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80/20 rule
A 2021 federal rule that limited tipped side work to 20 percent of hours and 30 minutes at a time; a federal appeals court struck it down in August 2024.
The 80/20 rule was a federal limit on how much non-tipped side work your employer could have you do while paying a tipped cash wage. Under the Department of Labor's 2021 Dual Jobs Rule, if more than 20 percent of your workweek went to "directly supporting work," or if that work ran more than 30 minutes at a time, the employer couldn't take a tip credit for that time. That's why it's also called the 80/20/30 rule.
It's no longer in effect. On August 23, 2024, the U.S. Court of Appeals for the Fifth Circuit decided Restaurant Law Center v. Department of Labor and vacated the rule. On December 17, 2024, the DOL removed the vacated text and reinstated the regulation as it stood before the 2021 rule.
The federal rule today is that older dual jobs regulation, and it has no percentage or time limit. If you work two separate jobs for one employer, such as hotel maintenance and waiting tables, no tip credit can be taken for the non-tipped job. But related duties within a tipped job, like a server who spends part of the time cleaning and setting tables, making coffee and occasionally washing dishes, don't have to produce tips themselves.
Older articles and training materials still quote the 80/20 rule as current federal law. State law can be different: some states, including California, Oregon and Washington, don't allow a tip credit at all. Check your state's tipped minimum wage rules, and keep track of your side work time in case a pay question comes up.
Related terms
Side work · Tip credit · Tipped employee · Fair Labor Standards Act (FLSA) · Department of Labor (DOL)
