In Esry v. OTB Acquisition LLC, No. 4:18-cv-155-DPM, 2020 WL 3269003 (E.D. Ark. June 17, 2020), the court denied the defendant's motion for judgment on the pleadings on a class action Fair Labor Standards Act (FLSA) lawsuit in light of the U.S. Department of Labor's (DOL) new interpretation of the Dual Jobs regulation, which sets an upper limit on how much time an employee can spend on related, untipped duties while remaining a tipped employee for all hours worked. Under the old interpretation of this regulation known as the 80/20 rule, DOL indicated that if an employee spent "in excess of 20 percent" of his time on untipped work, that work was performed more than "occasionally," and thus "no tip credit may be taken." In November 2018, DOL said that it was abolishing the limitation on "the amount of duties related to tip-producing occupation that may be performed," so long as such related duties were performed "contemporaneously" or within "a reasonable time" before or after "direct-service duties." Although recognizing that the 80/20 rule is no longer binding, the court adopted it anyway as a reasonable interpretation of the Dual Jobs regulation. The court noticed the pendency of Tip Regulations Under the Fair Labor Standards Act (FLSA), 84 Fed. Reg. 53956 (Oct. 8, 2019), but said it has no effect on the case until adopted.
Originally published July 23, 2020.
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