DOL Bulletin Aims to Clarify Pay Requirements for ‘Dual-Job’ Workers

The U.S. Department of Labor’s Wage and Hour Division (WHD) on Monday, Oct. 19, released updated guidance that addresses how employers must address compensation for employees who perform a mix of tipped and non-tipped tasks.

The guidance on “workers who hold dual jobs” in Field Assistance Bulletin No. 2026-1 aligns the division’s official enforcement positions with current regulations under the Fair Labor Standards Act (FLSA).

As part of the update, the WHD stated it will formally withdraw three opinion letters — from 1979, 1980 and 1985 — that address how employers should apply the FLSA to dual-job situations. According to the department, rescinding the letters is necessary because “they no longer accurately reflect the division’s active policies or its current interpretation of the FLSA.”

Regulatory Context

Since 1966, the FLSA has allowed employers to pay tipped employees a lower minimum wage and take a tip credit to satisfy the regulation’s minimum wage requirement. Under the FLSA, a tipped employee is “any employee engaged in an occupation in which [that individual] customarily and regularly receives more than $30 a month in tips.”

The DOL issued the dual-jobs regulation in 1967 that recognized some workers may be employed to perform two or more distinct jobs for the same employer. In such cases:

A tip credit can be taken for work in an occupation in which workers customarily/regularly receive tips (at least at the monthly dollar minimum); and,
The worker also may perform related duties (e.g., setting tables, cleaning) that don’t directly lead to tips.

The three opinion letters mentioned above, and a 1988 formal entry in the DOL’s Field Operations Handbook, had solidified a stance that became known for the next three decades as the “80/20 Rule.” Under this guidance, the tip credit wasn’t available when tipped employees devoted more than 20% of their time to non-tip-producing activities. In 2021, the DOL (under the administration of then-President Joe Biden) issued what became known as the “80/20/30 Rule,” a final regulation that adopted the 80/20 guidance and added a 30-minute restriction on non-tip-producing work by tipped employees.

An August 2024 federal court decision in Restaurant Law Center v. U.S. Department of Labor eventually vacated the DOL’s 2021 dual-jobs final rule. In that case, the court determined:

The 2021 rule exceeded “the FLSA’s focus on employees’ occupations rather than on their discrete pursuit of tips”; and,
Opined that the 1967 dual-jobs regulation was a more proper interpretation of the FLSA because it focused on whether the employee performed tasks for a separate occupation, not on the amount of time spent on untipped tasks.

Following that ruling, the department removed the 2021 regulatory text (and the related Field Operations Handbook entry) and reinstated the 1967 text and guidance.

The New Way Forward

The new DOL/WHD guidance bulletin advances this compensation compliance issue by:

Clarifying that the current dual-jobs regulation focuses strictly on whether an employee performs duties related to their tipped occupation; and,
Rejecting any specific percentage-based limit on the time an employee can spend performing related, non-tipped duties within that occupation.

While the bulletin takes immediate effect as agency enforcement guidance, the DOL added it’s developing a notice of proposed rulemaking to amend regulatory provisions governing tipped employees in 29 CFR Part 531 (“Wage Payments Under the Fair Labor Standards Act of 1938”). Once published in the Federal Register, the department said it will solicit public comment on any proposed changes affecting tipped workers and employers that utilize the tip credit.

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