Labor Dept. Scraps Three Decades-Old Opinion Letters on Tipped Workers

The U.S. Department of Labor's Wage and Hour Division issued Field Assistance Bulletin No. 2026-1, withdrawing three opinion letters dating to 1979, 1980, and 1985 that had long governed how employers treat tipped employees who perform related non-tipped duties on the job. Officials said the decades-old letters no longer reflect agency policy or its current reading of the Fair Labor Standards Act.

The bulletin eliminates the so-called 80/20 rule, a percentage-based ceiling that had restricted the amount of time tipped workers could spend on duties not directly generating tips before losing their tipped minimum-wage status. Under the reinstated 1967 dual jobs regulations now in force, the relevant test turns on whether the duties an employee performs are related to their tipped occupation — not on a specific time threshold.

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The policy shift follows a 2024 federal court ruling that vacated the department's 2021 dual jobs final rule. After that decision, the department restored the original regulatory text that predates the 2021 changes. The Wage and Hour Division had already removed 80/20 guidance from its Field Operations Handbook in January 2025, and the new bulletin formally aligns all remaining guidance with those reinstated rules.

The department signaled that further regulatory action is forthcoming. According to its most recent regulatory agenda, officials are drafting a notice of proposed rulemaking to revise various FLSA provisions covering tipped employees and said it would welcome public comment once the proposal is published. Employers and workers in the restaurant, hospitality, and service industries — where tipped labor is most prevalent — are likely to follow the rulemaking closely given its potential to reshape wage calculations across those sectors.

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