DOL limits the time employees with tips can devote to work without tips | Nutter McClennen & Fish LLP

On October 28, 2021, the United States Department of Labor (DOL) announced a new rule, effective December 28, 2021, that limits the time that tip employees can spend on non-tip activities when the employer receives credit. tip.

As of December 2020, the DOL allows an employer to take tip credit for non-tip work from a tip employee when the work was performed simultaneously or for a reasonable period immediately before or after performing tip duties. Employers could not get tip credit only when a tip employee performed a significant amount of separate and non-tip work in such a way that an employee ceased to carry on a tip occupation.

The new 80/20 rule and the 30 minute rule

Under the new rule, an employer can only get tip credit when the employer’s tip employee spends at least 80% of the employee’s hours worked in a week on “tip-earning work” and no more than 20% of his hours worked in a week at “tip support work”. If a tip employee spends more than 20% of his or her hours worked in a week on “tip work” then the employer must pay the employee a full minimum wage for the time spent on “tip support work” which exceeds 20%. % limit.

Notably, the new rule also requires that tip employees who perform “tip support work” for a continuous period of more than 30 minutes receive full minimum wages for any “tip support work” performed in excess of 30 minutes. the 30-minute limit.

What qualifies as “tip production work” and “tip support work”?

The DOL defines “tipping work” as “any work performed by a tip employee who provides a service to customers for which the tip employee receives tips.” In the new rule, the DOL lists specific examples of “tipping work” for waiters, bartenders and bussers. Here are some examples of “tip production work”: providing table service, taking orders, making recommendations, filling water glasses, clearing dishes from tables, preparing and serving drinks, and serving food to customers. at the bar.

“Tip Support Work” is defined by DOL as “work performed in preparation for or otherwise assisting such customer service work generating tips”. The DOL provides a non-exhaustive list of jobs considered to be “tip support jobs”. For waiters, bartenders, and bussers, some examples of tip support work include preparing the dining room, rolling silverware, folding napkins, sweeping or vacuuming under tables, setting up and bussing tables, storing the busser station, cleaning the bar glasses and organizing the bottles behind the bar.

And after?

Employers should start preparing for the new rule and reviewing their timekeeping processes before the rule goes into effect on December 28. We will continue to monitor for updates and can help businesses navigate this process.

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