in the tipped occupation.
Consider checking whether tipped employees are also assigned to a separate non-tipped role (like the hotel waiter who also does maintenance), and that those hours are paid at least the full minimum wage.
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Our suggestionDiscussion
Once published, the Department will welcome comments on any proposed rule impacting tipped employees.
Consider watching for the Department's proposed rule on tipped employees and deciding whether to comment when it is published.
Open questions
The source leaves these open. We'll update this record if a later document answers them.
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How will WHD decide when a duty is unrelated to a tipped occupation, now that time limits no longer apply?
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When will the Department publish its proposed rule on tipped employees, and what would it change?
History
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FAB 2026-1: Withdrawal of Opinion Letters FLSA-895 (Aug. 8, 1979), WH-502 (Mar. 28, 1980), FLSA-854 (Dec. 20, 1985), and 80/20 Guidance on Related Duties Source (opens in a new tab)