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Short description of diving:
- Four business associations - the National Retail Federation, the National Federation of Independent Business, the American Hotel and Accommodation Association, and the American Gambling Association - filed an amicus submission May 16, supporting the court challenge of the regulations of the American Ministry of Labor. The lawsuit, filed by the Center for Restaurant Law of the National Restaurant Association and the Texas Restaurant Association, focuses on a provision commonly referred to as the 80/20 rule.
- In the report, the associations said that respecting the 80/20 rule would create “insurmountable burdens” due to the lack of clarity of compliance. They also claimed that employees who tip usually exceed the minimum wage, thus eliminating the need for a rule; that the rule would require “employee tracking systems that would incur huge costs for employers and employees;” and that characterizing work that “produces advice” and “directly supports” is confusing and in conflict with the “reality of the service environment,” among other issues.
- “The organizations submitting this amicus submission are united in the view that the Final Rule does not provide their members with critical clarity on how compliance could be achieved, if at all,” the organizations and their lawyers said in a statement to HR Dive. “Regulatory requirements in the Final Rule are not in line with the reality of the industries that DOL is trying to regulate, and the challenges of compliance and significant costs that the rule imposes have and will continue to negatively affect both employees and companies.”
Diving insight:
Rule 80/20, which DOL last adopted at the end of October 2021 and which entered into force on 28 Decemberallows the employer to take a tip - ie. include tips on tips in your minimum wage calculations - only when employees who tip perform duties that are part of their occupation, defined as tips-producing work and “work that directly supports tips - production work, provided that direct follow-up work is not performed long time.”
The DOL defines work that directly supports work as exceeding a “significant amount of time” if performed over a continuous period of more than 30 minutes or if it “exceeds, in total, 20 percent of the employee’s working hours during the work week” - hence the designation “80/20 ”.
As the associations pointed out in their friend submission, DOL introduced the 80/20 rule to ensure that employees who tip earn enough tips to earn 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 Wages and Hours Department. June 2021. “It helps to ensure that the workers who tipped are treated with dignity and respect and receive salaries that are commensurate with the work they do.
However, associations - together with RLC and TRA, in his lawsuit - challenged this claim of increased clarity. They argued that the nature of work in restaurants and similar environments with tippers could make it confusing, if not impossible, to comply with the 80/20 rule.
Ako If the carrier cleans the table and replaces the table linen, it is considered work that gives tips… But if the server cleans the table to prepare for the next guest, it is considered that it directly supports the work… This raises the question: in which category should these tasks fall if they are performed by a food runner? What if the employer doesn’t use buses and the servers clean the tables? ”A short hypothesis. The report explored a wide range of workplace circumstances and positions 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.