Employment Law Updates: Nov. 4, 2026

What employers should know about key developments this week:

Tip Rule Guidance: The U.S. Department of Labor rescinded three opinion letters that the Biden administration cited in its final tip rule, which revived the 80/20 standard. Federal enforcement now focuses on whether a worker’s duties are related to their tipped occupation, rather than on calculating percentages.
State Disparate Impact Guidance: Pushing back on the federal government’s move to end disparate impact enforcement, 14 state attorneys general issued joint guidance that disparate impact liability remains legal and enforceable under state and applicable federal civil rights laws. Several states have also enacted amendments to their civil rights laws or regulations to codify disparate impact liability.
Qui Tam Provisions: The U.S. Court of Appeals for the Eleventh Circuit held in September that the False Claims Act’s qui tam provisions do not violate the U.S. Constitution’s Appointments Clause, reversing a 2024 ruling by the U.S. District Court for the Middle District of Florida that would have invalidated them. The same district court must now decide whether the provisions violate the Vesting and Take Care Clauses, an issue the Third Circuit is also considering.

Tip Guidance Withdrawn, Disparate Impact Pushback, and Qui Tam Ruling
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November 4, 2026

Transcript

[00:00:03] George Whipple: Welcome to Employment Law This Week. I’m George Whipple. The Department of Labor withdraws decades-old guidance. The DOL rescinded three opinion letters that the Biden Administration cited in its final tip rule, which revived the 80/20 standard. That rule was invalidated by the Fifth Circuit in 2024. In rescinding the letters, the Department referenced the ruling and noted that the guidance could be “misread.”

[00:00:35] George Whipple: Federal enforcement now focuses on whether a worker’s duties are related to their tipped occupation, rather than calculating percentages. In July, the DOL announced new rulemaking to address tip credits for dual-role employees. The federal government has moved decisively to end disparate impact enforcement, and now some states are pushing back.

[00:01:01] George Whipple: Fourteen state attorneys general published joint guidance to employers that disparate impact liability remains legal and enforceable under state and applicable federal civil rights laws. Disparate impact occurs when a facially neutral policy excludes a protected group and the employer cannot show that it is job-related.

[00:01:25] George Whipple: While the joint-guidance does not impose any new obligations on employers, it indicates that these states are committed to enforcing disparate impact protections. Several states have also enacted amendments to their civil rights laws or regulations to codify disparate impact liability. Qui tam constitutional questions get another day in court.

[00:01:49] George Whipple: In September, the Eleventh Circuit held that the qui tam provisions in the False Claims Act, which permit whistleblowers to bring cases in the name of the U.S. Government, do not violate the Appointments Clause in Article II of the Constitution. That ruling reversed a 2024 landmark ruling in the Middle District of Florida that would have invalidated those provisions.

[00:02:12] George Whipple: However, the Eleventh Circuit also directed that same district court to decide whether the qui tam provisions violate the Constitution’s Vesting and Take Care clauses. The Third Circuit is currently considering these same arguments, so this issue could be headed to the Supreme Court. That’s it for this week. Thanks for watching. We’ll see you next time.

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