Welcome to Issue #26 of The Compliance Brief. Every Tuesday I break down the HR and labor law updates that actually matter to small businesses — in plain English, no legal jargon.

DOL Drops the 80/20 Tip Credit Rule, but Documentation Still Matters

On October 19, the Department of Labor withdrew the guidance behind the “80/20 rule” for tipped employees. Under that rule, an employer could lose the tip credit if more than 20 percent of a shift went to related, non-tipped work like rolling silverware. In Field Assistance Bulletin 2026-1, the DOL withdrew three opinion letters behind the rule and said time limits on tipped duties no longer reflect its policy.

This is an enforcement-policy change, not a change to the FLSA. Investigators will now ask whether the work is genuinely related to tip-producing duties, not whether it crossed a percentage. Work outside the tipped occupation still requires full minimum wage, and some states are stricter.

For a small restaurant, salon, or café, the safeguard shifts from a stopwatch to your paperwork. Written duty descriptions and accurate time records are your best protection.

Action step: Check whether managers or your payroll vendor still apply a 20 percent cutoff, and update job descriptions and timekeeping to match.

1. EEOC Sues Solera Holdings Under the ADA

The EEOC sued on October 20, alleging the company limited an employee with a degenerative eye disease to one product, withheld sales leads, and excluded him from meetings and training, then fired him over the resulting poor sales. After an employee discloses a disability, document the support they need before judging performance.

2. Oklahoma Changes Workplace Marijuana Testing on November 1

Under House Bill 3127, employers with a compliant written testing policy can act on a positive marijuana test even when the old exceptions don’t apply, and safety-sensitive roles get a zero-tolerance standard. Employees need 10 days’ notice of any new or changed policy, so update yours and define safety-sensitive jobs by duties now.

3. IRS Confirms $7,500 Dependent-Care Exclusion for 2026

The IRS corrected its 2026 W-2 instructions: the maximum tax-free employer dependent-care benefit is $7,500, not the $5,000 first printed. Report all dependent-care benefits in Box 10, including amounts above the exclusion, and update payroll before year-end W-2s.

✅ Replace any 20 percent tip-duty cutoff with written duty descriptions

✅ Document the tools and training employees with disabilities need

✅ Update your Oklahoma drug-testing policy and list safety-sensitive roles by duties

✅ Set payroll to the $7,500 dependent-care limit

The DOL’s tipped-employee fact sheet explains how the tip credit works: dol.gov

That's it for this week. Short, actionable, no fluff.

If this was useful, forward it to another small business owner who could use it.

See you next Tuesday.

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This is for informational purposes only and does not constitute legal advice.