The U.S. Department of Labor recently proposed changes to the 80/20 rule, altering what type and amount of work qualifies for the tip credit. While the hospitality industry is beginning to recover from the impact of the coronavirus pandemic, there’s also a worker shortage thanks in part to low wages and a reduction in tipping. Restaurateur Philip Camino and chef Nyesha Arrington break down the DOL’s proposed changes to the tip credit and the impact they’ll likely have on both restaurant owners and employees. From the need to improve the employee experience to how changes in pay could impact menu prices, Nyehsa and Philip provide valuable insight to get to the most important parts of the new guidelines. Listen to Philip and Nyesha discuss the tip credit: In the United States, employers can pay employees as low as $2.13 per hour as long as a majority of that employee’s work is tipped work In 43 states, employers can claim a credit against the tips employees earn to make up the difference in hourly rate to $7.25 to meet the federal minimum wage The 80/20 rule has come under some scrutiny in recent years as the Department of Labor rescinded it in 2018 due to many employers claiming it despite not meeting the regulations By the end of 2020, the DOL released the Final Tip Rule but delayed it for adjustments Under President Donald Trump’s administration, the 2020 tip rule favored the employer’s use of the top credit, allowing them to claim it even when employees were performing non-tipped work Under the DOL’s guidelines, servers can’t perform non-tipping work as more than 20% of their duties The newly proposed tip rule puts limits on the type and amount of non-tipped work an employee can do for the employer to claim the tip credit That non-tipped work has to support the job of a server including tasks like folding napkins and preparing silverware The DOL says these new guidelines came as an effort to further support tipped workers Links: Happy Mouth Podcast Instagram Restaurant Business - DOL proposes change to 80/20 tip credit rules Restaurant Business - DOL delays discontinuation of 80/20 rule on servers’ pay Waller - Restaurants must be aware of the 80/20 rule We have a lot more content coming your way! Be sure to check out our other shows: Full Comp  The Happy Mouth Morning Show Restaurant Marketing School The Playbook