Guides / Side work and the 80/20 rule

By NorseHorse. Updated October 16, 2026. General information, not legal advice; confirm your situation with your state labor department or a lawyer.

The federal 80/20 rule is gone. The Fifth Circuit vacated it in August 2024, and in December 2024 the Department of Labor put the older text back, which has no percentage and no 30-minute limit. Some states still set their own limits: in Connecticut, New York and Pennsylvania your employer loses the tip credit once non-tipped work passes 20 percent of your time (or two hours a day, if that's less, in Connecticut and New York).

What the 2021 rule said

The Department of Labor published its dual jobs rule on October 29, 2021, and it took effect December 28, 2021. It sorted a tipped employee's work into three kinds:

• Tip-producing work: service to customers that brings in tips. For a server, that's table service, such as taking orders.
• Directly supporting work: work that prepares for or assists the tip-producing work. For a server, the rule listed refilling salt and pepper shakers and ketchup bottles, rolling silverware, folding napkins, sweeping or vacuuming under tables in the dining area, and setting and bussing tables.
• Work that is not part of the tipped occupation, such as preparing food, including salads, and cleaning the kitchen or bathrooms. No tip credit was allowed for that time.

The employer could pay supporting work at the tipped wage only up to two limits. It couldn't take a tip credit for supporting work beyond 20 percent of the hours in the workweek for which it took a tip credit, and when supporting work ran more than 30 minutes at a stretch, it couldn't take a tip credit for the time past 30 minutes.

The 20 percent idea was older than the rule. The Department first published its 80/20 guidance in its Field Operations Handbook in 1988 and dropped it in 2018 guidance. The 2021 rule wrote it into the regulations. The 30-minute limit was new.

The Fifth Circuit vacated it

On August 23, 2024, in Restaurant Law Center v. U.S. Department of Labor (No. 23-50562), the Fifth Circuit rendered summary judgment for the restaurant groups and vacated the 2021 rule. The court read the FLSA's definition of a tipped employee, someone "engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips," as turning on the occupation. In the court's words, "The FLSA does not ask whether duties composing that given occupation are themselves each individually tip-producing." It also found the rule arbitrary and capricious. The court issued a superseding opinion on rehearing on October 29, 2024, and its mandate issued the same day.

December 2024: the old text came back

The Department published a rule titled "Restoration of Regulatory Language" on December 17, 2024, effective that day. It skipped public comment, saying good cause existed to dispense with it. The rule revised 29 CFR 531.56(e) back to the text in place before the 2021 rule and removed paragraph (f), where the 20 percent and 30-minute limits had been.

The federal standard now

As of October 2026, the current text of 29 CFR 531.56(e), titled "Dual jobs," still reflects that December 2024 change. It works by example:

• A hotel maintenance man who also serves as a waiter is employed in two occupations, and no tip credit can be taken for his hours as a maintenance man.
• Related duties in a tipped occupation don't have to produce tips by themselves. The regulation's example is a waitress who spends part of her time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses.
• The same goes for a counterman who also prepares his own short orders, or who takes a turn as a short order cook for the group.

There is no percentage and no time limit in that text. Federal law asks whether you were working a second, non-tipped job, not how many minutes you spent rolling silverware. Who gets hurt: a server who spends the first hour of every shift on opening side work at $2.13 an hour has no bright federal line to point to. Whether a given stretch of duties counts as a second job is decided case by case.

One rule didn't change. Your employer still has to keep records. For each tipped employee paid with a tip credit, it must record hours worked each workday in any occupation where you don't receive tips, and hours worked each workday in occupations where you do.

States with their own limits

State law can give you more than federal law, and these states still have percentage limits:

New York's own example: on an 8-hour shift, 20 percent is 1 hour, 36 minutes. A worker who spent 1 hour, 45 minutes on food prep was under two hours but over 20 percent, so the employer couldn't take a tip credit for that day.

Pennsylvania's rules took effect August 5, 2022. They have no 30-minute limit, and an employer may not take a tip credit for any work that neither generates tips nor supports work that does.

In Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington, employers must pay the full state minimum wage before tips, so side work is paid like every other hour. For anywhere else, check your state's page.

What to track

If you think you're doing too much non-tipped work, a written record made at the time beats a memory. For each shift, note:

• Clock-in and clock-out times, and your cash wage per hour from the pay stub.
• Each block of non-tipped work, with start and end times: opening prep, closing, cleaning, kitchen work, anything with no customers.
• Any stretch where you weren't serving anyone at all.
• Daily totals if you're in Connecticut or New York, and weekly totals in Pennsylvania, since that's how each state measures.

Cashout lets you log each shift's start and end time and add notes, which is enough to jot down side work blocks as they happen (see the shift tracker). Keep schedules and pay stubs too. The tip log template works if you'd rather use a spreadsheet.

To file, start with your state agency, linked from each state page under "If you are underpaid", or the federal Wage and Hour Division at 1-866-487-9243. Federal complaints are confidential, and your employer can't retaliate against you for filing one. Under the FLSA you can recover back wages plus an equal amount in liquidated damages, generally within 2 years, or 3 years for willful violations. For other kinds of tip problems, see what to do about tip theft.

Common questions

Is the 80/20 rule still in effect?

Not under federal law. The 2021 regulation was vacated in 2024 and removed from the rules in December 2024. Connecticut, New York and Pennsylvania have their own 20 percent limits.

Can my employer pay me $2.13 an hour while I roll silverware?

Under the federal text, duties related to your tipped job, like setting tables or making coffee, can be paid at the tipped wage, as long as tips bring you up to the minimum wage. Work in a separate non-tipped job can't. In Connecticut and New York, too much non-tipped time costs the employer its tip credit for the whole day; in Pennsylvania, for the time over 20 percent of the week.

Does the 30-minute rule still apply?

No. It was part of the vacated 2021 rule, and the Fifth Circuit noted it had no counterpart in the old 80/20 guidance. Pennsylvania doesn't have one. Connecticut and New York use a two-hour daily limit instead.

How do I figure 20 percent of my shift?

Multiply your shift length by 0.2. An 8-hour shift gives 1 hour, 36 minutes; a 6-hour shift gives 1 hour, 12 minutes. In New York and Connecticut the limit is that number or two hours, whichever is less.

Track it all with Cashout. Shifts, tips, unpaid breaks, taxes, and mileage, logged in seconds. iPhone · Android