Compliance Roundup: The DOL Clears Out 80/20, the EEOC Moves to Drop Its Hiring Test Guidelines, and Courts Limit Religious and Age-Based Exemptions

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Written By
Jennifer Kiesewetter
Published On: November 2, 2026

Jenny Kiesewetter is a practicing ERISA and employee benefits attorney who partners with HR teams on a wide range of workplace compliance matters — from benefit-plan obligations to day-to-day HR policies and regulatory requirements. Her guidance helps employers spot risks early, navigate regulatory change, and make informed decisions that support both employees and the organization.

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The Labor Department has withdrawn the last guidance behind the 80/20 tip rule, and the EEOC is moving to drop its 1978 guidelines on hiring tests. New York State and Allegheny County, Pennsylvania, have added new pay and leave requirements, and 2 federal courts limited what religious and age-based exemptions can cover.

Here’s what happened recently and what employers need to know.

Federal News

Issued: October 19, 2026.

What’s Changing: The U.S. Department of Labor (DOL) has withdrawn 3 opinion letters, from 1979, 1980, and 1985, that addressed how employers pay tipped employees for work that does not directly generate tips. In Field Assistance Bulletin No. 2026-1, the agency said those letters, the origin of the former “80/20” rule, no longer reflect its policy. The 80/20 rule restricted employers from taking a tip credit when employees spent more than 20 percent of their time on related, non-tip-producing work.

A federal appeals court struck down the DOL’s 2021 version of the 80/20 rule in August 2024, and the DOL removed the rule from its enforcement handbook in January 2025. Under its current policy, restaurants can take a tip credit for time servers spend cleaning tables, stocking supplies, and handling other side work that is part of their regular jobs, even when those tasks take up more than 20 percent of their time.

The distinction between tipped and non-tipped jobs still matters. For example, a restaurant cannot take a tip credit for hours a server spends working a separate job as a maintenance employee. Federal law also still requires employers taking a tip credit to pay at least $2.13 per hour in direct wages and ensure that wages and tips meet the applicable minimum wage. States may impose stricter requirements.

The DOL is also working on a new proposed rule addressing tipped employees.

What This Means for HR:

  • Review how servers, bartenders, and other tipped employees are paid for side work.
  • Make sure employees working separate, non-tipped jobs receive the required wages.
  • Check state tip-credit rules before changing payroll practices.
  • Watch for the DOL’s proposed rule.

Status: Draft final rule submitted for White House review October 16, 2026. The EEOC anticipates final action in November 2026, with a projected January 2027 effective date.

What’s Changing: The Equal Employment Opportunity Commission (EEOC) submitted a draft final rule for White House review that would rescind the interpretive guidance in its Uniform Guidelines on Employee Selection Procedures. The EEOC did not issue a proposed rule first.

The guidelines have been in place since 1978 and address how employers evaluate hiring tests and other screening methods that may disproportionately exclude applicants based on race, sex, or ethnicity. They also explain how employers can show that a test measures the skills or abilities needed for the job.

The EEOC’s plan to rescind the guidelines would not change employers’ obligations under Title VII. Employers can still face discrimination claims if their hiring tests, assessments, or screening procedures disproportionately exclude protected groups and cannot be justified as job-related and consistent with business necessity.

What This Means for HR:

  • Continue checking whether hiring tests and screening tools disproportionately exclude certain groups of applicants.
  • Keep records supporting the use of preemployment tests, assessments, and AI-based screening tools.
  • Watch for the final rule before changing existing hiring or testing procedures.

Trending State News

Effective Date: December 8, 2026.

What’s Changing: New York’s Construction Reporting Pay Act (A.6950/S.9843), signed September 9, 2026, raises what construction employers owe workers who show up and are sent home. Workers were already guaranteed 4 hours at minimum wage; the new law requires 4 hours at their regular rate and adds pay for shifts canceled on short notice.

The law generally guarantees construction workers at least 4 hours of pay when they report at the employer’s request or with its permission, even if they are sent home early. For shifts scheduled to last less than 4 hours, employers must pay only for the scheduled time. That exception does not apply to covered prevailing-wage projects, where workers receive at least 4 hours of pay at the prevailing rate, including supplements.

Employers also must provide 2 hours’ pay if they cancel a scheduled shift less than 12 hours before it begins.

What This Means for HR:

  • Update reporting-pay and cancellation procedures before December 8.
  • Document cancellation notices in writing, with timestamps.
  • Review prevailing-wage schedules and union agreements for overlapping scheduling-pay terms.

Signed: October 22, 2026; employer compliance is expected around October 2027.

What’s Changing: Following the County Council’s October 20 vote, County Executive Sara Innamorato signed an ordinance requiring employers with at least 15 employees to provide up to 12 weeks of paid parental leave after birth, stillbirth, adoption, or placement of a child. The 15-employee threshold includes employees working outside Allegheny County. Employers pay the benefit at the employee’s base rate, up to $4,200 a week.

Employees qualify for paid parental leave after working for the same employer for at least 180 consecutive days and completing at least 80 hours of work in Allegheny County each year. Part-time employees must also work at least 625 hours during that 180-day period.

It is not yet clear whether the parental leave requirements apply to temporary, seasonal, and certain unionized construction workers, and the county has not said.

The law also increases annual paid sick leave to 72 hours for employers with 15 or more employees and 48 hours for smaller employers.

What This Means for HR:

  • Determine coverage and eligibility, including remote workers with county hours.
  • Compare existing parental leave policies with the ordinance.
  • Monitor county guidance for confirmed dates, and for a likely legal challenge, before committing budget.

Around the Courts

Decided: October 16, 2026.

What’s Changing: A divided federal appeals court ruled against Catholic Relief Services (CRS) after the organization stopped providing health insurance coverage to an IT analyst’s same-sex spouse. CRS had initially enrolled the employee’s husband in its health plan but later ended his coverage, citing the organization’s religious beliefs.

In Doe v. Catholic Relief Services, the Fourth Circuit affirmed a lower-court win for the employee, holding that Title VII’s religious-employer exemption does not permit an employer to discriminate based on sex, even when the decision is motivated by religious beliefs.

The court also rejected CRS’s defense under the federal Religious Freedom Restoration Act, finding that the law does not apply to lawsuits between private parties. It held that Maryland’s religious-employer exemption did not apply, because an IT analyst’s duties did not directly further CRS’s core mission.

What This Means for HR:

  • Treat religious-employer exemptions as narrow: Title VII’s allows religious preferences in employment but does not cover sex-based decisions, and Maryland’s covers only roles that directly further the religious mission.
  • Apply benefits eligibility rules to same-sex and opposite-sex spouses alike.
  • Consult counsel before withdrawing any benefit already granted.

Decided: October 23, 2026.

What’s Changing: Yale New Haven Hospital requires medical practitioners age 70 and older to undergo eye examinations and neuropsychological testing before they can obtain or renew their clinical privileges. The EEOC sued over the policy in 2020, arguing that it violates federal age discrimination and disability laws.

In EEOC v. Yale New Haven Hospital, Inc., a Connecticut federal court denied both sides’ requests for summary judgment, allowing the case to proceed to trial. At trial, the hospital will have to show that age 70 is a reasonable proxy for the fitness concerns it screens for, that assessing practitioners individually is impractical, and that the testing is no broader than patient safety requires.

What This Means for HR:

  • Audit age-triggered screening requirements.
  • Confirm employee medical examinations are job-related and consistent with business necessity.
  • Consult counsel before adopting age thresholds, including for safety-sensitive roles.

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